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That’s got to be Tesla. Nvidia’s PE is still half that of Tesla.

hattmall 2y ago
The more interesting dynamic with Nvidia though is that most of its revenue is actually fueled by bubbles as well. Teslas earnings are much more grounded and natural.
- germinalphrase 2y ago
  “Teslas earnings are much more grounded and natural.” How do you rationalize Tesla being valued higher than the combined valuation of the next ten car companies? They will be the only one left standing?
  - jansan 2y ago
    I think you misunderstand that comment. Tesla may be hopelessly overvalues, but their revenue may grow in future. OTOH Nvidia's revenue may have peaked.
    - dzonga 2y ago
      how is their revenue gonna grow in the future when they don't have an edge in their main core product. Batteries are by panasonic. while BYD makes its own batteries. Tesla has no moat. At least Nvidia has CUDA
    - deleted 2y ago
      [deleted]
    - germinalphrase 2y ago
      Maybe so. Their valuation coming down to earth would certainly ripple. Whatever precedes that fall, it seems unlikely that revenues would remain unaffected. In all, it’s unfortunate that the US’s most prominent electric vehicle manufacturer is wrapped up in so much noise. Competition is only going to stiffen.
- sulam 2y ago
  You forgot to add “Long TSLA”
- throwaway2037 2y ago
  I don't why this comment was downvoted. You raise an important point. I also noticed that you (carefully?) made no comment about Telsa's stock price. Instead, you only focused on their earnings -- which are excellent for a car company.
  - simianparrot 2y ago
    It got downvoted for not parroting “Tesla bad” even if it didn’t claim anything to the contrary and is simply observing one fact — Tesla’s earnings being great. That’s not acceptable apparently.
    - scarface_74 2y ago
      Earnings aren’t great though…
  - scarface_74 2y ago
    How are there earnings excellent? Sales are declining in both real terms and market share. The brand is globally toxic. Net income is down 70% year over year and they are now losing money.
- diamond559 2y ago
  Grounded as in they are heading straight down to the ground sure.
schmidtleonard 2y ago
PE isn't a cheat code to rational stock valuation, it's the "nothing ever changes" assumption dressed up in a formula. PE looks at past earnings, while the price of a stock buys its future earnings. A modest PE on NVDA says "I expect datacenter revenue to continue" while a modest PE on TSLA would say "I expect robotaxi to fail." These are fair opinions to have, as are their opposites, but if datacenter revenue collapses then today's modest PE won't save NVDA and if TSLA can pull off robotaxi then today's high PE will be vindicated. Stocks are all about Future Earnings, but you can't put that in a column and sort by it so we have PE. You can certainly have success while avoiding high PE stocks, but you are on a site about startups and your name suggests you work in the tech sector, which are both places where high PE often does make sense and it pays to be familiar with the reasons.
- marcosdumay 2y ago
  > a modest PE on TSLA would say "I expect robotaxi to fail." No. Just having competition is enough to destroy the expectations on TSLA. And realistically, they are abut last on that race, being thrown out of track about a decade ago and never managing to make anything work since then. So, yeah, betting on no competition is a very weird option.
  - JKCalhoun 2y ago
    Good point. With BMW, Lexus, Audi, Mercedes, Porsche — all with luxury EV's — Tesla really is looking like an also-ran. I'm not in that circle of clientele though so I don't know: are any of these now seen as the luxury electric car?
    - marcosdumay 2y ago
      I'm really not in that market :) But the market of luxury cars isn't enough to sustain a company with the valuation of Tesla. If interest rates ever stay non-zero, they will need to take almost the entire cars market worldwide, or something else with similar size.
- Yossarrian22 2y ago

The more interesting dynamic with Nvidia though is that most of its revenue is actually fueled by bubbles as well. Teslas earnings are much more grounded and natural.

germinalphrase 2y ago
“Teslas earnings are much more grounded and natural.” How do you rationalize Tesla being valued higher than the combined valuation of the next ten car companies? They will be the only one left standing?
- jansan 2y ago
  I think you misunderstand that comment. Tesla may be hopelessly overvalues, but their revenue may grow in future. OTOH Nvidia's revenue may have peaked.
  - dzonga 2y ago
    how is their revenue gonna grow in the future when they don't have an edge in their main core product. Batteries are by panasonic. while BYD makes its own batteries. Tesla has no moat. At least Nvidia has CUDA
  - deleted 2y ago
    [deleted]
  - germinalphrase 2y ago
    Maybe so. Their valuation coming down to earth would certainly ripple. Whatever precedes that fall, it seems unlikely that revenues would remain unaffected. In all, it’s unfortunate that the US’s most prominent electric vehicle manufacturer is wrapped up in so much noise. Competition is only going to stiffen.
sulam 2y ago
You forgot to add “Long TSLA”
throwaway2037 2y ago
I don't why this comment was downvoted. You raise an important point. I also noticed that you (carefully?) made no comment about Telsa's stock price. Instead, you only focused on their earnings -- which are excellent for a car company.
- simianparrot 2y ago
  It got downvoted for not parroting “Tesla bad” even if it didn’t claim anything to the contrary and is simply observing one fact — Tesla’s earnings being great. That’s not acceptable apparently.
  - scarface_74 2y ago
    Earnings aren’t great though…
- scarface_74 2y ago
  How are there earnings excellent? Sales are declining in both real terms and market share. The brand is globally toxic. Net income is down 70% year over year and they are now losing money.
diamond559 2y ago
Grounded as in they are heading straight down to the ground sure.

schmidtleonard 2y ago

PE isn't a cheat code to rational stock valuation, it's the "nothing ever changes" assumption dressed up in a formula. PE looks at past earnings, while the price of a stock buys its future earnings. A modest PE on NVDA says "I expect datacenter revenue to continue" while a modest PE on TSLA would say "I expect robotaxi to fail." These are fair opinions to have, as are their opposites, but if datacenter revenue collapses then today's modest PE won't save NVDA and if TSLA can pull off robotaxi then today's high PE will be vindicated. Stocks are all about Future Earnings, but you can't put that in a column and sort by it so we have PE. You can certainly have success while avoiding high PE stocks, but you are on a site about startups and your name suggests you work in the tech sector, which are both places where high PE often does make sense and it pays to be familiar with the reasons.

marcosdumay 2y ago
> a modest PE on TSLA would say "I expect robotaxi to fail." No. Just having competition is enough to destroy the expectations on TSLA. And realistically, they are abut last on that race, being thrown out of track about a decade ago and never managing to make anything work since then. So, yeah, betting on no competition is a very weird option.
- JKCalhoun 2y ago
  Good point. With BMW, Lexus, Audi, Mercedes, Porsche — all with luxury EV's — Tesla really is looking like an also-ran. I'm not in that circle of clientele though so I don't know: are any of these now seen as the luxury electric car?
  - marcosdumay 2y ago
    I'm really not in that market :) But the market of luxury cars isn't enough to sustain a company with the valuation of Tesla. If interest rates ever stay non-zero, they will need to take almost the entire cars market worldwide, or something else with similar size.
Yossarrian22 2y ago