Does the price of "invidia" reflect its mysterious future in artificial intelligence?

From time to time, a very dominant business appears and grows very quickly, making it look like the only arrow that holds all people’s interest. Of course, I’m talking about “Invidia”, the Giant Chips business whose products hold artificial intelligence. Her shares have achieved an excellent jump of 4000% over the past five years, making them one of the three most valuable companies in the world, along with “Microsoft” and “Apple”. It is worthy to pay attention, “Invidia” deserves all this attention. The share in the artificial intelligence chips market is approaching 90%. The profit margin is 57% of its $ 80 billion turnover, which is the highest revenue ever between companies with similar profitable profitability within the S&B 500 index. Sales have risen 64% annually over the past five years, which is the highest growth rate among companies listed in the index. Obviously, “Invidia” is a wonderful business, but is it a wonderful investment? To answer this question, one must also take into account the assessment of the business, which often represents the other side of profitability. The companies grow quickly and very profitable closer to a price bonus, and ‘Inviteia’ is no exception to this function. By evaluating its 76 times the subsequent operating profit for a year, this evaluation is more than three times the ‘S&B 500’ rating, and the weakness of “Microsoft” and “Apple”. Investors will undoubtedly say that they bet on the future of “invitation”, not the past, and that future growth justifies the current price. It is useful for Bloomberg to collect the estimates of the ‘long -term’ gains growth for analysts, representing the annual rate that is expected to grow through the profits per share per share during the next business cycle, which is usually from three to five years. The growth rate of “Invidia”, which is unanimously agreed annually by 43%, is one of the highest rates for companies in the “S&B 500”, and twice the growth rate of “Microsoft” and “Apple”. The promising horizon at this rate, the operating profit per share in Invidia must rise to $ 80 in four years from $ 19 currently, leading to the price ratio to the long -term profits, let’s go to the ratio of 18. Almost the company “Microsoft” and “Apple”. In other words, after calculating the expected expected “Invidia” growth, it is nothing more expensive than the two giant businesses. There is only one problem: when analysts try to estimate profits, their expectations will not be confirmed, and the possibilities of uncertainty for some businesses are greater than others. “Microsoft” and “Apple” is one of the fixed companies that earn money from a sustainable customer base for those who include almost every person who has a screen. On the other hand, ‘Invidia’ serves a newer market, although more promising, centered on artificial intelligence, whose future is surrounded by less certainty, as is the case with the role of ‘invitation’ in this market. So one expects the dispute over the future growth of “invidia” to be greater than Microsoft and “Apple”. In fact, this is the situation. Bloomberg also calculates the standard deviation-or-contrast analysts for long-term profit growth. The large contrast indicates a lower agreement between analysts, and vice versa. It seems that the growth of “invidia” growth in the long run is three times the estimates of “Microsoft” and four times “Apple”. And since the long -term share rate is almost the same for the three businesses, it is for the “Microsoft” and “Apple” business based on more modest expectations, but it is also more stable, while “advidia” expectations depend on more optimistic expectations, but difficult to identify and confirm. Future profits It highlights the risk of relying on future profits to justify the current price of the share, especially if expectations are vague as it looks with ‘Invidia’. If it is proven that the growth expectations collected for the business are very optimistic, the share will be praised again, and it will have a wonderful space for correction. Several comparisons were recently held between ‘Invidia’ and ‘Cisco Systems’, for a good reason. Like the “Envenia” chips that are currently leading artificial intelligence, Cisco ‘routers developed that supported the bleeding internet in the 1990s, and the obsession with Internet stocks made Cisco the most valuable company in the world. The most advantageous thing with this comparison is the extent to which Cisco investors deceive. During the contract between 1991 and 2000, the company managed to increase its operating profit annually by 71% and achieved the profits worth $ 4.6 billion for the 2000 financial year, and a large evaluation of 233 times the subsequent profits, which is undoubtedly the expectation for continued growth. But when the internet bubble exploded in 2000, Cisco’s chances changed quickly. Operating profit fell to $ 21 million in the 2001 financial year, and by the time it recovered its level in 2000 two years later, the company’s share price equal to 39 times the subsequent profits-a limited part of its evaluation in 2000. The evaluation has since fallen. Do you like “Invidia”? This does not mean that “Invidia” awaits a similar fate, but it shows the risks of relying on a bright future in a new and rapidly developing industry. Bloomberg’s colleague, Parmy Olson, already sees ‘signs of resentment’ of artificial intelligence, including reducing companies for his new tools. Daniel EVZ, an analyst at “Wedbush Securities”, recently wrote: “The graphic processing unit chips of Invidia are essentially gold or new oil in the technological sector.” Perhaps it is no coincidence that it is difficult to predict the path of both commodities.