A history of stocks with astronomical price-to-sales ratios doesn’t bode well for Nvidia

  • 📰 CNBC
  • ⏱ Reading Time:
  • 24 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 13%
  • Publisher: 72%

Business News News

Business Business Latest News,Business Business Headlines

The A.I.-driven run in Nvidia's stock this year bodes poorly for its future based on the valuation patterns of other shares that reached such heights.

The A.I.-driven run in Nvidia's stock this year has lifted its valuation to an eye-watering level that bodes poorly for its future based on the patterns of other shares that reached such heights. At above 36 times sales, Nvidia's shares are trading at their highest valuation ever, according to Trivariate Research. Adam Parker's research firm looked at all the other times in market history when stocks traded above a 36 price-to-sales ratio and what happened next.

revenue windfall. Annual revenue for Nvidia last year was $26.9 billion. For the four other members of the elite club, annual sales are a minimum of about $200 billion. To be clear, Parker and his firm are not advocating shorting Nvidia's stock any time soon. They were just passing on the historical data to clients. Nvidia "is anything but average," wrote Parker. "We continue to think it is possible Nvidia could be a $2 trillion market cap.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 12. in BUSİNESS

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Tech’s Newest Trillion Dollar CompanyOn today’s What Next TBD: Nvidia went from being known mostly among gamers, to Silicon Valley’s heaviest weight class.
Source: Slate - 🏆 716. / 51 Read more »

Goldman Sachs likes this Mexican telecom stock to play the country’s red-hot marketGoldman this week initiated the stock with a buy rating and a price target of $6.10 per share on its U.S.-listed shares.
Source: CNBC - 🏆 12. / 72 Read more »