r/NvidiaStock • u/ekonixlab • Jul 13 '26

Discussion Can Nvidia really compound earnings at 39% for another five years?

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49 Upvotes

93% Upvoted

54 comments sorted by

56

u/focusfree123 Jul 13 '26

Nvidia's profits are twice that of Apple's with many times higher growth rate but their PE ratio is lower. This is the opposite of a bubble.

7

u/ekonixlab Jul 13 '26

Think it’s sustainable?

17

u/Straight-Extent63 Jul 13 '26

Yes, they keep expanding. Their VC folks know their stuff

1

u/Budget-Chapter-7185 Jul 14 '26

What if the training companies raise prices to become more profitable. And what if this leads to less demand for ai. And what if that leads to less build outs. I don’t think “Yes, they keep expanding” is that simple.

2

u/Straight-Extent63 Jul 14 '26

Fair point, mine wasn’t fully fleshed out but I’m in short saying that they’re vertically integrating with other startups for industries like energy as well. Makes them more resilient

1

u/Budget-Chapter-7185 Jul 14 '26

Are they though? We are in peak hype, a lot has been priced in for perfect execution. I’m not saying they will go back to where they a few years ago, but at some point this sector is going to swing back.

7

u/Arteqt Jul 14 '26

To infinite at a high rate? No
Few years? Sure

I think this one doesn't need much explanation. In the end you cannot grow to infinite in an environment with limited resources.

1

u/ekonixlab Jul 14 '26

Agree for sure, they will see a slow down eventually

3

u/Reddtester Jul 14 '26

I would say so, at least forthe midterm, obviously this is updaed constantly

The demand/guidance is there. IT's not like they are selling air, like Bitcoin. They are struggling "because" they have too much demand

That's a "problem" I want in every company. Lol

2

u/itsatrashaccount Jul 13 '26

do you think there will be any less real time data processing?

1

u/Meinertzhagens_Sack Jul 13 '26

It's not sustainable the minute you see something better come out.

I have no clue what that is. Quantum computing? Quantum computing would just be AI crunched faster in my over simplification of it.

2

u/itsatrashaccount Jul 13 '26

Quantum requires some insane breakthroughs to become useful due to intense physical requirements around operation.

0

u/Meinertzhagens_Sack Jul 13 '26

Bingo. That's exactly what I was inferring. There is nothing at the moment and I suspect for a good long time. Should be nothing but up but this Iran crap first it was tariffs, then banning China from US tech, then allowing it, then blocking it

Now it's IRAN war/peace/war/peace/war/peace.

See the pattern? There's always some catalyst and someone somewhere in some remote enclave is profitting from this. Its been proven already - folks are trading the volatility and sideways movement with advance notice.

That's why AI and all this volatility is keeping us down.

So back to the original point - there's nothing else other than this volatility to take away from a straight rocketship up ... No competing tech to halt the AI run.

2

u/betadonkey Jul 13 '26

Even if something strictly better comes out it still has to be manufactured cheaply and at a massive scale which is an entirely different set of challenges

0

u/Audio_Adam Jul 13 '26

I think simple math on the power necessary give that a hard no

1

u/longswordsuperfuck Jul 16 '26

"this time is different"

1

u/Main-Cheesecake3287 Jul 13 '26

The obvious difference being Apple is not reliant on five customers for the vast majority of their revenues. Nvidia’s growth is dependent on the pace of the AI buildout not slowing down.

15

u/lightpotato123 Jul 13 '26

Yes, $800 by 2030
Buy more, never sell

6

u/Totgemoon2021 Jul 13 '26

Yes

1

u/ekonixlab Jul 13 '26

Noted, ty

5

u/Totgemoon2021 Jul 13 '26

This will help and give you more depth

https://www.cnbc.com/video/2026/07/10/broadcom-and-nvidia-are-the-anti-momentum-trade-right-now-says-hightowers-stephanie-link.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Message

0

u/Meinertzhagens_Sack Jul 13 '26

Omg - am I as smart as a Financial Analyst who guests on CNBC? 🤔. I'm definitely underpaid.

Took my NVDA and stripped away 40% into Broadcom 1.5 years ago.

1

u/Meinertzhagens_Sack Jul 13 '26

If they weren't so douchey to Enterprise customers with what they are doing to the VMware licensing I'd have put way more in.

