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Good day subscribers thank you so much for joining me today i am jeremy this is the financial education channel and today we are talking about is amazon stock in is nvidia stocked overvalued are these stocks overvalued guys are these two stocks a lot of you out here actually directly owned you actually own shares in them or you might indirectly own through a mutual
Fund through a 401 k or something like that guys especially in amazon’s case because amazon has become such a goliath company now that almost every mutual fund out there pretty much has some shares and amazon so these two companies directly or indirectly affect the majority of people watching this video today guys and they’re very interesting stocks they’re huge
Growth companies their stocks that are talked about a lot on tv and whatnot they’re making moves i mean the amazon deal with you know amazon trying to buy a whole foods like that was you know got national press attention not often you know one of those type of deals in acquisition and a stock market is not usually an acquisition gets that type of public attention
Like like everybody knows about it guys so this is huge stuff we’re going to go ahead and look at these and see if they’re way overvalued or if they’re not really that overvalued guys so let’s go ahead and get into this hope you enjoy hit the thumbs up button if you do and let’s see this so amazon this stock in the last three years is up a hundred and seventy five
Percent and you can see that part of 2014 there i actually have that actually weighted down the numbers a bit because for the second half of 2014 and went down over 8% but if you look you know 2015 the stock went up 119 percent then 2016 has okay year went up over 10 percent and you look at the first six months of this year it’s gone up over 27% guys so three year
Change i’m a hundred and seventy five percent that’s amazing nvidia this one’s even better this one makes amazon look like a joke so in in vidiian last three years of six hundred and twenty nine percent guys six hundred and twenty nine percent look at 2015 of 63 percent 2016 last year was a huge year for of two hundred and twenty three percent and then through the
First six months of this year is already up over 30 percent guys so we’re talking about two stocks that have gone up massively in zone of massively 175 percent in three years is amazing like that’s ridiculous but nvidia up over six hundred percent guy sets are mind blowing to me mind-blowing so few different things we’re going to look at we’re going to look at
You know what which way is our their revenue trending profits trending where look at the most recent numbers we’re going to look at some p/e ratios and those kinds of things to kind of judge if this if these companies are overvalued or not and if they are why aren’t they over value why are they getting this type of valuation so look at amazon first and judge amazon
First here so we see amazon 2014 aidid about 88 milk are almost 89 billion dollars in revenue 2015 aidid about 107 billion dollars and then all the way up to a hundred and almost 36 billion is past year that’s what a nominal growth guys phenomenal growth and then we go ahead and we look at the net income here the net income rate 2014 they did a negative they had
Negative net income so he lost two hundred and forty-one million dollars 2015 that is five hundred ninety-six million dollars profit so that’s nice when you could swing for a pretty big loss to a pretty nice game and then all the way up to two point three two point three billion dollars in net income this past year so we’re talking about amazon in over the past few
Years went from a company that was losing money to also being pretty nicely profitable to now profits or exploding i mean that’s almost a five-fold the profits went up there guys that’s a huge increase so profits are dramatically increasing in amazon at this point in time and revenues are increasing you know rapidly as well i mean to get an extra thirty something
Billion dollars in revenue are not quite 30 you know an extra twenty nine billion dollars in revenue one year versus the next like you know much in sales you have to increase to hit that guy’s twenty nine billion dollars more that is absolutely mind-blowing numbers this is the most recent here so most recently their total net sales you know for the three months in
Ending march 31st so latest quarter back in 2016 they did 29 billion this past quarter this is almost thirty six billion dollars guys thirty five point seven billion dollars in revenue so we’re talking about drew a growth engine this company is then we look at net income we had about 513 million dollars in that income last year in the same quarter this year in the
Same quarter they did about 724 that’s really good growth basic earnings per share of $1 o 9 last year in this quarter they did a dollar 52 in this most current quarter so we see that you know not only has it grown the last three years but right now it’s still in phenomenal growth mode guys the the profits are up you know what was that 50 almost 50 percent you know
40-plus percent and then you know revenues are increasing at a 20 25 percent pace so they’re growing phenomenally we see this as a high growth company now let’s look at the p/e here so they got a trailing p/e of a hundred and seventy nine they have a forward p/e of four piece that’s next year’s earnings expected around an 83 on a forward p so i look at amazon and
I say absolutely this stock is overvalued on any type of short-term basis even on medium term basis this company is absolutely overvalued and it is without question there’s no way you can make a valid argument that amazon is not overvalued currently because look at this okay let’s say they hit that number they do an 83 you know they get down to an 83 p next year
That’s 2018 they get that down to then 2019 where they get it down to maybe a 60 then 2020 maybe they get it down to like a 45 then 2021 maybe they get it down to like a 35 then 2022 maybe they get it down to a 25 and then maybe you know then at that point it’s like a realistic number like a 25 p/e i can pay for most companies if it’s on a forward basis but we’re
Talking about you need to probably get to 2021 2022 to even get to that that normal valuation right that’s a long long long ways away guys that’s a long long long ways away and who knows if that competitive landscape can shift in that amount timely we’re talking about you know we’re talking to four or five years into the future or maybe we’re finally fairly valued
And who knows what’s going to happen on you know in that next four or five years so when i look at amazon there’s no way i could invest amazon although i believe in amazon more than pretty i mean i’ve been talking about amazon and tesla taken over the world as far as the auto industry and retail for like long before i even had this youtube channel right but i’m not
