Exciting news! NVIDIA has surpassed Microsoft as the world’s most valuable company. I saw a similar movie play out before when Cisco passed Microsoft as the #1 company at the dawn of the Internet era. I talked with Asa Fitch of The Wall Street Journal about the parallels between this moment and what I experienced in 2000. The main difference, though, is that AI is moving at a rate we’ve never seen before – 10x faster than what we saw with the adoption of the Internet. Product cycles that used to take five years are now accomplished in 18 months. This is all evident in Nvidia’s growth over the last two years, increasing by a remarkable 539%. Congrats to my friend Jensen Huang on this major achievement. With the AI race underway, the fun is just getting started!
Carl Gruber
1mo
I hear a lot of people saying this is a repeat of the internet bubble in 2000. While I can see some similarities, I strongly feel this is mostly wrong. Whereas many silly ideas were seeing huge funding in 2000, AI has a transformative nature to it that we're still learning how to utilize. I think it's a very safe bet that business in the next 5-10 years will look very different as a direct result of organization AI adoption.
John Osley
1mo
I joined Cisco several months before we briefly held the title of world's most valuable company. I often commented at the time that joining Cisco was like playing Major League Baseball against minor league teams. Cisco's ascent and success in the late 90's and 2000's is directly attributed to your vision and leadership, John Chambers. Thank you for creating the culture of inspiration, innovation, and aspiration that exemplified my experience at Cisco. Today, I employ the knowledge, lessons, and relationships from my time at Cisco as a blueprint for success in the companies I work for and the teams I lead. #grateful
Bobby Stutzman
1mo
John Chambers I understand the parallels. But what everyone needs to understand is all of the Nvidia chips that have already been deployed to this point, represents a very small fraction of what will be deployed over the next 24-36 months. All of the stock analysts over the past several weeks, talk and act like NVIDIA just design AI chips. I believe their infrastructure, software, and global ecosystem, including their unrivaled partner network, make them untouchable. I wouldn't be surprised if their market cap is sitting North of $6T 18 months from now.
I take it the league tacked on most valuable company are just based on market cap. That’s great . Let’s also judge consumers as if they have no liabilities. Loan officers do that, right? I suggest that instead of looking at at market cap, we look at market cap minus debt, i.e. enterprise value (EV). For the companies in the top tier of market cap, at least, we should be transparent about their EV. The rankings in EV may not be same as in market cap.
Sanjeev Gupta
1mo
The reflection is very timely, John. Still recall that back then Cisco was touted as possibly the first trillion dollar company with market cap roughly $500B. Well since then the size of US and the world economy has grown about three times so seeing trillion dollar companies will become common place. And given the AI penetration in our everyday lives, it goes beyond what you said - the internet will change the way we work, live, and play. Now perhaps we can add the way we Think. Indeed exciting times ahead.
Mahmoud Dasser
1mo
Sharing chatGPT view (not mine) based on simple prompt : Today’s AI Boom vs. 2000´s Internet Bubble Similarities: 1. Speculation:Driven by speculative investments. 2. Symbols of Growth:Companies like Cisco (2000) and Nvidia (now) symbolize their technological eras. 3. Hype:Both technologies were seen as revolutionary. Differences: 1. Maturity:Internet tech was new in 2000; AI is now more mature. 2. Economic Context:2000 had high optimism and low rates; today's conditions are more cautious. 3. Business Models:Dot-coms had unproven models; many AI companies are profitable. 4. Regulation:Internet regulations were developing in 2000; AI regulations are more defined now. Risks: 1. Overvaluation:Speculative growth may not meet expectations. 2. Hurdles:Ethical concerns and data privacy issues. 3. Saturation:Intense competition could lower margins. 4. Downturn:Economic issues could reduce AI investments. 5. Regulation:New rules could increase costs. 6. Sentiment:Negative news could trigger sell-offs. Conclusion: AI's growth, though on solid ground, carries risks. Sustainable growth depends on advancements, realistic valuations, and balanced regulation.
Interesting insights! 🤗 We just updated our frequent “trillion-dollar club” post, now featuring Nvidia at the top. It really helps put the market in perspective: https://www.visualcapitalist.com/all-of-the-worlds-trillion-dollar-companies/
Louis Tsai
1mo
I remember when I worked at Cisco in 2000. My stock option strike price was around $70. Then it never reached that price again. Nvidia seems to be different this time. The revenue side is approaching $100 billion a year. There is not a substitute of its high end chip at the moment. I don’t think there will be one in the next 12 months. Nvidia will have a honeymoon before a competitive chip is available. Demand of AI chips is increasing and Nvidia will enjoy to be the sole supplier until companies chasing AI die down. It doesn’t seem to be happening in the near future.
Sancha N.
1mo
If Nvidia was just about compute, then I think it’s just a matter of time before that gets commoditized as we see competitors popping up everywhere. But Nvidia also has a mature stack of software that creates the stickiness for their compute. Competitors will keep coming at Nvidia but they have a few years of lead time.
Not working for a living
1moAnd today... CSCO MKT CAP: 185.20B MSFT MKT CAP: 3.32T. It was an aberration.