Ethereum Is Not Like Nvidia, Amazon, But More Like Intel, Trader Says: 'Negative Revenue Growth And Negative Profitability'
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 24 2024
0mins
Should l Buy NVDA?
Source: Benzinga
- Crypto Market Analysis: Andrew Kang compares Ethereum to tech stocks, noting similarities in price action with May 2021.
- Market Caution: Despite bullish momentum, Kang warns of potential extreme corrections over a multi-month period.
- Skepticism on Support Levels: Kang expresses doubt about support levels holding amidst market disruptions like Mt Gox estate selling and ETF buyers selling.
- Comparison to Tech Companies: Kang draws parallels between Ethereum's valuation and growth prospects to past tech bubbles rather than sustained growth seen in companies like NVIDIA and Amazon.
- Ethereum's Fundamentals: Kang questions Ethereum's high valuation based on negative revenue growth, profitability, and declining interest in NFTs.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 186.940
Low
200.00
Averages
264.97
High
352.00
Current: 186.940
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Nvidia's Earnings Report to Signal Market Direction
- Market Concentration Analysis: RBC Wealth Management's Rob Sluymer highlights that the concentration of mega-cap tech stocks has significantly increased over the past few years, leading to investors being overweight in these stocks, which have now declined about 7% year-to-date.
- Nvidia Earnings Preview: Nvidia is set to report its fourth-quarter earnings on February 25, and Sluymer believes this will serve as a crucial market indicator; if the results fall short of expectations, it could trigger a larger correction in tech stocks.
- Investor Sentiment Shift: As attention on tech stocks rises, Sluymer notes that some funds are rotating out of these high-valuation stocks into other sectors, a typical behavior in times of high market concentration.
- Future Market Outlook: Should Nvidia's earnings report disappoint, it may lead to a decline in market confidence in tech stocks, potentially resulting in a broader market correction that could impact overall investment strategies.
See More
Nvidia Poised for Strong GPU Sales in China Again
- Massive Market Opportunity: Nvidia has negotiated a deal with the U.S. government to resume GPU sales to China, with CEO Jensen Huang estimating the Chinese market could generate up to $50 billion annually, significantly boosting the company's performance.
- Sales Recovery Expectations: Before the ban, Nvidia projected $8 billion in sales from China for Q2 FY 2025; if sales return to similar levels, GPU sales could exceed $30 billion, presenting substantial growth potential.
- Revenue Growth Forecast: Wall Street anticipates Nvidia's revenue will reach $326 billion for FY 2027, but given the surge in AI computing spending, actual revenue could hit $350 billion, further enhancing market confidence.
- Strong Profitability: If Nvidia achieves $350 billion in revenue while maintaining a 56% profit margin, it could generate $196 billion in profits, and with a reasonable 40x earnings valuation, the stock price could rise to $322, indicating a compelling investment opportunity.
See More
Pentagon Considers Ending Partnership with Anthropic Amid AI Concerns
- Partnership Review: The Pentagon is reassessing its relationship with AI firm Anthropic, as it may soon be labeled a 'supply chain risk,' which would significantly impact companies working with the Pentagon, forcing them to certify they do not use Anthropic's Claude AI.
- Separation Challenges: A Pentagon official noted that disentangling from Anthropic would be 'an enormous pain,' emphasizing that they would ensure the company 'pays a price' for this situation, indicating a tense and complex relationship between the two parties.
- Contract Value: Anthropic's contract with the Pentagon is valued at up to $200 million out of its $14 billion annual revenue, highlighting the importance of this contract to Anthropic while also reflecting the Pentagon's reliance on AI technology.
- Terms Relaxation: Despite the Pentagon's concerns over the strictness of Anthropic's usage terms, the company is prepared to relax these terms to prevent its tools from being used for mass surveillance of Americans or for developing autonomous weapons, showcasing its struggle between ethical considerations and business interests.
See More
AI Boom Drives Palantir and Nvidia Stock Surge
- Palantir Stock Potential: Since the release of ChatGPT in November 2022, Palantir's shares have surged 1,650%, currently priced at $132, with analysts setting a target price of $199, indicating a 51% upside and showcasing its strong growth potential in the AI platform market.
