Prominent Tech Investor: We Bought Nvidia at 4x Earnings in 2023
Alex Sacerdote, founder of Whale Rock Capital, said on a podcast that his fund bought Nvidia at just 4x earnings in 2023 and Tesla at 5x earnings in 2019. The remark highlights a strategy of investing in high-growth companies at low earnings multiples.
Key Numbers
In a recent episode of the 'Invest Like the Best' podcast, Alex Sacerdote, founder of Whale Rock Capital, made a striking comment about his investment strategy. Sacerdote said: 'When we were buying Nvidia in 2023, we were paying 4 times earnings. When we bought Tesla in 2019 for the car S-curve, we were paying 5 times earnings.'
Details
The comment underscores the fund's ability to identify investment opportunities in companies with enormous growth potential at seemingly low prices relative to future earnings multiples. Nvidia, now a trillion-dollar company thanks to the AI boom, traded at 4x earnings in 2023, while Tesla, which revolutionized the electric vehicle industry, was at 5x in 2019.
Context
The remark comes at a time when tech stocks are trading at elevated valuations, with Nvidia currently at over 50x earnings. The comparison with Tesla is also interesting, as Tesla's stock has experienced significant volatility since 2019.
What This Means for Investors
The statement is not a buy recommendation but offers insight into an investment philosophy focused on buying early in growth cycles at low multiples. Investors are encouraged to conduct their own research and assess risks before making any decisions.
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