Going to invest my money in a company that’s overvalued just because i believe in it so much it’s absolutely overvalued guys without even you know without question amazon’s overvalued let’s look at this nvidia here in video so this company you know three years ago they did 4.6 billion dollars in revenue a couple years ago they did five billion dollars in revenue in
Its most recent year they did six point nine billion dollars in revenue so phenomenal growth they’re on the top line those are the bottom line though bottom line even more impressive so they did 631 a few years ago then they went to 614 so which actually went down so i was a little worrisome but then they went from 614 million dollars in that profit or net income
To 1.6 billion dollars this past year a dramatic increase and now we can kind of understand why this stock has gone up so ridiculously massively over the last few years guys when you’ve got that type of growth holy smoke us now let’s look at this guy’s this is the most recent quarter revenue of one point nine four billion dollars up forty eight percent year from a
Year ago absolutely phenomenal gap etf of seventy nine cents of a hundred and twenty six percent of you flipping my flapjacks what about one hundred and twenty six percent guys one hundred and twenty six percent holy smokes that is ridiculous growth year over year and that’s on my gaap basis – that’s not even on a non-gaap basis that’s on a gaap basis one hundred
And twenty six percent profits are up my goodness gracious okay so let’s look at the p easier so truly pms company is about a forty six though for p however is around a thirty nine around a thirty nine so i look at that and i say well you know the profits are going to start are obviously expecting to slow substantially coming here in the second half of the year so
That’s a little worrisome so when i look at this company and i look at profits starting to slow in that 126 percent that’s going to start slowing or at least expect to slow massively for the second half of the yeren going forward right i look at this company on i say okay this company is slightly overvalued slightly over value but it’s not even close to what you
Know what an amazon is overvalued and we won’t even talk about tests or netflix those ones might be the worst of them all right but i look at nvidia and i see or this company is slightly overvalued because because profits are expected to slow substantially and then you’re still training at a forward p/e of a 39 so when your profits are slow or at least expected to
Slow that much in your trading at a four p of a 39 i can’t get involved with a company like that now why are these two stocks you know overvalued in amazon’s case way overvalued like why why do stocks like didn’t get overvalued like why does everybody just want to stick money in them there’s two reasons why these stocks are overvalued in my many stocks or value in
The market currently we’ve been in a bull market and especially in the nasdaq which both those our companies participate in the nasdaq right – max up 25 percent in the past year 25 percent the nasdaq sup in the past year guys that is like mind-blowing numbers i mean the markets on average go up about 8% a year this did this almost did it threefold right at almost
A 26 percent rise in the past year that is mind-blowing take bull market issues and take stuff there guys so that’s reason number one reason number two in just as important if not more important is the future they’re the future when there’s companies that are seen as being possibly the number one you know company in a big industry or dominating a big industry
That’s when you have everybody wanting to throw money at it left and right in amazon’s case they’re probably going to dominate retail if they’re you can make an argument that they’re already dominating retail right retails huge like this is a huge market so amazon they’re going to be the number one there is the number one play that’s huge and then also amazon could
Potentially be the number one play in web services which is businesses you know using their type of platforms to you know expand the businesses and keep track of all the numbers and whatnot that’s a huge opportunity so in the zones potentially in the forefront of to huge industries guys to huge industries the main one being the retail side that’s a big opportunity
For amazon right huge so they’re seen as the future there and then you look at invidious case nvidia seen as possibly the the future company the dominant player in artificial intelligence and why is this such a big thing well because artificial intelligence is going to eat software it’s going to make software irrelevant artificial intelligence take chips are
Going to are going to change the world i mean there’s going to be no more the the way semiconductors worked in a way semiconductors chips and software works currently is totally different that artificial intelligence work and i won’t even try to get you know trying to get into that in this this this video here because i’m probably a bad explainer of technology
Type stuff like i need to stick to stocks right so if you want to see the difference between artificial intelligence in software then go out and research that in your own but there are two way different things in in in nvidia skis they’re seen at the forefront of all of artificial intelligence they’re seen as possibly the player that’s going to dominate artificial
Intelligence more than any company out there and we’re talking about a world 20-30 years from now when almost everything is going to be you know have some type of artificial intelligence running it guys that’s crazy to think about and in videos part it potentially in a great position to be the number one player there so that’s why these stocks are overvalued bull
Market and they’re seen as the future in a they huge potential industries here or industries are already huge so that’s why there’s these type of stocks kill overvalued guys so i hope you enjoyed looking at these today let me know if you’re an invest in either one of these i would love to hear from you guys in the comment section if you have any plans to buy them
Or anything like that guys i would love to hear from you in the comments section if you just came across this channel you may want to subscribe we talk personal finance in the channel we talk entrepreneurship i’m an actual business owner i give away so many business tips we talk stock market investing more than anything check out my book its link to the description
My stock market strategy thank you for watching guys and have a great day you
Transcribed from video
ARE AMAZON AND NVIDIA STOCK WAY OVERVALUED? By Financial Education
