Prominent Tech Investor: ‘When We Were Buying Nvidia in 2023, We Were Paying 4 Times Earnings’

Alex Sacerdote, founder of Whale Rock Capital, dropped a line on a recent Invest Like the Best episode that stopped listeners cold: “When we were buying Nvidia in 2023, we were paying 4 times earnings. When we bought Tesla in 2019 for the car S-curve, we were paying 5 times earnings. When we were owning Apple, we were paying 4 times earnings. When we bought Amazon for AWS, we were getting it for free.”

Those figures reflect his forward, S-curve-based earnings-power framework, referring to the price he paid relative to the much larger profits he modeled the businesses would generate 2 to 4 years out.

The Exponential Mispricing Idea

Sacerdote’s core insight is that “the world doesn’t think exponentially, and they’re so focused on the next year or the next quarter.” In his view, that short-term mindset causes investors to consistently underestimate companies positioned at the base of an S-curve, where adoption appears modest before accelerating rapidly.

He believes the biggest opportunities emerge when the market fails to appreciate how quickly growth can compound once that inflection point arrives. His investment framework focuses on three elements: S-curve positioning, competitive advantage, and underappreciated earnings power.

What “4 Times Earnings” Actually Means

When Sacerdote says he paid four times earnings for NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) in 2023, the multiple…