ONE SLIDE: NVIDIA Market Capitalization, & What I See as Its Likely Implications

My guess? NOT INVESTMENT ADVICE: When NVIDIA's fundamental equity value goes up by $1.00, the fundamental equity value of the tech sector as a whole goes down by -$.67. There is a positive consumer...

My guess? NOT INVESTMENT ADVICE: When NVIDIA's fundamental equity value goes up by $1.00, the fundamental equity value of the tech sector as a whole goes down by -$.67. There is a positive consumer surplus offset, although Katie Martin’s rant on how “ lived everyday experience… remains, honestly, rubbish…. AI widget[s]… rewrite my emails… with material scraped from other emails…” suggests that that offset is not (yet?) large…

My view NVIDIA’s extraordinary market-cap gains are casting long shadows over its customers’ long-term profitability. Each extra $1.00 of its market cap is bad news for tech-sector profitability as a whole...

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Katie Martin is almost always excellent, but not, I think, this time, which is why I am picking on her.

She asks (or rather her headline writers ask): “AI stocks: what if this time it really is different?”

The quick answer: It isn’t.

Or, at least, it is very unlikely to be. But that does not mean “AI” is not very interesting. It is.

But what comes after this is for the TL;DR bucket unless you are simultaneously all of a financial-valuation, industrial-organization, and silicon-technology nerd: