The main focus for investors should be about making money, not giving lessons about value investing while sitting on the sidelines, watching. Even the king of s - From Seeking Alpha
However, after the introduction of Drive PX 2 for autonomous driving, the Tesla P100 for data centers, and today's expected release of the ultimate GeForce FTX1080 for gaming, the EV/R multiple jumped 176%, from a ratio of 3 to above 8.
This increase of 5 points in the EV/R ratio means that the market is pricing an increase of $10.84 billion in revenues - to make things clear, we arrived at this number assuming that a ratio of 3 is perfect for Nvidia - which means that revenue needs to increase by 157% from current levels (TTM revenue is $6.91 billion) to justify the company's valuation.
That's because the most promising sector for Nvidia, the autonomous car industry, is expected to have 10 million cars on the road by 2020.
Investing in the S&P 500 for the last five years have yielded 73%, whereas, investing in any of the best five story stocks (Tesla (NASDAQ:TSLA), Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Nvidia), would have yielded between 372% and 800%.
Not to mention, Qualcomm (NASDAQ:QCOM), used to have an EV/R of 8, similar to that of NVDA, with its stock appreciating since that time.