Quote Originally Posted by LordEC911 View Post
Please tell me you didn't just go off the market cap. (though it is obvious you did...)
Market cap |= assets
AMD would be a steal at $7.3 billion, since it is worth about $14-15billion and Nvidia would be a terrible buy, since it is worth only $3-4billion.

Anyways, just letting you know that's not how things work.
Market cap most certainly is how such things work. The value of a company as a going concern often has little relation to book value much less just a measure of its assets. The value of a company is based on what the market is willing to pay for an ownership interest in that company, i.e. the shares of that company's stock.

http://en.wikipedia.org/wiki/Market_cap
Market capitalization represents the public consensus on the value of a company. A corporation, including all of its assets, may be freely bought and sold through purchases and sales of stock, which will determine the price of the company's shares. Its market capitalization is this share price multiplied by the number of shares in issue, providing a total value for the company's shares and thus for the company as a whole.

Many companies have a dominant shareholder, typically a government or a family. Most stockmarket indices (DOW, S&P 500, BSE, FTSE, DAX, Nikkei, MSCI) adjust for these by working on a "free float" basis, ie the market cap is the value of the publicly tradable part of the company.

Note that market capitalization is a market estimate of a company's value, based on perceived future prospects, economic and monetary conditions, and therefore largely independent of a company's history. Stock prices can also be moved by speculation about changes in expectations about profits or about mergers and acquisitions.