• yesman@lemmy.worldEnglish
    7·
    2 months ago

    So Nvidia is “worth” almost twice as much as the pharmaceutical industry?

    • thenoirwolfess@lemmynsfw.comEnglish
      2·
      2 months ago

      Here’s how I think it works - worth is valued by the potential amount of money the business has(n’t) instead of the actual. Like valuing your bank account by its pre-pending amount. E.g.:

      Nvidia has $1T worth of assets. They also have $3T in other people’s money, in their name, held (and actually owned) by stockbrokers. This puts Nvidia’s theoretical worth at $4T, despite the actual, worth being $1T.

      Now, say the US government promises to pay Nvidia $500B for goods under a contract (a kind of IOU combined with promises to respect each other, with threat of retraction if respect is not kept). The US doesn’t have that money. They’ve got an advance promise from banks so they only theoretically have the money. But this doesn’t matter. Once Nvidia agrees to the deal in which the government promises to one day pay money they don’t have, then their ‘worth’ becomes $4.5T. Inflated by the value of existing and promised investments.

      An actual business finance expert can feel free to tell me how far off I am.

    • Karjalan@lemmy.worldEnglish
      3·
      2 months ago

      I really don’t get it… It’s just overpriced evs right? How is it so high? Is it just a scam and rich people investing in other rich people to keep each other rich?

      • Brosplosion@lemmy.zipEnglish
        2·
        2 months ago

        It’s cause it’s now in almost every single fund / pension as a pseudo blue chip. No one wants to see it drop so it doesn’t. The company doesn’t actually have that value/assets.

        • surewhynotlem@lemmy.worldEnglish
          2·
          2 months ago

          It’s exactly this. The stock market is just vibes. Vibes that are (sometimes loosely) influenced by data and events.

  • mycodesucks@lemmy.worldEnglish
    4·
    2 months ago

    I’m no fan of Apple, but I UNDERSTAND where their valuation comes from and WATCHED them make that money.

    NVidia, however, is really driving home the fact that the stock market is based on absolutely nothing. It’s all smoke and mirrors.

  • Geobloke@aussie.zoneEnglish
    3·
    2 months ago

    Wow, tesla still worth 7x more than Toyota

    And so many companies that seem to cater directly to the American market in consumer staples