The Old-Fashioned Way
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By Matthew Gutierrez and Shawn O'Malley · August 28, 2024
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Surprise, surprise. On Wednesday, Nvidia reported another sensational quarter, registering 122% year-over-year revenue growth. It comes following three straight periods of year-over-year growth in excess of 200%.
Nvidia shares are up over 150% this year after surging almost 240% in 2023. Its market cap recently eclipsed $3 trillion, and it was briefly the most valuable public company worldwide (it’s now second to Apple).
CEO Jensen Huang said the anticipation for Nvidia’s new Blackwell AI chip “is incredible.”
As the AI boom approaches its second anniversary, Nvidia delivered yet another robust outlook.
— Matthew & Shawn
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POP QUIZ
What was the best-performing S&P 500 stock of the 2010s? (Scroll to the bottom to find out!)
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In The News
Warren Buffett’s Berkshire Hathaway Tops $1 Trillion
Warren Buffett, who turns 94 on Friday, got an early birthday present this year. His Berkshire Hathaway topped the $1 trillion market cap threshold for the first time, becoming the first U.S. company outside of the tech sector to surpass $1 trillion in market value.
Berkshire shares have risen nearly 30% this year and about 128% over the past five years vs. the S&P 500’s 91% gain. That 30% gain vs. the S&P 500’s 18% in 2024 is one of its best annual starts in a decade. It also puts Berkshire not far behind the Magnificent Seven’s 35% gain this year.?
Old-fashioned: The stock’s latest rally is mainly due to its strong insurance results, which have pushed the Omaha, Nebraska company into an elite league of trillion-dollar companies, mostly in Silicon Valley. They include Alphabet, Meta, Nvidia, and Apple.
Staying power: Buffett and his late partner Charlie Munger turned Berkshire from a struggling textile maker into a business empire that will be studied for generations. Berkshire’s market value has climbed 20% annually since 1965, an unprecedented run that’s roughly double the S&P 500’s annual return. This run has also made Buffett one of the richest people worldwide, despite his enormous philanthropic efforts, and the most famous investor of all time.?
All-weather: In 2024, Berkshire added a record $200 billion market cap alone. As a Bloomberg analyst put it, Berkshire might not be as exciting as Nvidia, but the firm has an “all-weather portfolio” that has attracted investors of all risk profiles.
Why it matters:
The milestone “is a testament to the firm’s financial strength and franchise value,” observed one Berkshire analyst. “This is significant at a time when Berkshire represents one of the few remaining conglomerates in existence today.”
Old economy: After slashing stakes in long-time holdings Apple and Bank of America, Buffett still sits on...