Ethereum Is Not Like Nvidia, Amazon, But More Like Intel, Trader Says: 'Negative Revenue Growth And Negative Profitability'
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 24 2024
0mins
Should l Buy NVDA?
Source: Benzinga
- Crypto Market Analysis: Andrew Kang compares Ethereum to tech stocks, noting similarities in price action with May 2021.
- Market Caution: Despite bullish momentum, Kang warns of potential extreme corrections over a multi-month period.
- Skepticism on Support Levels: Kang expresses doubt about support levels holding amidst market disruptions like Mt Gox estate selling and ETF buyers selling.
- Comparison to Tech Companies: Kang draws parallels between Ethereum's valuation and growth prospects to past tech bubbles rather than sustained growth seen in companies like NVIDIA and Amazon.
- Ethereum's Fundamentals: Kang questions Ethereum's high valuation based on negative revenue growth, profitability, and declining interest in NFTs.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 165.170
Low
200.00
Averages
264.97
High
352.00
Current: 165.170
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Robust AI Demand Outlook: CEO Jensen Huang announced at the GTC AI Conference that demand for AI systems is projected to reach at least $1 trillion in 2026 and 2027, a substantial increase from the previous estimate of $500 billion, highlighting the long-term trend in AI infrastructure development.
- Diversified Customer Base: Nvidia's business is composed of 60% from hyperscalers and 40% from enterprises, sovereign AI projects, startups, and emerging applications, ensuring that the company is not overly reliant on any single industry, thereby mitigating market risks.
- Continuous Product Innovation: Nvidia is actively launching new products, with ongoing deployments of Hopper systems and ramping up Blackwell systems, while future platforms like Rubin and Feynman are already in development, enhancing the company's competitive edge in the market.
See More
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- Youth Engagement: The survey reveals that Gen Z and millennials have the highest AI stock ownership rates at 67% and 66%, respectively, highlighting the younger generation's keen interest and willingness to invest in future technologies.
- Major Investment Plans: Leading tech giants like Alphabet, Amazon, Meta, and Microsoft are projected to spend between $600 billion and $700 billion on AI data centers by 2026, reflecting their commitment to the AI sector and confidence in future growth.
- Nvidia's Success Story: Nvidia's stock has surged 1,190% over the past five years, exemplifying a successful investment in AI infrastructure, which encourages investors to consider opportunities in this rapidly evolving field.
See More
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- Nvidia's Market Leadership: Since the AI build-out began in 2023, Nvidia has established itself as the go-to provider of AI computing units with its general-purpose GPUs, projecting lifetime sales of Blackwell and Rubin chips to reach $1 trillion by 2027, indicating substantial growth potential.
- New Chip Architecture Advantage: Nvidia's upcoming Vera Rubin chip architecture can match the performance of existing Blackwell chips while requiring four times fewer chips, suggesting that customers will likely purchase more chips, thereby driving revenue growth for the company.
- Broadcom's Custom Chip Opportunity: Broadcom is partnering with AI hyperscalers to design custom AI chips, expecting revenue in this area to reach $100 billion by 2027, showcasing its competitive edge in specific tasks, with the segment's revenue growing at an impressive 106% last quarter.
- Expansive Market Outlook: Both companies anticipate global data center capital expenditures to rise to $3 trillion to $4 trillion annually by 2030, providing a larger growth runway, although Nvidia is viewed as the better investment choice in the short term due to its growth and valuation advantages.
See More
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- Market Size Analysis: According to the Bureau of Transportation Statistics, light-duty vehicles in the U.S. travel over 3 trillion miles annually, with ride-sharing services charging $1 to $2 per mile, indicating that even with autonomous driving technology halving costs, robotaxis represent a trillion-dollar market, showcasing immense commercial potential.
- Investment Dynamics: Hedge fund billionaire Ken Griffin increased his holdings in Nvidia and Amazon in Q4, both of which are central to the development of autonomous driving technology, with Nvidia's GPUs widely used to accelerate AI workloads, thereby expediting robotaxi development.
- Technological Ecosystem: Nvidia not only provides industry-standard GPUs but also a rich software ecosystem, including the Omniverse simulation platform and Cosmos foundational models, which will assist developers in building and training autonomous driving systems, thus facilitating the commercialization of robotaxis.
- Zoox's Market Prospects: Amazon's Zoox is the only company operating purpose-built robotaxis on U.S. streets, expected to account for 12% of autonomous rides by 2032, providing significant revenue support for Amazon's future growth while reflecting its strategic positioning in the autonomous driving sector.
See More
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- AI-Driven Growth: The Invesco QQQ Trust is heavily invested in AI-related stocks, with top holdings including tech giants like Nvidia and Apple, which are expected to benefit from the rapid development of AI technologies, further enhancing market performance.
- Market Correction Timing: The Nasdaq Composite is currently in a market correction, down over 10% from its all-time high, and historical data indicates that such corrections have led to an average five-year return of 146%, presenting a favorable investment opportunity.
- Concentration Risk Warning: While the Invesco QQQ Trust has a reasonable expense ratio of 0.18%, its top ten holdings account for nearly 50% of its performance, prompting investors to carefully consider the concentration risk and potential price volatility.
See More
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- Nvidia Sales Projections: Nvidia expects lifetime sales of its Blackwell and Rubin chips to reach $1 trillion by 2027, significantly up from the $500 billion forecast for 2026, indicating strong growth potential in the AI market.
- Broadcom Custom Chip Growth: Broadcom anticipates its custom AI chips will generate $100 billion in revenue by 2027, with the current segment growing at a remarkable 106% to $8.4 billion last quarter, highlighting a massive market opportunity in task-optimized chips.
- Global Data Center Expenditures: Nvidia forecasts that global data center capital expenditures will rise to $3 trillion to $4 trillion annually by 2030, providing both companies with a larger growth runway and underscoring the long-term potential of AI development.
- Short-term Investment Edge: While both companies show strong growth prospects, analysts suggest Nvidia is the better buy for the short term due to its higher growth rate compared to Broadcom and a more attractive forward price-to-earnings ratio, potentially leading to better performance amid market fluctuations.
See More
