Torsten Sløk, the Chief Economist from Apollo Asset Management put out a chart a few weeks back - illustrating that NVIDIA (NVDA) currently has a market capitalization larger than 5 of the countries that comprise the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States). Moreover, Nvidia just eclipsed Apple as the largest company in the world. Amazingly, Nvidia “now has a greater market value than the entire German stock market and the entire Italian stock market,” according to columnist Jason Zweig.NVIDIA’s forward Price-to-Earnings Ratio, a metric to gauge value in a stock is 34.48, which, although a little expensive, is no where near Forward PE Ratio of the Dot Com Bubble Darling, Cisco (CSCO), which had a Forward PE Ratio of 472!
The purpose of this chart and accompanying verbiage is not to debate the current value of Nvidia but to highlight the extent to which the stock has appreciated and to illustrate reference points for emphasis. It is also interesting to note that revenue for the chip giant has risen more than thirty-fold over the past fifteen years. However, we do think we are going through a new technological revolution that is centered around artificial intelligence and NVDA is the backbone of that. Keep in mind that this tailwind is not solely limited to NVDA, but includes technology companies like Apple (AAPL), Microsoft (MSFT), Advanced Micro Devices (AMD), Palantir (PLTR), Dell (DELL), Meta Platforms (META), Adobe (ADBE) and Uber (UBER). Outside that sector, importantly, companies that can embrace AI to become more efficient and productive will be the winners and we believe this will not be limited to a specific industry.
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