A Third Time Up the Roller Coaster

AI is NVIDIA’s third climb up a steep slope.

First came gaming in the late 2010s.

Then cryptocurrency.

Now artificial intelligence.

Each wave pushed revenue growth above 50% & with it, P/E1 ratios surged. P/E ratios rose before the revenue growth materialized.

nvidia_pe_chart

There’s a four-quarter offset between P/E ratio & TTM2 revenue growth. When you shift revenue growth forward by a year, the correlation with P/E jumps to 0.80.

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