Is It Too Late To Invest In Nvidia? | Pivot

Kara Swisher 0:00 Another story that's really interesting, Scott, I, I noticed NVIDIA stock, they were talking about it here in Aspen, uh, it's been on a roller coaster this week. Shares are headed back up after multiple days of decline, which costs the company its title as the world's most valuable company. N- NVIDIA shares are still up over 160%, uh, since January. Uh, what do you think about this? Um, I, I think a lot of, uh, I think a lot of people thought this was coming. You, you talked about this a lot. Go ahead.

Scott Galloway 0:27 Yeah. But since it's rebounded 7%, it's not, uh, its ups and downs aren't that interesting. What's more interesting-

Kara Swisher 0:32 Mm-hmm.

Scott Galloway 0:32 ... is that when it loses 13% over the course of three days, um, it basically loses the value of Mastercard.

Kara Swisher 0:40 Mm-hmm.

Scott Galloway 0:41 I mean, if you look at the blast zone or ground zero of essentially two trillion dollars in incremental value creation over the last-

Kara Swisher 0:48 Mm-hmm.

Scott Galloway 0:48 ... six or 12 months, the knock-on effects are so dramatic. If this company, this company could go down to 80%, and all of a sudden, the NASDAQ and the S&P wouldn't be keeping pace with inflation. One company is now sort of as goes... I mean, it, uh, it used to be the Magnificent Seven, now it's the magnificent one. It's-

Kara Swisher 1:07 Mm-hmm.

Scott Galloway 1:08 It's the singular samurai, NVIDIA.

Kara Swisher 1:09 Right. Right.

Scott Galloway 1:10 So NVIDIA has now become the tail that's wagging the dog of almost everything, and I'm fascinated-

Kara Swisher 1:14 Mm-hmm.

Scott Galloway 1:14 ... by this thing because people just-

Kara Swisher 1:16 Mm-hmm.

Scott Galloway 1:17 ... can't imagine the kind of value creation here and what it means when it becomes so huge that, uh, in this volatile, it is th- I mean, the NASDAQ is effectively, the tone for the American economy right now-

Kara Swisher 1:30 Mm-hmm.

Scott Galloway 1:30 ... is gonna be directly and indirectly dictated by the volatility of NVIDIA. Even, uh, uh, for example, 30,000 employees, three trillion plus market cap, so you're talking about $100 million per person.

Kara Swisher 1:43 Mm-hmm.

Scott Galloway 1:43 Oh, jeez. Uh, I worked my ass off, got so lucky with L2, sold it for $160 million after executing almost what I felt like was perfectly having just an inc- incredibly lucky, just finally I did something-

Kara Swisher 1:56 Mm-hmm.

Scott Galloway 1:56 ... and I got, uh, all the moons lined up. $160 million, 80 people, so that's $2 million per employee. They've generated somewhere between 100 and $130 million per employee, and I would bet of those 30,000, 10,000 woke up, uh, last week and said, "I'm worth between $10 and $50 million."

Kara Swisher 2:17 Right. Right.

Scott Galloway 2:17 Which, what does that do to San Francisco real estate prices when all of a sudden-

Kara Swisher 2:21 Mm-hmm.

Scott Galloway 2:21 What do you do when you're 29 or 34?

Kara Swisher 2:23 It already is affected, you know that. We, we talked about that-

Scott Galloway 2:25 Is that right? (laughs)

Kara Swisher 2:25 ... luxury housing is way up. Mm-hmm. Uh, uh-

Scott Galloway 2:27 I mean (laughs) .

Kara Swisher 2:28 Uh, a, a lot of the tech companies and especially all the, and OpenAI, uh, everybody coming back, et cetera, et cetera.

Scott Galloway 2:34 But when you have 10,000 people probably in their 20s, 30s, and 40s that all of a sudden have $10 million in incremental wealth, you gotta think two-thirds of them are thinking, "We're either gonna buy a nice home or a better home." Uh, I mean, "We're either gonna buy our first home or upgrade." What does that do to housing stock? I mean, there's just... And then what happens if this thing goes down 80%? It, it could, uh, NVIDIA could decide the pre- the presidential election if the market is off 2% instead of up 14, that is a huge talking point for, for-

Kara Swisher 3:03 Yeah.

Scott Galloway 3:03 ... the Republicans. This, NVIDIA has become a- As NVIDIA goes, so goes the market and the perception-

Kara Swisher 3:09 Interesting.

Scott Galloway 3:10 ... of the American economy.

Kara Swisher 3:11 So where, is it a buy now, Scott, for people who are like-

Scott Galloway 3:14 (laughs) This is-

Kara Swisher 3:15 ... you, you, you still can't do it?

Scott Galloway 3:16 This is literally-

Kara Swisher 3:17 It's a game. It's, it's a meme stock in a weird way, in a weird way.

Scott Galloway 3:20 This is, uh, th- I, I tell you what, I track everything. I get about-

Kara Swisher 3:24 Mm-hmm.

Scott Galloway 3:24 ... 76 emails a day from strangers.

Kara Swisher 3:27 Mm-hmm.

Scott Galloway 3:27 And the number one question I get is regarding young men, either-

Kara Swisher 3:31 Mm-hmm.

Scott Galloway 3:31 ... mom's looking for advice or young men themselves. The number two is-

Kara Swisher 3:35 Mm-hmm.

Scott Galloway 3:35 ... "Is it too late to buy NVIDIA?" (laughs) People, a- and what I tell them is, "Look, I don't know." I can paint you a scenario where it doubles. I can see it getting cut by 50% if not 80%. So this is what you do, in my view. You buy SPY, you buy an index fund because if you buy an index fund, every dollar that goes into-

Kara Swisher 3:54 You're buying NVIDIA.

Scott Galloway 3:55 You're buying (laughs) 24-

Kara Swisher 3:56 NVIDIA.

Scott Galloway 3:56 ... cents on the dollar goes to the Magnificent Seven. So if those companies continue to kill it, you participate, but if the other 493 stocks have their day in the sun and those stocks get cut in half, you're still okay. So you take some upside off the table, but you save your mental health, you know you're participating.

Kara Swisher 4:14 Yeah.

Scott Galloway 4:14 And the thing about these indexes that's so amazing is they are a screening mechanism for the best companies. So, so, y- you know, uh, whatchamacallit, uh, you know, who gets kicked out? Uh, uh, uh, Kodak gets kicked out, Salesforce gets brought in, right?

Kara Swisher 4:30 Mm-hmm.

Scott Galloway 4:30 So it's the best companies in the world you're investing in, and they do the job of balancing and diversifying for you. So anyways, you wanna invest in NVIDIA thoughtfully, you don't need to know whether it's gonna go up or down, buy an index fund.

Kara Swisher 4:42 Just buy an index fund. Good idea.