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Nvidia surges about $500B in 6 wks, nearly much as Tesla is worth
- moose_man 3y agoTell me we're not in a bubble. =| I mean Tesla itself is hideously overvalued.
- robertlagrant 3y agoYou should keep that sort of tip under your hat and short them yourself.
- moose_man 3y agoWhy would I do that? I think the fact that this sort of insane manic runups happens every few months on an anointed stock since the GameStop spectacle shows that institutional investors have now harnessed that sort of movement into a regular market maneuver. This isn't a sign of a functional market, why would I do something rational in a broken market?
- aniforprez 3y agoSince... the Gamestop spectacle? Do you hear yourself? Stock market darlings have probably been a thing since the stock market
- moose_man 3y agoOh yes, Trumps SPAC DWAC was truly a market darling.
- aniforprez 3y agoYeah man no reason the SPAC in the name of a former President with companies he's propped up who is the leading candidate for the opposition party with the incumbent reportedly having abysmal ratings would be having a surge You think the stock market is filled with "rational" actors? It has always ALWAYS been a vibe check since its existence. The Tesla stock is obviously overvalued, not because there is some grand conspiracy to prop up the stock by a bunch of retail investors but because Elon is a hype man and he hypes up his own stocks. Tesla being overvalued is not a new phenomenon
- jjackson5324 3y ago> anointed stock since the GameStop spectacle Mania's have been a thing since the start of markets. It's so funny to see HN readers who know absolutely nothing about finance or capital markets have "houlier-than-thou" attitudes towards institutional money. > why would I do something rational in a broken market Why do you think you're the rational one? That's the entire point of how markets work. No one thinks markets are fully efficient and the way you make money by trading is through exploiting inefficiencies. The market was in a panic mode around Facebook a year and a half ago and if you were smart enough to see that and take advantage then you'd have 4x'd your investment. But I guess you're "too rational" to make money off that sort of thing?
- cm2187 3y agoGoing short a bubble is a reliable way to become insolvent unless you time the market perfectly, in other words luck.
- miroljub 3y ago> You should keep that sort of tip under your hat and short them yourself. Why? The more people shorting something, the better chance for short to succeed. It's in the best self-interest of all people shorting something to be as loud as possible about that.
- ceejayoz 3y agoTiming shorts is tough; even clear bubbles can last unexpectedly long. As popularized in "The Big Short": https://en.wikipedia.org/wiki/Michael_Burry https://en.wikipedia.org/wiki/Michael_Burry > During his payments toward the credit default swaps, Burry suffered an investor revolt, where some investors in his fund worried his predictions were inaccurate and demanded to withdraw their capital. Eventually, Burry's analysis proved correct: He made a personal profit of $100 million and a profit for his remaining investors of more than $700 million. Scion Capital ultimately recorded returns of 489.34% (net of fees and expenses) between its November 1, 2000, inception and June 2008. The S&P 500, widely regarded as the benchmark for the US market, returned just under 3%, including dividends over the same period.
- rvba 3y agoThe quote "The market can stay irrational longer than you can stay solvent" is attributed to John Maynard Keynes many years before "the big short" movie even came out.
- dubcanada 3y agoMost of Tesla's value is not actually Tesla, but it's an investment in Elon Musk, and treated more as a moonshot investment then a car company. So it's grossly higher then your average car company. But we could be in a bubble, the key is bubbles can last for years.
- cduzz 3y agoOn the face of it, "How can Tesla have 2x the market cap of Toyota?!?!" sounds pretty sane. Tesla owns its dealership / sales network; what's the value of those "dealerships"? Similarly tesla runs a huge charging network and has convinced every other manufacturer to switch to their network (in North America). And tesla makes a bunch of power generation / distribution stuff. So "a car company" is incomplete. They also have tons of willing beta testers / AI trainers to go out and train their self driving model -- any tesla out there is collecting driving data and is getting trained by observing the driver's driving and comparing it to "what I'd have done" driving; not sure they'll ever get to "self driving" but there's some value there. Tesla's also run by a drug addled risk addicted narcissist. He's pretty smart and has made a bunch of terrifying large bets that have consistently (cough except solar city and maxwell's dry cell battery stuff, and that eggs / stormfront thing) paid off pretty good.
- nurettin 3y agoTSLA is sort of crashing. The real stock valuation should be more like $150
- social_quotient 3y agoWould have been a good trade - https://x.com/unusual_whales/status/1754572604097409137?s=46&t=lGOOao5YiPjrJVqgbeaQZw https://x.com/unusual_whales/status/1754572604097409137?s=46...
- spicyusername 3y agoI expect they have quite a bit of runway left, too, given the demand for their products and lack of real competition.
- mjburgess 3y agoHopefully this means someone will enter the market and take them out. >50% profit margins are obscene and a product of rent-seeky behaviour on their monopolisation of the gfx compute market.
- tlivolsi 3y agoNvidia has a "monopoly" on the graphics card market because of Cuda. AMD's hardware is catching up, but until there is a Cuda alternative, Nvidia will continue to dominate.
- mjburgess 3y agoYip, that's the explanation. Making 11bn on a 19bn revenue is, prima fascie, evidence of a very uncompetitive market where this player has some extraordinary anti-competitive market power. Hopefully competitors can take this boom and use it to bring this down. I'm downvoted no doubt by double-thinkers who think 2x on the cost of a graphics card is a bad thing, and would prefer not to pay it. nvidia in the rent-seeker position over all graphics compute is a terrible position to be in, for everyone but a handful of nvidia shareholders
- incrudible 3y agoThere is a hype going on now, the relevant player simply can not afford not to pay that premium. The opportunity cost is too big. As things consolidate, those margins will come down. First world problems.
