Tesla investors? Nvidia's fall should be a red flag for you
The article analyzes the sharp declines in Nvidia's stock following CEO Jensen Huang's retirement, and warns that Tesla's dependence on Elon Musk could lead to a more severe crash, given its high price-to-earnings ratio (over 400) compared to Nvidia (about 20).
The article analyzes the implications of the sharp declines in Nvidia's stock for Tesla investors, highlighting the dependence of both companies on their CEOs. After Jensen Huang announced his retirement from Nvidia, the stock lost nearly 15% of its value, wiping out more than $600 billion in market cap. The author, Kobi Shlosberg, argues that while Nvidia trades at a P/E ratio of about 20, Tesla trades at a P/E ratio of over 400, the highest in the Nasdaq 100. This means investors are paying more for expectations from Elon Musk than for the company's actual performance. The article raises a theoretical question about what would happen to Tesla if Musk were to leave, and warns that the fall could be much sharper than Nvidia's. The article concludes by clarifying that it does not constitute investment advice.