It is rare for a CEO to comment on another company’s valuation, but Sebastian Siemiatkowski didn’t mince words. “You can say, ‘I disagree with the fact that Nvidia is worth that much,'” he told the FT. This blunt assessment challenges the consensus that has driven Nvidia to $4.5 trillion.
Valuation matters. At $4 trillion, a company needs to generate astronomical profits for decades to justify the price. If the “irrationality” Pichai sees means that those profits are a mirage, the stock is mathematically doomed to fall.
The crypto market realized this about “altcoins” with billion-dollar valuations and zero revenue. The 25% drop in the crypto market is a return to reality. The stock market is next in line for this reality check.
When a fintech CEO questions the valuation of the hardware supplier powering his industry, it’s time to pay attention.
$4 Trillion for Nvidia? “I Disagree,” says Klarna Boss
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