I decided to share some short thoughts on the semiconductor space and the AI frenzy that we are witnessing. Nvidia and it's future, SLMs and what the GPT5 moment means for the broader space.
Really enjoyed this post. Thanks for putting it together. One question though.
Your valuation, that's for the terminal period, correct? It seems as though there's no income discounted in the next 6 years (the period going from $1T to $2T). It seems the revenue and income assumptions are for a period beyond that installation period that takes us to $2T
It's a rounding error in terms of overall value obviously. Just wanted to see if I was missing anything
Thank you, Joel. Yes, you are correct. The assumption is for the terminal period, and as you correctly alluded, the reason is that I think the value in between (cash ob balance sheet, buybacks, dividends) will be a rounding error in the whole context of things.
Thank you, Richard. I appreciate the confirmation. My reason for asking is because you are much better at this sort of work than I am so I wanted to make sure I was following along myself as a sort of mental rep. Thanks for confirming. Best
I also ran a reverse DCF or Nvidia a couple of weeks ago and the explicit growth assumptions you have to make are keeping me sane and help to keep the fear of missing out away.
My best read of the morning! Everyone is hot on the case of when the current semis / GPU cycle will turn…Rihard has a very thought provoking perspective, imo. Thanks, sir
The OpenAI CTO said that GPT-5 will be released at the end of 2025 or the beginning of 2026. Actually, as a professional tech person, I am more interested in the development of Claude than GPT. The only advantage of GPT right now is its first-mover advantage. In other aspects of use, it can't compare to Claude.
Really enjoyed this post. Thanks for putting it together. One question though.
Your valuation, that's for the terminal period, correct? It seems as though there's no income discounted in the next 6 years (the period going from $1T to $2T). It seems the revenue and income assumptions are for a period beyond that installation period that takes us to $2T
It's a rounding error in terms of overall value obviously. Just wanted to see if I was missing anything
Thank you, Joel. Yes, you are correct. The assumption is for the terminal period, and as you correctly alluded, the reason is that I think the value in between (cash ob balance sheet, buybacks, dividends) will be a rounding error in the whole context of things.
Thank you, Richard. I appreciate the confirmation. My reason for asking is because you are much better at this sort of work than I am so I wanted to make sure I was following along myself as a sort of mental rep. Thanks for confirming. Best
Very good read!
I also ran a reverse DCF or Nvidia a couple of weeks ago and the explicit growth assumptions you have to make are keeping me sane and help to keep the fear of missing out away.
Thx. Yeah exactly.
My best read of the morning! Everyone is hot on the case of when the current semis / GPU cycle will turn…Rihard has a very thought provoking perspective, imo. Thanks, sir
Thx for the kind words!
The OpenAI CTO said that GPT-5 will be released at the end of 2025 or the beginning of 2026. Actually, as a professional tech person, I am more interested in the development of Claude than GPT. The only advantage of GPT right now is its first-mover advantage. In other aspects of use, it can't compare to Claude.