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Nvidia is about to pass Apple in market cap

128 points by retskrad 2y ago

skilled 2y ago
My non-finance spider senses tell me this will be the most epic market crash of all time, does anyone think otherwise?
- dawnerd 2y ago
  As long as there's something after the AI hype dies off. Maybe we'll circle back to a gaming boom or another crypto or cars.
  - fragmede 2y ago
    Robots
    - TaylorAlexander 2y ago
      Yeah I have been thinking we might see a humanoid robotics hype bubble. They’re flashy tech that can look pretty good in a demo, the hardware is to a state where we can convince people it’s a real product, and the software is just far enough along to trick loads of investors in to funding it. And I don’t know, maybe in ten years time we will have enough AI advances that humanoid robots are useful. But AI is notoriously hard to predict, and if you believe Yann LeCun then all the autoregressive approaches the big LLM companies are using won’t get us to AI that thinks more like an embodied creature, with hierarchical reasoning, variable compute capabilities for solving hard problems, few shot learning, etc.
      - fragmede 2y ago
        The latest demos (eg Unitree) have convinced me that it won't take 10 years for useful humanoid robots to start appearing. AGI is the wrong target. If I have to do the dishes a hundred times to generate training data in order to teach the robot to do my dishes for me, that's still better than me doing the dishes for the rest of my life.
        TaylorAlexander 2y ago
        The Unitree is what made me think we are headed for a bubble. The machines themselves will become commodity hardware. Tesla bot will push the hype side. I just don’t believe current AI systems have what it takes to operate in the real world. It doesn’t have to be AGI at all, but it needs a bunch of capabilities not present in existing models, some of which cannot be created by training on large corpuses from the internet like text and images. [1] Also people can’t afford to spend $20k on a robot just to do their dishes. My good friend tried to make a robot that could pick up dog poop from your back yard, and he went to HAX accelerator and everything, and through extensive research he found that the addressable market for dog poop robots is just too small to fund a company. Now he makes farming robots. (I do too as it happens, on a separate project.) The point is a humanoid robot worth the price of that robot needs to be very useful, and I don’t believe current approaches can get us there. Maybe some uses will be found, just as current AI systems have their uses, but I say it will be a hype bubble because companies will fund raise on massive promises they will never achieve, and investment will move on to something else after 5 years or so. Could still be robotics, but I actually think modular purpose built machines make way more sense than general purpose humanoids. What if instead of a humanoid to load the dishwasher you had a dishwasher that cleaned dishes one at a time. You load up to six table settings in to the bin and a little robotic mechanism grabs them one at a time, runs it through a little car wash setup, and stacks them on the other side. That’s what I want, not a humanoid! [1] I’m really inspired by Yann LeCun’s recent podcast where he talks about the fundamental limitations of current popular (autoregressive) models. https://youtu.be/5t1vTLU7s40 https://youtu.be/5t1vTLU7s40
        fragmede 2y ago
        The Nth large house appliance that doesn't need to be a humanoid is the clothes folding machine that'll go next to the washer dryer. The difficulty of the task makes me doubtful if we'll see that machine, but one can dream! The problem with your proposed non-humanoid dish washer robot arm is that I want the dishes to go into the cabinets, not just into the dish rack, and while the robot doesn't strictly need to be humanoid, it's better that it's mobile, and while uni-wheels like a segway is certainly an option, having cracked bipedal robots, that just seems like a better design choice.
  - fullshark 2y ago
    Bought time for Internet of Things to make a comeback
    - Jensson 2y ago
      Internet of AI Things!
  - mistermann 2y ago
    Local private generation of pornography could be a huge driver, doubly so with VR headsets. There's also nothing stopping them from bringing some consumer software to the market.
- sandworm101 2y ago
  They said the same about Tesla when it became worth more than Ford and GM combined.
