① Legendary investor Rob Arnott said that due to an unsustainable high share of the semiconductor market, Nvidia “seems to have a bubble”; ② competitors such as AMD and Intel may step up their competition with Nvidia; ③ Nvidia's latest financial report shows that all data (including revenue, profit and guidance) for the first fiscal quarter have completely exceeded expectations.
Financial Services Association, May 24 (Editor Huang Junzhi) This week, the most eye-catching thing was undoubtedly the performance of “AI leader” Nvidia. According to the company's latest financial report, all figures for the first fiscal quarter (including revenue, profit and guidance) have completely surpassed expectations. Moreover, the stock split expected by the market came to fruition as scheduled, triggering a sharp rise in stock prices, and Wall Street cheered even more.
By Thursday's close, Nvidia had risen 9.32%, and its stock price was stable at the $1,000 mark. In just one day, Nvidia's market capitalization increased by 217.685 billion US dollars, which translates to close to 1.57 trillion yuan.
Meanwhile, Hwang In-hoon's personal wealth also jumped to US$91.3 billion on Thursday, surpassing the three heirs of Walmart's founder family and rising to 17th place in the global list of the world's richest people.
Be wary of bubbles
But amidst a wave of optimism, a prominent investor is skeptical about the chipmaker's long-term prospects, believing that there is a bubble in its stock.
Legendary investor Rob Arnott (Rob Arnott), chairman of the investment agency Research Affiliates, said on Thursday that Nvidia's success in the market is based on the idea that it will continue to dominate the semiconductor industry in the future.
In an interview, he said, “There seems to be a bubble. The price-to-sales ratio (PS) is astronomical, and the reason it's astronomical is because their profit margins are absolutely huge.”
“So, will AMD, Intel, and TSMC sit down and say, 'Oh, you can keep profit margins above 50%. You can keep over 90% of the market share. Don't worry'; they won't, they all have to get involved.”
Research Affiliates is an external advisor to Pacific Investment Management Company (PIMCO), a major US asset management company. It was founded by Arnault in 2002. It is a research-based asset management company focusing on innovative asset allocation and alternative indexed products.
Competition is fierce
Arnott said that competition among semiconductor manufacturers will be good news for AI consumers, as it guarantees that AI's computing power will continue to improve while prices will drop.
What is certain is that Nvidia is currently far ahead among chipmakers. The company already anticipates that the second fiscal quarter will still exceed expectations, citing that demand is still greater than supply.
The company's rise comes as the development of artificial intelligence is driving demand for its advanced hardware. But the same is true for other semiconductor manufacturers: TSMC expects the output value of the semiconductor industry (excluding the memory industry) to grow by more than 10% this year, and the foundry industry will grow 20% a year.
Additionally, Bank of America (Bank of America) wrote this month that a technology competition to apply artificial intelligence to products means that multiple chip makers will be sought after based on their respective strengths.