I do consider the dynamics of the businesses involved - when I Write about a single company I consider it very deeply, when I write about a basket of stocks, I adjust my message to provide for that. I have written tons about differentiating between business models, and have spoken about that on my recent podcast interview with Value Hive.
To get to the punch, Open AI being valued at $100bln may not be ridiculous to you, but it is to me. What is your risk/reward? Abysmal. Even if you hit your targets, no biggie.
What insider information/expertise do you have to say OpenAI valued at $100b is ridiculous?
Do you have their financial information? Growth rate? Roadmap? Customer pipeline? Have you tested GPT5? Are you a leading AI expert? Have you worked at OpenAI before?
I'm not saying that you're wrong. It's just silly to say its valuation is ridiculous when it's a private company.
We know Open AI ARR, competitive landscape, the reason why they raised the capital at that valuation (MSFT's goals). We also know that they DO NOT make money, which isn't great considering that there's a bunch of other competitors ramping up to compete with Open AI.
We also know that this is an incredibly dynamic sector/business, which means there's a high chance Open AI may not even get close to achieving its objectives.
Roadmap is one thing, how you value it is another. No, far from a leading AI expert, but I don't need to be a leading AI expert to think.
Do I need to work at Open AI to make an assessment of the company's current valuation? Come on now...if you've been an investor for long enough you know that employees very rarely have a good understanding of the company they work at.
Whether private or public, I have used limited information to make an assessment of the $100bln valuation, and yes for me, it's ridiculous.
I do appreciate your feedback however and constructive criticism.
I do consider the dynamics of the businesses involved - when I Write about a single company I consider it very deeply, when I write about a basket of stocks, I adjust my message to provide for that. I have written tons about differentiating between business models, and have spoken about that on my recent podcast interview with Value Hive.
To get to the punch, Open AI being valued at $100bln may not be ridiculous to you, but it is to me. What is your risk/reward? Abysmal. Even if you hit your targets, no biggie.
I have written about Duolingo, which was (and is) considered extremely overvalued, and similarly has a complicated business model. I broke down my rationalisation in this essay here: https://www.philoinvestor.com/p/duolingo-platformizing-learn...