  - mnau 2y ago
    Sure, but Tesla is down 50% from all time high. I don't see durable moat for nvidia. They have best stuff now (and likely for a few years), but it's design for relatively predictable workloads with known best solutions. Everyone sees the money nvidia makes and wants a piece of it (e.g. Jim Keller and hubdreds if others). Make something with lower TCO, proper integrations with pyrorch and co and B2B will buy.
    - greenavocado 2y ago
      Nothing is going to displace CUDA in the short term. ROCm is a piece of garbage. Intel is miles behind.
      - Jensson 2y ago
        Can't someone else just implement CUDA for their chips? I don't see that being worth trillions, it is hard but isn't that hard to replicate. Billions makes sense, not trillions.
        fragmede 2y ago
        "just"
        Jensson 2y ago
        Compared to a trillion dollars it is "just", it is just a software implementation moat, its a compiler it isn't on the scale of reimplementing windows or so.
        Detrytus 2y ago
        CUDA is propertiary, NVIDIA recently changed it's license terms to forbid implementing CUDA translation layers for non-NVIDIA devices: https://www.techpowerup.com/319984/nvidia-cracks-down-on-cuda-translation-layers-changes-licensing-terms https://www.techpowerup.com/319984/nvidia-cracks-down-on-cud...
- formerly_proven 2y ago
  Apple and NVIDIA have broadly similar revenue and income at this point, but Apple is shrinking while nvda is still growing exponentially.
  - wstrange 2y ago
    I'm not sure that NVidia's moat is all that large. You have to hand it to them, they have executed superbly, but the underlying technology is well understood. You have the hyper-scalers investing in their own silicon, and Intel/AMD are ramping up as well.
    - highwaylights 2y ago
      CUDA and their associated toolkits is their moat. Whether or not one or more of the remaining manufacturers can deliver a compelling substitute for those workloads remains to be seen but OpenCL is far in the rear view at this point and ROCm hasn’t made a difference yet.
      - sangnoir 2y ago
        They hyperscalers can bypass CUDA if it is profitable. Most AI practitioners use Torch rather than CUDA directly, so it's effectively "under the hood". If some director at Meta figures they could reduce Meta's capex by $X billion per year switching to in-house/AMD hardware, they'd make it happen a pocket a decent bonus for themselves and the teams involved.
        mike_hearn 2y ago
        Google have been trying that thesis out for years and yet TPUs aren't flying off the shelves in the way H100s are. The basic problem they seem to have faced is that the hardware was over-specialized. The needs of models changed quite fast. CUDA was flexible enough to roll with it, TPUs weren't. Google went through several TPU generations in only a few years and yet don't seem to have managed to build a serious edge over NVIDIA despite being less flexible. They also lost out because the whole TPU ecosystem is different to PyTorch which is what won out. That's a risk if you do your own hardware. It ends up with a different software stack around it and maybe people pick hw based on sw and not the other way around. So it's not that easy.
- fullshark 2y ago
  The AI bubble bursting would be localized to the tech industry I think and wouldn't cause a crash but it would suck for us. Commercial real estate and city budgets are the only thing that genuinely scares me at the moment but I've been waiting a long time for that shoe to drop.
- gizajob 2y ago
  The retail bulls online are now refusing to listen to that narrative. But it seems like a large correction of NVidia’s price is in the post. Nvidia added $480 billion of market cap in the last week alone. It’s getting pretty absurd. Plus Moores law will catch up to Jensen at some point and we’ll be running LLMs on Raspberry Pis. It’s Cisco/Crypto/Tesla all over again. The price is just going up and staying up for the time being but be ready when it’s time to short it back down. It’ll be epic. P.s. - something weird happened yesterday in that the whole market was down except for nvidia - it’s like Nvidia is almost turning into a black hole, absorbing all the value and money around it, because why invest in anything else? Its market cap is now also bigger than the entire German stock market. This cannot be a good thing. Particularly because I’m quite tech-heavy and AI still isn’t making a huge impact in my life. Software yeah, but the hugely resource intensive LLMs and agents still seem like a curiosity, and I’m not sure where the profits are yet, which is like the dotcom boom all over again. I’ve no doubt that AIs will replace huge numbers of workers, but Jensen seems to envision a future of endless giant data centres running powerful AIs to do all our driving and being our assistants, but I think by the time we get there we’ll probably be looking at around the same number of data centres we have today, and the self-driving will always have to be done in-car for reasons of latency.
