Tesla, Called the 'Second Apple'
Stock Price Halved After Peaking in 2021
There is an analysis suggesting that the soaring stock price of AI giant Nvidia could follow in Tesla's footsteps.
On the 3rd (local time), Bloomberg reported, "As the market trend shifts from electric vehicles (EV) to AI, Nvidia is becoming Tesla's successor," warning that "Nvidia could face a significant downturn after a rapid stock price surge, similar to Tesla." Based on the closing price on the 1st, Nvidia's stock price was $822.79, more than 66% higher compared to the beginning of the year.
The report recalled 2017, when Tesla was hailed among investors as the 'second Apple' and emerged as a dream of technological innovation. Since then, Tesla continued a record rally, with its market capitalization surpassing $1.2 trillion (approximately 1,600 trillion KRW) in 2021. However, its current stock price has dropped more than 50% from its 2021 peak and has become one of the biggest decliners in the Nasdaq 100 index this year.
Samir Bassin, CEO of investment firm ValuePoint Capital, diagnosed, "Despite Tesla's many potentials such as autonomous vehicles and the Cybertruck, its stock price is being hit because it is losing market share and margins."
The report evaluated that Nvidia's current price-to-sales ratio (PSR) is around 18 times, the highest among S&P 500 listed stocks, similar to Tesla at its peak. It also pointed out that although Nvidia leads the AI graphics chip sector, competitors like AMD and Microsoft (MS) are actively developing their own chips to expand market share.
The report also warned about the long-term investment risks in IT stocks. Cisco Systems, which was beloved by the market during the dot-com era, remains a successful company, but investors who bought its stock at the 2000 peak have yet to recover their losses even after 24 years. The report added, "While the disruptive power of EVs and AI cannot be ignored, investors should reflect on whether they are paying for a distant future that is realistically hard to reach."
Adam Saran, CEO of Fifty Park Investments, expressed concern, saying, "We have seen many instances where investors are captivated by the innovative power of the latest technologies, causing their established investment principles and logic to be sidelined." Cole Wilcox, CEO of asset management firm Longboard, noted, "Market bubbles exist because the underlying ideas are realistic, but following macro market trends does not guarantee that all investments will prove to be good investments."
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