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At the end of November, NVIDIA put out an internal memo (that was leaked to Barron's reporter
AI is now 90% of Nvidia revenue: https://incomeshares.com/en-eu/insights/nvidia-revenue-change-since-2020
If 90% of Nvidia revenue were to suddenly disappear, it wouldn’t matter that they used to be the leading maker of gaming hardware — they’d be completely radioactive to investors for the rest of time and their stock would drop to zero. All of their top talent flees to AMD or wherever, and Nvidia becomes a mere footnote in the history of corporate American hubris.
I disagree.
I remember when AMD stock was $2 a share, not that long ago. I bought it at $8. They were basically dead to investors, and unlike Nvidia, they had very little market share in anything or hope of crawling out. But the company itself was still operating.
Even if AI disappears in a puff of smoke, even with their risky “vibe revenue” financing, Nvidia is in a far stronger position than that. They have cash, they aren’t under a pile of debt, and they have tons of diverse non-AI revenue, including oldschool HPC datacenters.
In other words, the stock market is not the real world.