From Nasdaq:

Nvidia stock soars amid AI chip demand, up 249% in last year, raising overvaluation concerns. Tesla’s stock falls 30% in 2024 due to lower demand for EVs and decreased gross margins. Differences in business focus and financials shape company performances, with Nvidia showing strong growth and Tesla facing margin pressures.

Nvidia’s revenue surged by 126% in fiscal 2024 to $61 billion, with a net income increase of 581% to $31 billion. On the other hand, Tesla’s revenue grew at 19% to $97 billion, with gross margins declining from 26% to 18%. Valuation metrics show differing perspectives, with Nvidia’s P/S ratio at 37 compared to Tesla’s 6.

Investors question Nvidia and Tesla’s valuation metrics, with Nvidia’s forward P/E ratio at 37 reflecting rapid earnings growth. Tesla faces challenges, as lower margins impact profitability and P/S ratio stands at the lowest level in years. Nvidia may have an advantage due to strong demand for AI chips and favorable valuation compared to Tesla.

Nvidia’s stock likely won’t see the same decline as Tesla in the near future, given strong AI chip demand. However, competition and potential chip industry downturn could impact Nvidia down the line. Tesla faces uncertainties with slimmer margins on auto sales and full self-driving platform adoption. Investors should consider these factors before investing in Nvidia.



Read more at Nasdaq: Will Nvidia Stock Crash Like Tesla? 3 Points To Consider