  - matwood 2y ago
    Meta spent ~1/3 of it's capex last year on GPUs. Are they going to spend more than 11B+ in future years? The big few companies that make up a huge portion of NVDA's revenue could just hold spend steady and NVDA will contract [1]. NVDA is also in a weird spot where their primary customers are all working to build their own thing to replace/supplement NVDA. A lot like Apple did with ARM, eventually pushing Intel completely out. As algos improve and Moores law marches forward, companies will need fewer of the 'best' GPUs and get by with their in-house versions. [1]https://www.fool.com/investing/2024/03/14/the-scariest-nvidia-statistic-no-one-talking-about/ https://www.fool.com/investing/2024/03/14/the-scariest-nvidi...
    - gizajob 2y ago
      Yeah but what else did Meta spend a ridiculous amount of capex on recently, can you remember? The tens of billions it spent on the metaverse were dead money and its AI ambitions could amount to the same given Meta really doesn’t have much to do with its cash other than keep Facebook and Insta on 99.999999999 uptime.
- burningChrome 2y ago
  You might be right. But in the meantime, there is a whole group of short sellers who are taking it in the shorts: According to data from S3 Partners, investors betting on a decline in Nvidia's share price suffered roughly $2.9 billion in paper losses on Thursday when the stock ended the day 16% higher following the chip-maker's huge earnings beat the evening before. https://finance.yahoo.com/news/nvidias-huge-post-earnings-stock-003829225.html https://finance.yahoo.com/news/nvidias-huge-post-earnings-st...
  - gizajob 2y ago
    Only until it bursts and sells off.
  - gizmo 2y ago
    Articles like these are cheap clickbait. Most short interest in Nvidia are hedges. Nvidia shareholders are sitting on huge untaxed gains. People want to sell but can’t because January is still 6 months away. So they hedge with puts. And market makers then have to short the stock in order to stay market neutral. Everybody and their dog is long nvidia.
    - _yb2s 2y ago
      I don't have a great understanding of how all of these options for betting against something work, but in practice betting against anything seems too risky even if you are 100% sure it will fail, because you also need to know exactly when it will fail, and the longer out you think it will be the less you stand to make and the more risk. Even the most overpriced or poorly ran companies are never going to fail on a predictable timeline. It's pretty obvious TSLA is massively overvalued... but will it crash this month? next year? 20 years from now? who knows.
      - gizmo 2y ago
        If it’s cheaper to hedge (by shorting) and waiting for the long term cap gains tax instead of selling (and paying short term cap gains) that’s what people will do. It has nothing to do with “risky bets” or anything like that. It’s simple tax optimization.
- christoKoiFaire 2y ago
  It makes me think a litte bit of automobile companies where Tesla's market cap is somehow bigger than Mercedes, Stellantis (Fiat, Dodge, Citroën, Alfa Romeo, Jeep, Opel, Peugeot, Ram, Maserati, Chrysler etc.), Porsche-Volkswagen (Audi, Bugatti, Lamborghini, Saab, Bentley, Porsche, VW, Škoda, Seat, Ducati, and a bunch of truck companies), BMW (Mini, Rolls-Royce), BYD, Honda and Ford ...combined.
  - jethro_tell 2y ago
    At its peek price it was worth more than the whole us auto industry while making a touch under 500k cars and the dashes were falling off compared to the 6.5 million in ford, GM, dodge, us Toyota . . . Made no sense. And, as they've shown. Making a car is easy, manufacturing a car at scale is hard and their competition knows how to do the hard part. And, at this point, US auto makers have shown they can build electric cars so Tesla is still over valued.
