Microsoft, Meta and Oracle already spend billions on supposedly completely inferior(according to the Nvidia cultists) AMD chips. Nvidia is the biggest bubble in human history.
PE isn't a cheat code to rational stock valuation, it's the "nothing ever changes" assumption dressed up in a formula. PE looks at past earnings, while the price of a stock buys its future earnings. A modest PE on NVDA says "I expect datacenter revenue to continue" while a modest PE on TSLA would say "I expect robotaxi to fail." These are fair opinions to have, as are their opposites, but if datacenter revenue collapses then today's modest PE won't save NVDA and if TSLA can pull off robotaxi then today's high PE will be vindicated. Stocks are all about Future Earnings, but you can't put that in a column and sort by it so we have PE.
You can certainly have success while avoiding high PE stocks, but you are on a site about startups and your name suggests you work in the tech sector, which are both places where high PE often does make sense and it pays to be familiar with the reasons.
> a modest PE on TSLA would say "I expect robotaxi to fail."
No. Just having competition is enough to destroy the expectations on TSLA.
And realistically, they are abut last on that race, being thrown out of track about a decade ago and never managing to make anything work since then. So, yeah, betting on no competition is a very weird option.
But the market of luxury cars isn't enough to sustain a company with the valuation of Tesla. If interest rates ever stay non-zero, they will need to take almost the entire cars market worldwide, or something else with similar size.
Even if they can get robotaxi to work on a level better than Waymo currently is shouldn’t they just be valued as if they were Uber with $0 paid out to contractors? The labor is not that significant a cost to what’s fundamentally a taxi business
Full FSD would theoretically allow vehicle owners to rent out spare capacity with no hassle.
I saw the low-tech version of this in Honiara: Western expat buys a cheap car. Driver is hired to take kids to/from school, but in lieu of payment, driver is free to run a taxi service as long as he makes his school commitments.
When you don’t have a driver anymore you quickly run into an issue with keeping the vehicle clean.
One time having a drunken stranger puke in your car while you’re not using it will be enough for a lot of people to determine it isn’t worth the hassle.
It’s pretty easy to imagine a number of scenarios that disabuse the nothing of ever renting your car out “no hassle”. Low hassle maybe, but your framing implies you’ve never worked in a job that required engaging the general public.
The more interesting dynamic with Nvidia though is that most of its revenue is actually fueled by bubbles as well. Teslas earnings are much more grounded and natural.
I think you misunderstand that comment. Tesla may be hopelessly overvalues, but their revenue may grow in future. OTOH Nvidia's revenue may have peaked.
Maybe so. Their valuation coming down to earth would certainly ripple. Whatever precedes that fall, it seems unlikely that revenues would remain unaffected.
In all, it’s unfortunate that the US’s most prominent electric vehicle manufacturer is wrapped up in so much noise. Competition is only going to stiffen.
how is their revenue gonna grow in the future when they don't have an edge in their main core product. Batteries are by panasonic. while BYD makes its own batteries.
Tesla has no moat. At least Nvidia has CUDA
I don't why this comment was downvoted. You raise an important point. I also noticed that you (carefully?) made no comment about Telsa's stock price. Instead, you only focused on their earnings -- which are excellent for a car company.
It got downvoted for not parroting “Tesla bad” even if it didn’t claim anything to the contrary and is simply observing one fact — Tesla’s earnings being great. That’s not acceptable apparently.
