Nvidia passes its quarterly future-shock stress test
Open the Editor’s Marking Free
Rulla Khalaf, the FT editor, chooses its preferred stories in this week’s news.
The problem with the future is that it has not yet happened. Betting on companies whose value mainly lives in an educated guess, so it is not for the weaknesses of the stomach. Nvidia, Palantir, Applovin and Microstragegy – 2024 The best performance technology shares of the United States put investors through their pace.
NVIDIA, through its pure size, inspires more cortisol than many. $ 3tn Chipmaker, whose silicone forces operates in an artificial intelligence boom, almost tripled in the market capitalization in 2024, but about 6 percent down this year. His fourth quarter earnings comfortably beat the expectations of analysts, but investors are more focused on the next.
Everyone is going to plan so far. Boss Jensen Huang says the company’s new high quality Blackwell chips requirement is “surprising.” Profitability is slightly compressed with new intervals, but the income of the current three-month period should be higher than they previously thought. The problem is that the details outside of that are evasive. Every quarter is new nail bracket.
Buying the company’s shares is always a bet on remote income flows. The share of lion’s value comes from “terminal value”. For example, the value of the value of analysts, for example, is discounted by 10% per year, and today they cost more than $ 500 billion. This means that 80% of NVIDIA’s $ 3TN market value is the amount after 2030.
A lot can happen in those short windows of time. Just ask millions of investors who haven’t heard about NVIDIA Five years ago. And technology reserves are unusually sensitive to sudden shifts. For example, Nvdia receives about a third of its income from only three customers, which in turn sells other products to others. Its sale to China is subject to tariff policy, as Trump’s administration has already shown many times, can be turned on a time.
These fantastic four other members have a tougher time. Palantir Software Company has fallen on the programs that the Pentagon wants to massacre budgets for a potentially useless company that receives more than half of its income from governments. However, he still transacts about 50 times a leading income, feeling positively as a result of Nvdia as stable. Microstrat, while it has its own unique votes. It is mainly a piggy bank filled with Bitcoin, the price of which is always merciful.
Applovin’s reversal is especially suddenly. The company that advertises brokers within the framework of the game programs after the two short reports, proposed that its rapid growth could be less stable than it seemed. Slightening, more predictable companies are much less vulnerable to future cash flow confidence in that type of attack.
For Nvdia, some things, at least, are convinced. Its largest customers, Microsoft and Amazon, have money and are determined to spend it on chips. At present, they are few, if available, other options when it comes to AI processors. Investors are relaxing so far. It’s been a stress test. One will be soon.
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