Nvidia is the obvious example. It used to be a gaming company with a brief moment of fame during the crypto-mining boom. Cyclical at best. In 2022, revenue jumped 61% year on year; in 2023, it decelerated to just 0.2% growth. Then AI demand sent its revenue and profits, and the share price, to the sky. Revenue doubled in FY24 and again in FY25. Even in FY26 it grew 65% year on year, which is phenomenal at that size.
That is what a business inflection point looks like. And this kind of sudden, fundamental change is exactly what most investors struggle to wrap their heads around. We’re talking about a real, significant leap in the business itself, not just the share price. Most investors are trained to analyze steadily growing companies and extrapolate historical trends. That’s why they keep calling Nvidia overvalued. They’re applying old figures to a new business.
The market is fairly efficient, so it re-rated Nvidia for this new engine of growth quickly but not fully, and not all at once. That’s why the stock could keep climbing even after big moves. There was still room to re-rate as each new quarter proved the growth was real. Of course, demand has to hold for years for that to continue. We’re two years in, with more to come. Though Nvidia’s growth has since slowed, and the market no longer rewards the share price the way it once did.
finally what I think Businesses occasionally hit inflection points. They’re rare—but AI has triggered them across a whole range of companies, turning unglamorous names into the talk of the town.
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