Paul Stenhouse: Nvidia becomes the first company to hit $5trillion and Amazon makes huge staff cuts

Nvidia becomes the first company to hit $5 trillion in value

Since the launch of ChatGPT in 2022, Nvidia's shares have climbed 12x. Just three months ago it was the first company to hit $4 trillion. It's 8.3% of the S&P500 so those who hold low-cost index funds in their retirement accounts will feel the effect of every Nvidia market move - both good and bad. 

Five trillion is just a staggering number. You would need to take New Zealand's government debt ($182 billion) and times it by 27 in order to reach that same number. It's worth almost double the top nine pharma companies combined and 1.6x the top eight global oil companies combined. 

Amazon fires 14,000 people

It made huge cuts to its corporate workforce to cut some of the fat from its covid hiring spree and leaning into AI tooling. Those severance payouts will cost it$1.8 billion. Together with the better than expected results in the AWS segment, the stock popped 7% this week.

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Episode Transcript

Speaker 1 (00:07):
You're listening to the Saturday Morning with Jack Team podcast
from News Talks at b It's.

Speaker 2 (00:13):
A bit of a week of mixed fortunes for some
of the biggest tech companies in the world. So at
the same time as Amazon has announced it is firing
fourteen thousand people in Nvidia has become the first company
in the world to hit a market cap valuation of
five trillion dollars five thousand billion US dollars. Our textbook

(00:35):
Paul Stenhouse, no doubt has a big slice of that pie,
and he's with us this morning.

Speaker 3 (00:41):
He has a very small slice. I will say I
was very lucky. I have got a ten teny slize
for that pie. But it has done very well.

Speaker 2 (00:48):
Yeah.

Speaker 3 (00:48):
I think my investment in it is up eight hundred
or nine hundred percent almost just incredible.

Speaker 2 (00:53):
Yeah, okay, I mean I turned like a dollar. You
gotta sell, Paul, you gotta sell. I reckon their bubbles
pop and sometimes soon come.

Speaker 3 (00:59):
On seriously, right, I mean, like so just.

Speaker 2 (01:03):
Just fantastical, like just come on.

Speaker 3 (01:05):
Yes, I mean we talked about this just three months
ago when it was the first company to hit four
trillion dollars, and in three months it has now hit
another trillion dollars in value, so it's a quarter up
in three months. Is just crazy. And when you start
to put some of this into perspective, it's just it's
eight point three percent of the entire sm P five hundred,

(01:27):
So of the five hundred largest companies that the index tracks,
it's eight point three percent of them, which means if
you're like me and hold some of those low cost
kind of index funds in your retirement account, you certainly
feel every effect, the good, the bad, the ugly when
it comes to in Vidia's market moving up and down.
But the five trillion number, Jack, I have to come
back to it. I had to do some I had

(01:48):
to look at some other companies to think to see
how it compares. Okay, if you take the top nine
pharmaceutical companies in the world, it is worth almost double
those top nine companies. If you take the top eight
global oil companies combine them all, it's worth about one

(02:08):
point five times that. Woww Lea's compare it to something
a little closer to home. How about New Zealand's government
debt of one hundred and eighty two billion, right, it
is twenty seven times greater than New Zealand's debt. There's
just a staggering number.

Speaker 2 (02:27):
Yeah it is. It's crazy. It's just yeah. But I
mean one of the things you say about AI, like,
have we had the results from AI to justify this
kind of valuation for the company that makes the chips
that drives AI.

Speaker 3 (02:42):
I mean no, the market would say ye.

Speaker 2 (02:45):
Yes, I'm sure the market would yeah. Yeah, I don't know.
It just feels like yeah. I mean, who knows where
these things go, right, you know, we'll be sitting here
in three weeks. We could be sitting here in three
weeks saying like, wow, there's been a crazy stock market
crash and the bubbles burst. Or we could be sitting
here being market when he has become the first company
with forty to be worth seven trillion dollars.

Speaker 3 (03:08):
I know. I mean it was three months ago that
it hit four. Yeah, like now it's at five.

Speaker 2 (03:12):
Yeah, crazy, unreal? Okay, Oh, Amazon, fourteen thousand jobs are gone.

Speaker 3 (03:18):
Yeah.

Speaker 2 (03:19):
What does this mean for the state of the company
and what kind of jobs are going?

Speaker 1 (03:22):
Yeah?

Speaker 3 (03:23):
All corporate jobs. So this I mean they hire another
staggering number of people, something like close to a million.

Speaker 2 (03:29):
People around the world or something.

Speaker 3 (03:31):
Just unbelievable. That sounds like it may be too big
of a number, but anyway, huge number of people. These
are all people who work in their corporate offices. These
are desk jobs. Theres are developers, this is HR, this
is facilities, this is not people who are working in
their warehouses. Huge number of people, massive ripple effect across
just every industry. And they're not done either. The guidance

(03:54):
they put out was that they were going to get
rid of thirty thousand jobs. So this is fourteen So
they're expecting another sort of fourteen fifteen thousand jobs at
the start of next year. I've said that they are
trimming some of the fat from their big COVID hiring spree.
They said that they are doing some of the lean
into the AI tooling. Again, just staring numbers, right, you

(04:14):
let go of fourteen thousand people. The severance payments are
expected to be one point eight billion dollars. Wow. But
I mean, look, it didn't have too much of effect
on the market when they made that announcement that the
day was relatively flat. But their AWS or they did
their earnings call just yesterday, I think, and stock popped.

(04:36):
AWS is doing huge things. Stocks up this week seven
percent alone, So I don't think the market minds that
they just lost fourteen thousand people. But yeah, yeah, wow, wow, wow,
I think I think the feed. I don't know, if
you saw the news this week the Fed lowered interest
rates over here, then they you know, they've kind of

(04:57):
put out their guidance of would there be potentially another
cut before the end of the year, and they said, well,
wait and see. They saw that number and that was
a little shopping to them.

Speaker 2 (05:04):
Yeah. Yeah, I'm not surprised. How very quickly done. The maths.
So five trillion, right, if you were earning a dollar
a second, right, one dollar every second, it would take
you one hundred and fifty eight thousand years to get
to five trillion.

Speaker 3 (05:19):
Just incredible, not so.

Speaker 2 (05:21):
Thanks so much for big number. Paul Stenhouse is our
texpert in the money by the sounds of his share
portfolio as well.

Speaker 1 (05:28):
For more from Saturday Morning with Jack Tame, listen live
to News talks'd B from nine am Saturday, or follow
the podcast on iHeartRadio.