NVDA
📉 DeepSeek’s emergence could reduce demand for NVIDIA’s GPUs, impacting its market value.
⚠️ Damodaran’s updated model suggests a potential decrease in the expected market size for AI chips, affecting NVIDIA’s revenue growth.
💰 NVIDIA’s stock might be overvalued, according to Damodaran’s analysis, especially with the rise of lower-cost AI solutions.
🤔 The future of AI may split into high-cost and low-cost segments, potentially limiting NVIDIA’s dominance.
@adriarivero:
“Actions like NVIDIA have fallen by 17%, losing 589 billion, which is the biggest drop in absolute value in history. Aswath Damodaran, known as the ‘god of valuation,’ has analyzed the impact of DeepSeek from the perspective of market value, investment in AI, and the structure of the technology industry. Damodaran has updated his NVIDIA model under the narrative that there would be two sectors. There are several changes in the variables, but the biggest change occurs in the expected size of the potential AI chip market, which, according to him, would go from 500 to 300 billion dollars. Damodaran previously estimated a price of $87 in September 2024. Seeing this narrative, he has decreased the market size and, therefore, the company’s revenue growth, in addition to changing other variables such as the cost of capital, which, when raised, lowers stock valuations. Before the changes, Damodaran had already sold part of his position because, according to him, the valuation was expensive or overvalued, but now it would be even more so, since NVIDIA today is at 118, and he estimates a price of around 76.”
Watch the exact part of the video where Adrià Rivero talks about NVIDIA here:
View the video on YouTube.
Read more articles by the world’s top 100 analysts on NVIDIA (NVDA) at the following link. NVDA stock.
