> To me, that seems to be a requirement for the computing industry for a long time.
Sure, but they have a market cap of 5 trillion. It's about 10x that of AMD, which also sells similar silicon (and isn't in any distress). It's more than Apple, Google, and Microsoft - and these companies historically found ways to make more money than the vendors they buy chips from.
The problem isn't that Nvidia doesn't have good fundamentals or good products, it's that the market is expecting miracles.
In the case of Nvidia, the funny thing is that their high valuations started not with AI, but with cryptocurrencies. Just never really came down - they coasted from a silly hype cycle to a more substantive one. Ten years ago, NVDA wasn't an interesting stock at all.
Why would you hold a stock if you think it should go down? If you think the stock is valuable but in the near term should go down, why not sell and then buy in increments as it goes down?
Because stocks have a tendency to go up even when they should be going down. And when you decide that it probably isn't going down, it will go down. Timing the market isn't a reliable way of wealth generation. Long term investing is.
Prices are heavily guided by sentiment. Nobody said sentiment HAS to be tied to the entity's fundamentals. GameStop stock moved due to sentiment external to the entity itself.
Sure, but they have a market cap of 5 trillion. It's about 10x that of AMD, which also sells similar silicon (and isn't in any distress). It's more than Apple, Google, and Microsoft - and these companies historically found ways to make more money than the vendors they buy chips from.
The problem isn't that Nvidia doesn't have good fundamentals or good products, it's that the market is expecting miracles.
In the case of Nvidia, the funny thing is that their high valuations started not with AI, but with cryptocurrencies. Just never really came down - they coasted from a silly hype cycle to a more substantive one. Ten years ago, NVDA wasn't an interesting stock at all.