- Nvidia Market Leadership: Nvidia's stock has risen 980% in the same period, currently trading at $183, with a median target price of $250 from analysts, suggesting a 37% upside and highlighting its sustained leadership in AI infrastructure.
- Strong Business Growth: Palantir has accelerated revenue growth for 10 consecutive quarters, achieving a Rule of 40 score of 127% in Q4, reflecting exceptional business fundamentals, with Morgan Stanley analysts calling it the best fundamental story in software.
- Cautious Investor Advice: Despite Palantir's 37% decline from its peak, its high P/E ratio of 205 warrants caution among investors, recommending small positions to mitigate risks if the company fails to meet Wall Street's lofty expectations.
See More
Cramer Discusses AI Trust Issues and Challenges
- Current AI Accuracy: Cramer highlighted Nvidia CEO Jensen Huang's assertion that AI currently operates at about 90% accuracy, which, while impressive, leaves a 10% gap that undermines trust in high-stakes environments, affecting professional adoption.
- AI Hallucination Issues: Cramer shared an anecdote about the AI model Gemini mistakenly claiming he was from Rockport, Massachusetts, illustrating the unreliability of AI in handling basic facts, which diminishes public trust in these technologies.
- Trust Crisis in Professional Fields: Cramer questioned the applicability of current AI models in industries requiring high precision, emphasizing that no major law firm would rely on such technology for real clients, highlighting the limitations of AI in professional settings.
- Future Outlook and Confidence: While Cramer remains optimistic about AI's future, he believes that in the short term (this year or next), the technology will not reach a reliable level, indicating that industries need more time to adapt and build trust in these innovations.
See More
Micron Technology Shares Surge 314% Amid AI Demand
- Stock Surge: As of February 13, Micron Technology (MU) shares have soared 314% over the past year, reflecting strong market confidence in its growth potential, particularly amid surging AI demand.
- Profitability Metrics: Micron's trailing P/E ratio stands at 39, which, while relatively high, remains within a reasonable range for fast-growing tech stocks, indicating investor expectations for future profitability.
- Future Earnings Outlook: With a forward P/E ratio of just 12, significantly lower than Nvidia's 24, Micron presents a more attractive valuation for projected income, potentially drawing more investor interest.
- Strong Financial Performance: Micron reported a net income of $5.2 billion in Q1 of its 2026 fiscal year, nearly tripling last year's figures, and has already sold out its memory capacity for 2026, signaling robust earnings growth ahead.
See More
Nvidia's Earnings Report to Signal Market Direction
- Market Concentration Analysis: RBC Wealth Management's Rob Sluymer highlights that the concentration of mega-cap tech stocks has significantly increased over the past few years, leading to investors being overweight in these stocks, which have now declined about 7% year-to-date.
- Nvidia Earnings Preview: Nvidia is set to report its fourth-quarter earnings on February 25, and Sluymer believes this will serve as a crucial market indicator; if the results fall short of expectations, it could trigger a larger correction in tech stocks.
- Investor Sentiment Shift: As attention on tech stocks rises, Sluymer notes that some funds are rotating out of these high-valuation stocks into other sectors, a typical behavior in times of high market concentration.
- Future Market Outlook: Should Nvidia's earnings report disappoint, it may lead to a decline in market confidence in tech stocks, potentially resulting in a broader market correction that could impact overall investment strategies.
See More
Nvidia Poised for Strong GPU Sales in China Again
- Massive Market Opportunity: Nvidia has negotiated a deal with the U.S. government to resume GPU sales to China, with CEO Jensen Huang estimating the Chinese market could generate up to $50 billion annually, significantly boosting the company's performance.
- Sales Recovery Expectations: Before the ban, Nvidia projected $8 billion in sales from China for Q2 FY 2025; if sales return to similar levels, GPU sales could exceed $30 billion, presenting substantial growth potential.
- Revenue Growth Forecast: Wall Street anticipates Nvidia's revenue will reach $326 billion for FY 2027, but given the surge in AI computing spending, actual revenue could hit $350 billion, further enhancing market confidence.