    - deleted 2y ago
      [deleted]
    - riku_iki 2y ago
      > Making a car is easy, manufacturing a car at scale it looks like tesla manufactured cars just fine, there is no shortage of teslas on market. Demand on EV didn't pick up.
    - goatforce5 2y ago
      Can US auto makers (or even non-Tesla automakers generally) manufacture EVs at sufficient scale? Tesla seems to be far ahead of their competition: https://caredge.com/guides/electric-vehicle-market-share-and-sales https://caredge.com/guides/electric-vehicle-market-share-and... BYD and Xiaomi in China seem to be catching up to Tesla far quicker than the US/European auto makers are.
  - dom96 2y ago
    Yeah, Tesla is long overdue a massive crash.
- matwood 2y ago
  NVDA is ~6% of the S&P depending on the day, so when it corrects we'll likely see a down day, but I'm not sure it has the ability to really spread contagion. Given that such a large percentage of NVDAs revenue comes from a few big providers, the first question would be are they doing poorly or have the simply capped on GPU need for a myriad of reasons.
- lr4444lr 2y ago
  I don't think a crash is coming. Nvidia actually has revenue growth. PE ratio is a very ordinary mid-60s after the Q2 earnings call. Even if the AI hype cycle dies, computing power has and continues to be the oil of the digital age. Growth may slow, but I wouldn't go shorting this company.
  - Jensson 2y ago
    > computing power has and continues to be the oil of the digital age. What would they use this much compute for though except chasing AI/AGI? If the current ever larger transformer race doesn't lead anywhere NVIDIA will crater hard since there isn't anything else worth that much compute currently.
    - mewpmewp2 2y ago
      Even without AGI, there are a lot of use-cases. A small reminder about the scale of the World. If something brings a 5% boost to the productivity of the World, it has a value of 5 trillion per year. If AGI was to happen within 5 years it means that Nvidia is heavily underpriced as AGI would have multiples of hundreds of trillions of value. If we knew for sure that AGI was happening in 5 years, NVIDIA is probably at least 100x under priced.
      - AlexandrB 2y ago
        > If something brings a 5% boost to the productivity of the World, it has a value of 5 trillion per year. What happens if something brings a 5% reduction in productivity? It's already getting harder to find reliable information thanks to AI spam.
        mewpmewp2 2y ago
        The companies which productivity this affects would lose value, but it may not directly affect the value of the leader of the technology, if in some other area it still increases productivity. E.g. if Company A is selling a product which to B gives 5% boost, and for C as well, but C does something harmful with it, that makes the rest of the competition to become -5%. Like arms manufacturers wouldn't lose in value during wartime which is a destructive process for the World as a whole. But if certain weapon allows you to destroy an even opposition then productivity as a whole would decrease by 50%, but the weapon would still have massive value, probably at least 50% of the whole produce. If there is a simplified World with 2 countries where each produces $50 million of value a year and they go to war. Either of them would be willing to pay anything they have for the weapon since alternative is to be wiped out. Even though after beating the enemy instead of $100 million produced per year, it would be temporarily $50 million. The value of a weapon would likely be whatever any of them can dish out, so perhaps over $50 million if they have saved up enough.
- logicallee 2y ago
  There is a gold rush to develop AI that can do any job anyone does. I don't think the biggest maker of the hardware all this runs on is going to do too badly during this period.
  - gizajob 2y ago
    What if they don’t manage to build that AI?
    - TaylorAlexander 2y ago
      In a gold rush, sell picks and shovels. Even if no one build a human level AI, it’s hard to imagine people would stop trying.
      - gizajob 2y ago
        True, true. But in a gold rush once everyone has a pick and a shovel the gold tends to get mined out extremely rapidly and 95% of the people go home with the same nada that they started with.
    - fullshark 2y ago
      Then these corporations will pay for idiosyncratic/specialized machine learning software, and a lot of it will be useful to clients.
- swarnie 2y ago
  Nvidia make a product they can't build and get out the door fast enough. I think apple still make a yearly phone although i can't tell the difference between the 8, 12, 14 or 16 (?) My money is on the datacentre boys.
