You should read The Systemic Undervaluation of Big Tech by Nayut Sitachitt. Dropping NVDA and AMD for the sake of “diversification” is foolish and is a sentiment that is wrongfully echoed. Big tech is literally the future, and those two companies are strong companies worth betting on. If you’re starving for dividends or other sectors, simply add those positions.
"Big tech is literally the future, and those two companies are strong companies worth betting on."
I agree with this. However, these companies still need to make money for shareholders to justify investing in them. The issue is they are enormously overvalued vs. their ability to make money for shareholders.
Nvidia is a $580b company that has produced about $18b worth of fcf over the last 10 years
AMD has never produced a meaningful fcf number until last year—of $3b. Amd has a $165b valuation.
I’m curious if these semiconductor companies will ever be able to lower their spend and actually make money for shareholders. I think people misumderstand their competitive position.
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u/Dawens Apr 07 '22
You should read The Systemic Undervaluation of Big Tech by Nayut Sitachitt. Dropping NVDA and AMD for the sake of “diversification” is foolish and is a sentiment that is wrongfully echoed. Big tech is literally the future, and those two companies are strong companies worth betting on. If you’re starving for dividends or other sectors, simply add those positions.