It’s Nvidia’s world, we just live in it

It became not a matter of if, but when. But the how is stunning.

Nvidia became the most valuable company in the United States, eclipsing LinkedIn parent Microsoft in what has been a three-way jostle including Apple. In case you’ve been living under a rock, Nvidia makes what are universally regarded as the best AI chips in the world.

Semiconductors are about speed. Moore’s law postulates that the number of transistors on an integrated circuit will double every two years with minimal rise in cost. In other words, speed will double on a regular schedule. But that’s so 1965.

Nvidia has re-written the rules about speed, in more ways than one.

NVDA has soared 8,280% since the start of 2023 (as of June 19). That’s 18 months. But even more staggering: It hit $1 trillion market cap about a year ago, and $2 trillion four months ago. It’s now worth $3.335 trillion (as of June 19), making it not only #1 but most valuable company in the history of the United States.

If you can stomach a $3 trillion company with a 79 P/E you can buy a share for $127, after a recent 10-1 split. Try not to cry, but you would have paid a split-adjusted $0.04 in Feb. 1999.

That was, coincidentally, just before the dot-com bust. Those of us of a certain age lived through that carnage. If you had owned the internet blue chips — Netscape, AOL, CMGI — you would have been wiped out. But Altimeter’s Brad Gerstner has a marvelous take on this: You would have been right to bet on the internet.

Nvidia was already a kick-ass gaming console graphics card leader when ChaptGPT burst on the scene. But on that fateful day — Nov. 22, 2022 — shares were $16. So this is a risky time for risk evaluation. Even though we are in the early innings of AI, here’s a sobering factoid: The first-year annual report from NSCP is worth more than Netscape.

Asa Fitch takes a mildly cautionary take in a The Wall Street Journal headlined Nvidia’s Ascent to Most Valuable Company Has Echoes of Dot-Com Boom:

The last time a big provider of computing infrastructure was the most valuable U.S. company was in March 2000, when networking-equipment company Cisco took that spot at the height of the dot-com boom.

But Danny Vena, CPA, CGMA writes for The Motley Fool that NVDA could hit $5 trillion. He makes his own bull case but notes that the street-high price target is $200 — which would just about get you there.

(By Friday's close, NVDA had retreated near correction territory, and Microsoft topped the list. But, fundamentally, nothing has changed)

WARNING! WARNING!

Surgeon General Vivek Murthy re-upped his campaign against social media, which he called an “important contributor” to “the mental health crisis among young people.” Murthy raised this alarm more than a year ago and has suggested many interventions. But he didn’t seem to get much traction before now, and I think it’s because of a new headline proposal: Create a health warning system for social media platforms.

I think we can broadly agree on a few of things:

• As I opined in last week’s column, social media has been with us for about 20 years, and I don’t think the world is a happier place.
• As Betty White joked when she hosted Saturday Night Live because of a Facebook campaign, it can be a huge waste of time.
• There are ample examples and irrefutable evidence that vulnerable people can be pushed to serious self harm and suicide because of cyber-bullying — some of which surely happens in the open and privately on social networks — and since knowledge of embarrasing and humiliation things are no longer limited to whomever happened to be there, and you can’t avoid bullies by hiding in you room anymore, it’s borderline unavoidable.

Murthy argues in a New York Times Op-Ed, which kicked off a series of media hits, that in an emergency “you don’t have the luxury to wait for perfect information. You assess the available facts, you use your best judgment, and you act quickly.”

The problem is that while the labeling proposal seemed to get him more more of an audience this time it doesn’t seem to address an emergency situation. It may actually set back his cause, as something … unserious.

I appreciate that starting a conversation can be the goal. Get people talking about the dangers of something and maybe they think twice or at least can’t avoid hearing about it all.the.time. Which saved more lives: Cigarette warning labels — or the incessant talk about cigarettes killing you sparked by labeling?

So it may not be necessary — or even the goal — for this dog to catch the car. Congress would have to make this happen, which is a longshot since it has yet to pass any significant legislation regulating tech. And then parents would just maybe have another small bit of ammo to try to persuade their children to get an IRL.

And: The cigarette health warning did not exist in a vacuum. When it was introduced, it was already illegal to sell cigarettes to minors — but not illegal for minors to buy or smoke them. For the analogy to work, it would have be illegal for minors to be on social platforms, and the platforms to be liable.

And nobody’s talking about that.

In a decidedly more dramatic assault on tech, the Los Angeles Unified School District has decided to ban smartphones entirely from classrooms. This bold experiment in the nation’s second largest school district actually could alter behavior, and boy did it spark a conversation — it was by far our most commented on story of the week.

One common thread was the benefit to students in emergencies. The massacre of school children at Uvalde was cited. Others replied, in effect, a lot of good it did them.

Gerard Gershonowitz, LUTCF, ITP had some intel from the front lines:

I've been an HS teacher for years. The school I've taught in collects every piece of technology upon entry, and students have it returned at the end of the day. No arguments; that's the expectation of learning. I don't understand why administrative personnel allow students to run the school. The admin needs to pull up their big boy/girl pants and show them who is in charge. BTW, our school has quiet halls and respectful students, while being an alternative HS.

So the issue is that 0.1% maybe important use case versus the 99.9% actual use of smartphones at school, which is totally boring. How can one expect kids not to become addicted to the most perfect distraction device ever devised?

Talk about cigarettes.