- gizmo 2y ago
  Very unlikely. Big crashes occur when businesses sell hot air or cook their books. NVidia is overpriced but they are also the sole producer of the world’s most advanced AI chips. I can’t see any scenario where demand for AI chip levels off in the coming years. The worst case scenario is NVidia’s profit margins hurting because competitors hit the market sooner than expected. But even when that happens NVidia will still be worth a trillion. Hardly an epic crash.
  - B56c 2y ago
    Demand for AI chips is predicated on those chips producing value for their customers. But are there any AI products that are generating significant revenue yet? If those fail to materialize there will be a gigantic crash.
    - whimsicalism 2y ago
      kinda seems obvious application people are going to be able to generate revenue from this, but maybe i'm an idiot
      - B56c 2y ago
        The challenge isn't just to generate revenue, but to generate a TON of revenue that justifies the massive investments these companies are making. It's not obvious to me that any of these products are going to be as successful as the market needs them to be.
        whimsicalism 2y ago
        The massive capital investments are mostly coming from companies that are going to be selling these as services, so not necessarily the product builders themselves. I think there will be a lot of products finding revenue coming.
    - gizmo 2y ago
      Cost savings in marketing, advertising are already substantial. Large businesses are running pilots with on-premises LLMs with promising results. Aaron Levie of Box.com has been outspoken about it: https://x.com/levie/status/1793479934645842141 https://x.com/levie/status/1793479934645842141
- elorant 2y ago
  I don’t think it will be a crash per se, I just think that at some point every major cloud provider will build their own silicon and this will drive demand for NVidia’s cards down by a lot. It will take some years for it to happen, but it will happen eventually.
  - ryandvm 2y ago
    Not implausible, but I'd say we're 10 years out from the FAANGs replacing their silicon AND CUDA.
    - Jensson 2y ago
      Google is already there, others are starting to look at it. And one of them might sell to the others if it becomes profitable enough.
      - Daishiman 2y ago
        Yeah but google has shown complete ineptitude at selling anything that’s not their cash cow and the change in culture doesn’t seem close by.
    - mrbungie 2y ago
      Gemini might not be as cool as GPT, but it already runs on TPUs. So the "G" in FAANG is not as dependent on Nvidia as the others.
    - matwood 2y ago
      It doesn't have to be a full replacement. Meta for example is already running both. Interesting how they state [1]: "This announcement is one step in our ambitious infrastructure roadmap. By the end of 2024, we’re aiming to continue to grow our infrastructure build-out that will include 350,000 NVIDIA H100 GPUs as part of a portfolio that will feature compute power equivalent to nearly 600,000 H100s." 350k NVDA GPUs, but the compute power of 600k. See here for how quickly their silicon is advancing [2]. No one is saying NVDA will go away. But the stock is priced for near perfect growth projections. NVDA's second biggest customer like Meta cutting back even just a bit will hit NVDA's bottom line. That's the stock risk. [1] https://engineering.fb.com/2024/03/12/data-center-engineering/building-metas-genai-infrastructure/ https://engineering.fb.com/2024/03/12/data-center-engineerin... [2] https://ai.meta.com/blog/next-generation-meta-training-inference-accelerator-AI-MTIA/ https://ai.meta.com/blog/next-generation-meta-training-infer...
- Ekaros 2y ago
  China-Taiwan conflict could be a trigger. If the chips stop flowing, lot of tech will go down. And they could drag rest of the market with them even if those are less affected. Other possibility is something finally snapping even without that sort of trigger. But that could take rather long time still.
- onlyrealcuzzo 2y ago
  Even if Nvidia were to crash 75% (which it probably won't) - there have been 2 worse crashes in the last 25 years. It wouldn't even come close to comparing to the Great Depression.
- cjk2 2y ago
  Yeah. Rode the hype. Made a killing. Fucking off now and finding the next bubble… Existential risks such as hyped gains and regulation are starting to take a foothold.