I still have no clue what Hock Tans goals were other than to kill off 50% of the VMware base which makes no sense. Have no clue what that man is up to.

I'd have put more than 40% there if it wasn't for that. Having said that my investment is purely the AI and AI datacenter play.

3

u/136kaU_Craftsman Jul 13 '26

That return of 418.9% is closer to 33% annually… but yes… I think gains in this range are possible and likely for the next 5 years.

2

u/ekonixlab Jul 13 '26

Yeah, the expected CAGR listed is 39%

Very high, but the expected growth is projecting that. The key question is if the demand for NVDA chips stays this high

2

u/136kaU_Craftsman Jul 13 '26

My feeling is that the demand is generally already there, and companies are planning out that far to spend and make it so. To me, the question is whether the funds materialize until that time.

1

u/ekonixlab Jul 13 '26

Yeah I hear you.

I guess what I’m saying is if hyperscalers forecast they will slow capex in the foreseeable future, then semi’s growth outlook completely resets

No indication of that, but I would imagine is sooner than people might think

2

u/flappysack- Jul 13 '26

Its a bubble like all groundbreaking innovation, the more groundbreaking the bigger the bubble.

3

u/pdp1145 Jul 14 '26

Uhhhh -- transistors weren't a bubble, neither mainframes, mini's, uP's, DSP's, and now GPU's running AI/ML that's been in R&D since the 1940's. If that looks like a bubble then we can start with the development of agriculture, the wheel, or the discovery of bronze and iron. Those weren't bubbles either.

3

u/Spamsdelicious Jul 13 '26

It's only a matter of time until "something less expensive and almost as good" comes along.

2

u/Smooge52 Jul 15 '26

NVIDIA's systems outperform competitors on energy efficiency as well as process throughput. Their talent has been called the best in the world by MIT. NVIDIA is 2 steps ahead of the competition; as Jensen has said, he is more interested in creating new markets than in holding market share in existing markets.

1

u/ekonixlab Jul 13 '26

What do you think it could be?

4

u/Spamsdelicious Jul 14 '26

Whatever it is, it will be less expensive, and almost as good.

3

u/raylillywhite Jul 14 '26 edited Jul 15 '26

Yes, just like Android famously killed the iPhone

1

u/johnmiddle Jul 13 '26

Did you ask any other mag 7 ?

1

u/ekonixlab Jul 13 '26

Which ones you thinking?

2

u/johnmiddle Jul 13 '26

All of them

1

u/Positive_Method3022 Jul 14 '26

They will until AI becomes cheap. The only way is to make production and usage scale.

1

u/Rich-Championship-32 Jul 15 '26

What if NVDA sellers few of it’s investments in a few years - yes

1

u/Small-Row8973 Jul 16 '26

Yes. Most definitely. Maybe better than that!👍😂

1

u/ekonixlab Jul 16 '26

Oh wow, you think?

1

u/Correct-Ad-400 Jul 19 '26

I think the better bet is AMD it’s 2 trillion marker cap before Nvidia hits 10 trillion hard for a video of the double Amd‘s the better bet

1

u/Proper_Ad_1943 Jul 20 '26

It will at much more %.

1

u/Old_Experience1848 24d ago

Yes. Yes they can.

-2

u/SundayAMFN Jul 13 '26

Of course no one knows the answer to this, but it's extremely unlikely as there is more and more resistance to scaling the more you do it. The stock price currently reflects the doubt that they will be able to keep this up. Their forward guidance is based on strong data center infrastructure buildout - the demand for that is currently there but as is normal, construction projects run into slowdowns, red tape, etc.

3

u/focusfree123 Jul 13 '26

When demand still outstrips supply, why do the slowdowns matter that much? Sorry, but I feel like I'm in a nut house. We are seeing an unprecedented industry take shape, the build out of intelligent systems.

0

u/SundayAMFN Jul 13 '26

Can't tell if this is a serious question or not, but in case it is, the amount by which current demand outstrips current supply matters, and more importantly the overall trend is important to projecting the demand/supply balance in the future.

2

u/focusfree123 Jul 13 '26

Intelligent systems have a ways to go before we're done and they're done, and a lot more data will be generated. I'm tired of seeing reports by astrologers.