Fundstrat
Fundstrat's Tom Lee: Why Nvidia Trades Lower Than Walmart & Costco
9/10/2025, 7:00:40 PM
Economic Summary
- Oracle's after-hours 27% rally signals robust IT spending and strong visibility for AI-related investment, implying continued revenue tailwinds for enterprise software vendors (ORCL).
- Google reduced roughly 35% of manager roles, highlighting AI-driven efficiency gains and potential labor displacement among U.S. tech firms, with broader productivity implications (GOOGL).
- Speaker argues NVIDIA trades at 26.6x forward earnings and appears reasonably valued relative to consumer staples like Costco (COST, 48.5x) and Walmart (WMT, 39x), raising questions about how markets price 'scarcity' among AI leaders (NVDA, COST, WMT).
Bullish
- Oracle's 27% post-close jump suggests strong IT and AI spending visibility.
- Google cutting ~35% of managers indicates AI-driven productivity gains and workforce changes.
- NVIDIA seen as the scarcest AI company; 26.6x forward earnings argued as reasonable.
Bearish
No bearish cases captured.
Bullish tickers
ORCLGOOGLNVDA
ORCL
Bullish
Reported after the close and jumped 27%, viewed as confirmation of strong IT and AI spending visibility.
GOOGL
Bullish
Implemented ~35% cuts to managers reflecting AI-driven efficiency and productivity gains.
NVDA
Bullish
Characterized as the scarcest AI company and trading at 26.6x forward earnings, argued to be reasonably valued.
COST
Bullish
Used as a valuation comparator (noted at ~48.5x forward earnings) versus AI leaders.
WMT
Bullish
Used as a valuation comparator (noted at ~39x forward earnings) versus AI leaders.