- deleted 2y ago
  [deleted]
- nashashmi 2y ago
  AI is here to stay. And local AI will be toyed with for some time longer. This is leading to the purchase of massive computing powers. The possibility of it being something one day is driving the sales and the speculation. However, (my prediction is) AI will be able to be run on fewer resources than today. And if this optimization comes (too soon), the speculation will crash. If it comes late, the buying and selling will have already happened. And NVIDIA will reap the profits in the meantime. NVIDIA should liquidate stock. Now is a good time.
- 2OEH8eoCRo0 2y ago
  Triggered by the CCP's takeover of Taiwan. Buffett sold his stake in TSMC because of geopolitical uncertainty and the way I see it TSMC and NVIDIA are attached at the hip.
  - Daishiman 2y ago
    I this the US government understands this very well and are more than willing to put their money where their mouth is.
- rldjbpin 2y ago
  medium-term short opportunity. but time your entry after the next few quarters.
- nojvek 2y ago
  If you are an NVDA investor, I suggest you set trailing % stop sells. That way you can keep most of the gains incase of a crash. Nvidia needs one bad quarter of growth and they see the same fate as Tesla. Growth drives the market frenzy.
- paulmd 2y ago
  How can you look at numbers like this and think otherwise? Market didn’t exist a few years ago and now it’s going to go up infinitely? https://i.imgur.com/20DZLRg.jpeg https://i.imgur.com/20DZLRg.jpeg
jjcm 2y ago
AI demand doesn't look like it's going anywhere in the next year, and their revenue is at least in the ballpark (26b vs 90b for apple). That said, price is usually dictated by the delta in growth. I think it's unrealistic to expect another 262% YoY growth over the next 12 months for Nvidia, especially with a lot of their upper-limit being determined by TSMC's capacity. In addition, there are significant pushes in motion to get processing on-device, both for security reasons and price reasons. I can't see these earnings being sustainable for nvidia over the long run.
- a13n 2y ago
  Unless AI demand increases? Which seems likely, or at least possible.
  - riku_iki 2y ago
    Or decrease. It looks like there is 200B industry is already sucking funds, but no end-user app with strong revenue stream is on the market yet.
    - AlexandrB 2y ago
      And then consider what AI content spam might do to ad revenue, which many AI-adjacent companies depend on.
- dagmx 2y ago
  Is that “ballpark”? It’s a 3x multiple. I do agree that growth will cap out. A lot of the massive growth is due to the previous fiscal year being effectively a crash. It’s impressive that they’ve recovered but the same quarter next year will not have the benefit of a bad quarter to compare against.
- whimsicalism 2y ago
  Even if current AI progress caps out at GPT-4 level capability, we are only scratching the surface of how much application integration there is going to be. Until AMD or someone catches up, inference could easily 10x demand from where it probably currently is.
synergy20 2y ago
Nvidia essentially has no competitors so far, the competitors are in fact years behind, the moat is deep and wide, it will be the No1 market cap company for a few years down the road probably, if it keeps executing well that is. Apple's all products can easily be replaced. Nvidia could buy some cloud companies to become AI-cloud vendor too, instead of just selling equipment and chips, that will make it even bigger.
- sleepyhead 2y ago
  "Apple's all products can easily be replaced." - No wireless. Less space than a Nomad. Lame.
  - AlexandrB 2y ago
    I had the same thought. Apple has a lot of "stickiness" for their customers - whether you think this is due to superior technology or just marketing is debatable. Meanwhile, raw computing power is fundamentally fungible and there's a lot of incentive to undercut NVDA's offerings. The only question is how long it will take to do so.
    - sangnoir 2y ago
      Apple is only sticky to those who buy into the ecosystem. Those whose a single Apple device (or 2) without paying for any Apple service are not trapped in the walled garden
      - sleepyhead 2y ago
        > Apple is only sticky to those who buy into the ecosystem That's half of the total market in many countries.
