Matt Malone discusses the performance of publicly traded Nvidia and OpenAI, a private markets investment
Last year we made a short clip on Nvidia when it started to spike based on increased demand for its chips due to the need for more GPUs to power the training phase of AI.
The take in that was that valuation metrics were stretched and that there might be better opportunities for more upside in private markets. What have we seen since then, a year later? Well, Nvidia, despite the stretched valuation metrics, has approximately doubled in value depending on where you take a picture in terms of its stock price.
So, there was a lot of upside still in Nvidia. And there may still be upside in the future. That being said, valuation metrics are still very high for a public markets company. The company is valued at approximately $2 trillion market cap. Now, if we compare that to what happened in private markets over the same period of time, let's take OpenAI, a darling of the private markets industry, as an example. Around that same time last year, OpenAI was reportedly valued at approximately $25 billion.
Since then, the value of OpenAI, based again on what we've seen in terms of publicly reported valuations, is now being valued at $80 billion plus and maybe higher. So, while Nvidia has had a fantastic run, and I don't think anyone would be disappointed with doubling their money in the last year, OpenAI has at least tripled in value over the same period of time and possibly will go higher.