It seems fairly obvious, to me, that the issue is that most people make money from the stock price changing rather than from any kind of intrinisic value of the underlying company.
In other words, why should it matter to me what the company's profit margin or asset base or what not is actually worth when I make money if the stock number goes up?
In the short run, markets are a voting machine; in the long run, they’re a weighing machine. — Ben Graham
If you own a slice of nVidia’s shares at a current P/E of 37, after a year, they’ve earned 2.7% of the value and you still have the same stake as you did before. That’s pricing in further growth and upside in earnings from here (otherwise, you could buy US treasuries at a better price), but doesn’t seem outrageous to me.
Disclaimer: I don’t directly own any $NVDA; I do own mutual funds that own some.
In other words, why should it matter to me what the company's profit margin or asset base or what not is actually worth when I make money if the stock number goes up?