    - thebruce87m 2y ago
      > superior technology or just marketing is debatable “Superior customer experience” is missing from this. I don’t care if the processor in the iPhone is the fastest or not, or if it has 8Gb of RAM vs some Samsung and I care even less about marketing.
andrewmcwatters 2y ago
Every Tom, Dick and Harry's DCF (using FCF) analysis on the market says they're overvalued, so if you wanted in, you'd better do your homework on what you think is an acceptable MC value.
humanlion87 2y ago
It is kind of interesting to see that even with this crazy run up in price over the past week, the PE ratio is around ~65 (for comparison Apple's PE is at ~30 and AMD is ~240). Considering the "expected growth" in AI the PE ratio doesn't seem too bad. Of course, PE ratio is just one parameter and doesn't necessarily describe the whole picture. I also wonder whether the announced stock split is contributing to the short-term price increase (since people will expect more money to flow in once the stock is a more "accessible" ~$100).
- Avalaxy 2y ago
  Interesting indeed. Historically, a PE ratio of 65 is even quite low for NVDA: https://ycharts.com/companies/NVDA/pe_ratio https://ycharts.com/companies/NVDA/pe_ratio
daft_pink 2y ago
In the short run, the market is a voting machine but in the long run, it is a weighing machine. - Warren Buffett
- iheartblocks 2y ago
  That was actually Benjamin Graham https://www.goodreads.com/quotes/831517-in-the-short-run-the-market-is-a-voting-machine https://www.goodreads.com/quotes/831517-in-the-short-run-the...
OtherShrezzing 2y ago
It's maybe reasonable to consider this an absurd bubble surrounding AI, but it is a demand-driven phenomenon from the point of view of Nvidia. Right now, you can listen to CEOs of Nvidia's biggest clients saying things like "the current bottleneck is the bureaucracy around building nuclear powerplants to provide energy to our datacenters". The Saudi investment fund is shopping around for AI ventures to throw hundreds of billions at. Altman is suggesting he'd be able to utilise a multi-trillion dollar raise. These are big indicators that the demand for Nvidia's products will remain strong for some time to come. The amount of money that is aimed at AI, which ultimately a large portion of will land in Nvidia's bank account, is staggering.
- mrbungie 2y ago
  Demand driven mainly by hyperscalers. And hyperscalers (MSFT as an example) are aggressively forcing customers (using tactics such a latency/performance compromises, one example being completions in 30 secs vs 1.5 min for the same prompt) to move from a Pay2Go schemes to buying Provisioned Throughput Units with minimum commitments in the order of 16-32k USD monthly with big penalties if you don't forecast your own demand with enough accuracy. Those half-assed offerings may be "interesting" to enterprise customers, but the intermediate/final consumer demand is not going to be in the scale where you think everyone and their grandma are going to use AI (as NVDA investors want to believe), the value is just not there. That should say enough about the confidence in the capacity of such giant investments in GPUs to bring revenue in the short term future. They're not selling surplus capacity (from their own products as Copilot), they're hoping to sell snake oil directly to customers.
brcmthrowaway 2y ago
Is it too late to buy?

128 points by retskrad 2y ago

skilled 2y ago

My non-finance spider senses tell me this will be the most epic market crash of all time, does anyone think otherwise?

dawnerd 2y ago
As long as there's something after the AI hype dies off. Maybe we'll circle back to a gaming boom or another crypto or cars.
- fragmede 2y ago
  Robots
  - TaylorAlexander 2y ago
    Yeah I have been thinking we might see a humanoid robotics hype bubble. They’re flashy tech that can look pretty good in a demo, the hardware is to a state where we can convince people it’s a real product, and the software is just far enough along to trick loads of investors in to funding it. And I don’t know, maybe in ten years time we will have enough AI advances that humanoid robots are useful. But AI is notoriously hard to predict, and if you believe Yann LeCun then all the autoregressive approaches the big LLM companies are using won’t get us to AI that thinks more like an embodied creature, with hierarchical reasoning, variable compute capabilities for solving hard problems, few shot learning, etc.
