"There is a lot of talk about an AI bubble. From our perspective, we see a very different reality." This is how Jensen Huang swept aside market concerns during a conference call with analysts.
And the head of Nvidia can lean on solid results and guidance, which again beat the consensus.
We won't go into detail here about the quarterly results, but simply highlight the exceptional nature of Nvidia's trajectory over the past three years.
The starting point is that Nvidia already has the highest market cap in the world (about $4.5 trillion at yesterday's close). However, the company is displaying growth rates worthy of small-cap Nasdaq stocks: in the last quarter, revenue jumped 62%.
The Financial Times even offered a striking comparison this morning. When Google posted these growth rates, the company had a market capitalization of about $150bn...
And not only is the absolute figure high, but growth has accelerated again in the last three months.
Year-on-year revenue growth. Source: Financial Times
Another notable fact, highlighted this time by Bloomberg: in the last quarter, Nvidia earned more profits ($32bn) than the combined revenue of its "peers" Intel and AMD ($23bn).
Finally, the trajectory has been impressive since 2022. Indeed, the rally in Nvidia (and the overall market) began three years ago, with the launch of ChatGPT in November 2022. Taking Nvidia's quarterly report from three years ago as a reference, revenue has since been multiplied 10-fold, and net income by... 47 times! Over this period, the stock price has increased 12-fold.
All this means that, unlike other companies surfing the AI frenzy, Nvidia's valuation has not exploded. Its P/E is currently even below its 10-year average.
