The present market hype around all things AI has driven equity valuations beyond what is reasonable.
- Is it rational that NVDA shares are up 30% over the past 5 days? NO.
- Is OpenAI worth the implied $29 Billion as a result of its recent $300 million venture round? NO.
- Is C3 ai’s (ticker: AI) 5 day, 40% run warranted? NO.
- Is Palantir’s (ticker: PLTR) recent 5 day, 24% run warranted? NO.
Most of the equity value appreciation in the companies mentioned above is hot air in my view.
- Nvidia (ticker: NVDA) chips are differentiated and provide real value, but do not justify the incremental $300 billion equity value gain over the past 5 days nor the $400 billion equity value gain over the past 30 days.
- Apparently OpenAI will generate 2023 Revenue of approximately $200 million. A $29 Billion equity valuation is outrageous. Walk me through the multi-billion near-term customer value proposition if you disagree.
- C3 ai? Please. It’s riding AI’s hype train. What actual AI-related IP is the company producing?
- PLTR provides real value – but it’s a Predictive Analytics-driven Services company. PLTR is not democratizing AI across billions of users the way Google is.