NVIDIA’s Stunning Rise: The Magnificent 1 in Focus
In their latest Q1 2024 letter to investors, Distillate Capital takes a deep dive into the market’s apparent valuation levels and explores the remarkable rise of NVIDIA. The letter highlights how NVIDIA’s surge in market capitalization to nearly $2.5 trillion from around $350 billion at the start of last year is staggering in absolute terms. This rise has been significant enough to meaningfully impact the overall market’s valuation levels.
Distillate Capital compares NVIDIA’s ascent to Cisco’s similar trajectory during the peak of the TMT bubble around 25 years ago. The letter examines the growth prospects, profitability, and risks associated with NVIDIA’s lofty valuation multiples. While acknowledging NVIDIA’s impressive positioning amid the current AI boom, the letter emphasizes the importance of capital preservation and insulation from downside risks in Distillate’s investment approach.
The letter provides valuable insights into the market dynamics surrounding NVIDIA and offers a thought-provoking perspective on navigating the opportunities and risks in the current investment landscape. To read Distillate’s full analysis and see how their investment strategies are positioned, check out the complete Q1 2024 letter to investors.
Click here to read the full investor letter.
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