Fundament and vision over hard data ?

Taking a quick look at the two technological giants, we could say that NVIDIA´s massively beating Tesla in a straight line. Not only Tesla, but the whole market´s badly beaten by this huge company.

NVIDIA earned around 186% YTD. On the other hand Tesla is down around 29% YTD.

DATA
Current biggest company of the world, which NVIDIA has became few days ago, has been reporting amazing data throughout the year. Huge sales, incredible earnings and breathtaking margins !
On the other hand, Tesla´s reported the worst numbers since the meeting held in June 2023. There are many factors that have affected the numbers of these companies. Especially the uncertainty about China, the EV price war in Chinese market and the impact of tariffs imposed by US and EU on EVs. Moreover AI boom and demand for chips helped NVIDIA to rise.

RECAP
Tesla reported:
Revenue: $21.3 billion
Net Income: $1.13 billion
EPS: $0.34

Tesla's revenue and net income declined significantly compared to Q1 2023

NVIDIA reported:
Revenue: $26.0 billion
Net Income: $14.88 billion
EPS: $0.61

However there are many questions to be answered. Are Nvidia´s margins sustainable in long-term ? What if demand for chips decreases ? What if long-awaited AI bubble bursts one day ?

I highlighted with vertical lines on the graph reaction of these two stocks after last earnings reported:
1. Tesla stopped his downward plunge and stabilized between 170 and 190.
2. NVIDIA has rocketed upward

Is it all about key numbers ?

In my opinion investors still react wisely on incoming data and many of them rely on it. However other factors can move the price such as fundament, management and CEOs and their visions.
It´s the vision of Elon Musk that keeps Tesla at its current valuations. He tries to persuade stakeholders and potential investors that company is more than EV maker. He talks about software company aiming wider like building artificial intelligence, robo taxi and AI for all of us and around us.
It´s nothing new, Tesla´s basically built entirely on Elon´s vision. So far it´s paying off. Until when ? Don´t take me wrong. I´m a fan of Elon´s visions and hopefully they manage to make it true. It seems to be long run, BUT THAT´S INVESTING !

NVIDIA seems to have less persuasive vision and investors rely more on key financial numbers and definitely some of them just have jumped on trend leading by AI boom.

Who will be a winner in long-term ? We could only guess. However proofs speak clear, NVIDIA is one and only winner in battlefield.

What´s your strategy in long-term investing ? Are you "fundamental guy" , "vision guy" or "data guy " ? Or do you look at it as a whole thing ?

Let us know, feel free to share your opinion in comments

Let´s talk about it

n1performer

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