- aunty_helen 3y agoCuda isn’t rent seeking bro. They developed a technology and people are willing to pay for it. It’s called innovation. For them, this has been a 10+ year long bet that’s now paying off extraordinarily. Check your privilege.
- mjburgess 3y agoSure, they created proprietary CPUs and invented a proprietary language to run on them; prevented as much open source or cross-platform work as possible; and cornered the AI market. Now, they're extracting 50% of what people are paying in profit. Great! And, what, you're their defender? I hope you have shares, or else, you've been hoodwinked. In the "free" market, be assured, you're the loser not the winner. /We/ only win when there's sufficient competition, and clearly, there isnt. It is not in your interest for an nvidia ransom to exist on all AI tech.
- formvoltron 3y agoAren't there startup contenders making more specialized AI hardware? Doesn't Google mostly not rely on NVIDIA? Are intel & amd really just sitting by and allowing nvidia to scoop this market?
- dubcanada 3y agoNVIDIA has the software aspect which leaves them leagues ahead, but AMD is trying to play catchup.
- grubbs 3y agoI've tried to offer alternative options (Intel Gaudi, AMD, etc) to researchers here on campus. There is zero interest.
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- incrudible 3y ago> Are intel & amd really just sitting by and allowing nvidia to scoop this market? Yes, because unlike AMD and Intel, NVIDIA really is a software company with a hardware division, like Apple and Microsoft.
- ptero 3y agoYes, but hardware is hard. Reliably building up to enough volume to put a dent in Nvidia sales is extremely hard and independent of designing the successful product, tying it to current software APIs and convincing users. I am not surprised that a new company, however talented, cannot crack that nut. My 2c.
- incrudible 3y agoThe velocity at which the field is moving dictates that you must not wait for AMD and Intel to catch up with a working and performant implementation, even if the TOPS per dollar are somewhat better on paper.
- xyzzy4747 3y agoI wonder why they don't sell more stock in a public offering at these prices, then use the cash along with shares to acquire a bunch of stuff.
- brianwawok 3y agoAcquisition says you can’t grow the current business faster than you can buy share. These results say quite the opposite.
- xyzzy4747 3y agoBut if let's say the shares are valued very highly, it's a good opportunity to buy businesses that are priced much lower without much dilution.
- lp4vn 3y agoThat's more than the GDP of Argentine in a change that has happened in less than two months. It's crazy how we see such speculation as a normal process and I wonder if that's really a good thing.
- brianwawok 3y agoI’ve surly benefit from both the month and the products of VC and speculation.
- bko 3y agoIt might be over bought, but what you call speculation is a good signal to the company and others. People are seeing the potential and importance of what Nvidia is doing so this attracts more investment and competition. It'll take a lot for a competitor to come in so the prize better be very large
- moose_man 3y agoThis is just the latest example of what has been happening since GameStop. It's a sign that institutional investors took the concept and have been applying it to different stock every few months since then, DWAC, UPST ect. It's not real, it shows the market has been totally gamed.
- iLoveOncall 3y agoGME's price rose to insane values because there wasn't enough shares in the market to satisfy all the short calls. This has nothing to do with NVIDIA's situation.
- moose_man 3y agoBut what if you could achieve the same effect with a bunch of institutional money rushing in over a short period of time? The the first time it happened it might have been an accident, but as a regular occurrence its a sign of manipulation.
- 3y ago
- bedhead 3y agoWhat’s so interesting about this bubble is that virtually all the money is flowing into a single stock. Wild. There are still basically no workable business models and barely any revenues for AI products.
- tlb 3y agoThere are absolutely workable business models. They're just not publicly visible yet. That's fairly common: Facebook or Google didn't monetize for years and pundits wondered if they'd ever make money. In a winner-take-most market, it's generally best to focus entirely on growth until you're #1 before starting to charge money.
- bedhead 3y agoPumping Nvidia by something like $1 trillion on “not publicly visible” business models of any kind anywhere sounds a hell of a lot like “wild speculation run amok” to me. It’s not that I don’t get your argument, but seriously, where is a company that’s making money from charging customers for AI services, let alone enough that there’s a trillion dollar ecosystem here? It just doesn’t exist. Ultimately to support this kind of valuation there have to be paying customers and real business models and real value add at the end of the line otherwise it’s just a bubble like all the ones before.
- easton 3y agoI don't know, MSFT has ~doubled in the last year and I don't think that would've happened without the AI stuff.
- rsynnott 3y agoHaving a high stock price because you say the word "AI" a lot isn't _really_ a business model as such, though.
- indymike 3y ago> There are still basically no workable business models and barely any revenues for AI products. At this point, AIs are being embedded into existing apps as new way to interact with users. Also, you need a decent GPU to run most LLMs, so there is demand in the market for GPUs for all kinds of devices, aside servers at cloud services.
- firechickenbird 3y agoIma short this bubble to zero
- hcmacro 3y agoquite possibly one of the dumbest things you can do, even if you end up being right at some point.
- firechickenbird 3y agoWith the upcoming recession and market crash it’s the perfect timing
- formvoltron 3y agoHow much of this is about chatGPT? Because Bard got a big upgrade yesterday, right? And does Google use Nvidia hardware on Gemini?
- iowemoretohim 3y agoEverything seems to revolve around Tesla/Musk headlines.