- Strong Profitability: If Nvidia achieves $350 billion in revenue while maintaining a 56% profit margin, it could generate $196 billion in profits, and with a reasonable 40x earnings valuation, the stock price could rise to $322, indicating a compelling investment opportunity.
See More
Pentagon Considers Ending Partnership with Anthropic Amid AI Concerns
- Partnership Review: The Pentagon is reassessing its relationship with AI firm Anthropic, as it may soon be labeled a 'supply chain risk,' which would significantly impact companies working with the Pentagon, forcing them to certify they do not use Anthropic's Claude AI.
- Separation Challenges: A Pentagon official noted that disentangling from Anthropic would be 'an enormous pain,' emphasizing that they would ensure the company 'pays a price' for this situation, indicating a tense and complex relationship between the two parties.
- Contract Value: Anthropic's contract with the Pentagon is valued at up to $200 million out of its $14 billion annual revenue, highlighting the importance of this contract to Anthropic while also reflecting the Pentagon's reliance on AI technology.
- Terms Relaxation: Despite the Pentagon's concerns over the strictness of Anthropic's usage terms, the company is prepared to relax these terms to prevent its tools from being used for mass surveillance of Americans or for developing autonomous weapons, showcasing its struggle between ethical considerations and business interests.
See More
AI Boom Drives Palantir and Nvidia Stock Surge
- Palantir Stock Potential: Since the release of ChatGPT in November 2022, Palantir's shares have surged 1,650%, currently priced at $132, with analysts setting a target price of $199, indicating a 51% upside and showcasing its strong growth potential in the AI platform market.
- Nvidia Market Leadership: Nvidia's stock has risen 980% in the same period, currently trading at $183, with a median target price of $250 from analysts, suggesting a 37% upside and highlighting its sustained leadership in AI infrastructure.
- Strong Business Growth: Palantir has accelerated revenue growth for 10 consecutive quarters, achieving a Rule of 40 score of 127% in Q4, reflecting exceptional business fundamentals, with Morgan Stanley analysts calling it the best fundamental story in software.
- Cautious Investor Advice: Despite Palantir's 37% decline from its peak, its high P/E ratio of 205 warrants caution among investors, recommending small positions to mitigate risks if the company fails to meet Wall Street's lofty expectations.
See More
Cramer Discusses AI Trust Issues and Challenges
- Current AI Accuracy: Cramer highlighted Nvidia CEO Jensen Huang's assertion that AI currently operates at about 90% accuracy, which, while impressive, leaves a 10% gap that undermines trust in high-stakes environments, affecting professional adoption.
- AI Hallucination Issues: Cramer shared an anecdote about the AI model Gemini mistakenly claiming he was from Rockport, Massachusetts, illustrating the unreliability of AI in handling basic facts, which diminishes public trust in these technologies.
- Trust Crisis in Professional Fields: Cramer questioned the applicability of current AI models in industries requiring high precision, emphasizing that no major law firm would rely on such technology for real clients, highlighting the limitations of AI in professional settings.
- Future Outlook and Confidence: While Cramer remains optimistic about AI's future, he believes that in the short term (this year or next), the technology will not reach a reliable level, indicating that industries need more time to adapt and build trust in these innovations.
See More
Micron Technology Shares Surge 314% Amid AI Demand
- Stock Surge: As of February 13, Micron Technology (MU) shares have soared 314% over the past year, reflecting strong market confidence in its growth potential, particularly amid surging AI demand.
- Profitability Metrics: Micron's trailing P/E ratio stands at 39, which, while relatively high, remains within a reasonable range for fast-growing tech stocks, indicating investor expectations for future profitability.
- Future Earnings Outlook: With a forward P/E ratio of just 12, significantly lower than Nvidia's 24, Micron presents a more attractive valuation for projected income, potentially drawing more investor interest.
- Strong Financial Performance: Micron reported a net income of $5.2 billion in Q1 of its 2026 fiscal year, nearly tripling last year's figures, and has already sold out its memory capacity for 2026, signaling robust earnings growth ahead.
See More
