Nvidia passes its quarterly stress test

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The problem with the future is that this has not happened yet. Thus, the rates on the company, the cost of which are largely in the educated assumptions, not for a weak stomach. Nvidia, Palantir, Applovin and Microstrategy-four best US technology stock 2024-all this puts investors in their steps.

Nvidia, thanks to its size, inspires more cortisol than most. In 3Tn manufacturers of chips, whose silicon power boom of artificial intelligence is almost three times in market capitalization in 2024, but this year about 6 percent decreased. His income in the fourth quarter is conveniently won by analysts’ expectations, but investors are more focused on what’s next.

As long as everything is planned. Boss Jensen Juan says the demand for new powerful chips company “strange”. The profitability is slightly squeezed by new ranges, but profit for the current three -month period should be higher than previously thought. The trouble is that the details are elusive. Every quarter is a new nail.

Buying a company’s stock is always a bid on long -range revenue streams; The lion’s share of value comes from “terminal meaning”. For example, take analysts’ estimates for the next five years about NVIDIA cash flows, according to visible alpha, reducing them back 10 percent a year, and today they cost just over 500 billion. This means that 80 percent of the NVIDIA market value for $ 3tn consists of money after 2030.

Much can happen in these short windows of time. Just ask millions of investors who have never heard of Nvidia five years ago. And technological reserves are unusually sensitive to sudden shifts. For example, Nvidia receives about a third of the profit only from three customers, which in turn sell their goods to others. Its sales to China are subject to tariff policy, which, as the Trump administration has shown several times, can include pennies.

The rest of this fantastic four have a tougher time. Palantir’s software company has fallen on the reports that the Pentagon wants to reduce budgets without helping a company that receives more than half its revenue from governments. But it still trades about 50 times the income forward, causing Nvidia 16 times to feel positive. Meanwhile, Microstrategy has its unique quirks: mostly a piggy bank filled with bitcoin, the price of which is always a mercury – pays.

Applovin’s return is particularly sudden. The company that brokerel the advertising space in gaming applications recorded after two short sellers messages, suggested that its rapid growth could be less sustainable than it looked. The slower, more predictable companies are much less vulnerable to this kind of attack on the future investors.

At least for Nvidia, at least certain. Its largest customers – companies such as Microsoft and Amazon – have buckets of cash and decided to spend it on chips. Currently, they have little, if any, other options when it comes to AI processors. And investors are still relaxed. Stress -test was made; The other will be soon enough.

john.foley@ft.com