For example, a $10 monthly fee is a lot easier to swallow than a $1000 investment into the latest chipset. Semis are just not as sticky as SaaS usually is. As uncertainty increases, corporate investments slow. We're genuinely in unchartered waters and the jury is very much still out on where we will go from here.īut unfortunately for chip makers AMD and Nvidia, regardless of the outcome, uncertainty can be harmful. Inflation is rampant, supply chain issues remain, and Russia has closed the tap on Europe for energy… And that's all while we try to reopen the economy we artificially closed due to the COVID-19 pandemic. Provide my valuation based on two different frameworks for both stocksīusiness Update and Macro Discussion Recessionary Fearsįor the entirety of 2022, it's felt like the entire financial community has been laser-focused on the odds of a recession. Perform a financial analysis between AMD and NVIDIA Provide a business update for AMD and NVIDIA And that's after having crashed almost 50% off of their highs set in late 2021.īut can this trend continue? Do shares still represent a good value at today's prices? And furthermore, how might a potential recession, and/or Chinese chip ban affect these stocks? Within this Article, I'll: Flash forward to today, Nvidia's shares 5X'd and AMD's 10x'd. Just 5 years ago, Nvidia's stock traded at around $40 a share, AMD, around $10 a share. Especially, the valuation of some of the most important chip stocks on the planet, Nvidia ( NASDAQ: NVDA ) and AMD ( NASDAQ: AMD ).
It's probably a bit too early to tell whether we are through the worst of it but now seems like a prudent time to pause and think about valuation.
to say the least.Įntering the new year, I wondered if the tech stock crash of 2021 was behind us, or if we were at the start of something greater, something far more severe. For growth investors, 2022 has been a rocky year.
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