    - fragmede 2y ago
      The latest demos (eg Unitree) have convinced me that it won't take 10 years for useful humanoid robots to start appearing. AGI is the wrong target. If I have to do the dishes a hundred times to generate training data in order to teach the robot to do my dishes for me, that's still better than me doing the dishes for the rest of my life.
      - TaylorAlexander 2y ago
        The Unitree is what made me think we are headed for a bubble. The machines themselves will become commodity hardware. Tesla bot will push the hype side. I just don’t believe current AI systems have what it takes to operate in the real world. It doesn’t have to be AGI at all, but it needs a bunch of capabilities not present in existing models, some of which cannot be created by training on large corpuses from the internet like text and images. [1] Also people can’t afford to spend $20k on a robot just to do their dishes. My good friend tried to make a robot that could pick up dog poop from your back yard, and he went to HAX accelerator and everything, and through extensive research he found that the addressable market for dog poop robots is just too small to fund a company. Now he makes farming robots. (I do too as it happens, on a separate project.) The point is a humanoid robot worth the price of that robot needs to be very useful, and I don’t believe current approaches can get us there. Maybe some uses will be found, just as current AI systems have their uses, but I say it will be a hype bubble because companies will fund raise on massive promises they will never achieve, and investment will move on to something else after 5 years or so. Could still be robotics, but I actually think modular purpose built machines make way more sense than general purpose humanoids. What if instead of a humanoid to load the dishwasher you had a dishwasher that cleaned dishes one at a time. You load up to six table settings in to the bin and a little robotic mechanism grabs them one at a time, runs it through a little car wash setup, and stacks them on the other side. That’s what I want, not a humanoid! [1] I’m really inspired by Yann LeCun’s recent podcast where he talks about the fundamental limitations of current popular (autoregressive) models. https://youtu.be/5t1vTLU7s40 https://youtu.be/5t1vTLU7s40
        fragmede 2y ago
        The Nth large house appliance that doesn't need to be a humanoid is the clothes folding machine that'll go next to the washer dryer. The difficulty of the task makes me doubtful if we'll see that machine, but one can dream! The problem with your proposed non-humanoid dish washer robot arm is that I want the dishes to go into the cabinets, not just into the dish rack, and while the robot doesn't strictly need to be humanoid, it's better that it's mobile, and while uni-wheels like a segway is certainly an option, having cracked bipedal robots, that just seems like a better design choice.
- fullshark 2y ago
  Bought time for Internet of Things to make a comeback
  - Jensson 2y ago
    Internet of AI Things!
- mistermann 2y ago
  Local private generation of pornography could be a huge driver, doubly so with VR headsets. There's also nothing stopping them from bringing some consumer software to the market.
sandworm101 2y ago
They said the same about Tesla when it became worth more than Ford and GM combined.
- mnau 2y ago
  Sure, but Tesla is down 50% from all time high. I don't see durable moat for nvidia. They have best stuff now (and likely for a few years), but it's design for relatively predictable workloads with known best solutions. Everyone sees the money nvidia makes and wants a piece of it (e.g. Jim Keller and hubdreds if others). Make something with lower TCO, proper integrations with pyrorch and co and B2B will buy.
  - greenavocado 2y ago
    Nothing is going to displace CUDA in the short term. ROCm is a piece of garbage. Intel is miles behind.
    - Jensson 2y ago
      Can't someone else just implement CUDA for their chips? I don't see that being worth trillions, it is hard but isn't that hard to replicate. Billions makes sense, not trillions.
      - fragmede 2y ago
        "just"
        Jensson 2y ago
        Compared to a trillion dollars it is "just", it is just a software implementation moat, its a compiler it isn't on the scale of reimplementing windows or so.
      - Detrytus 2y ago
        CUDA is propertiary, NVIDIA recently changed it's license terms to forbid implementing CUDA translation layers for non-NVIDIA devices: https://www.techpowerup.com/319984/nvidia-cracks-down-on-cuda-translation-layers-changes-licensing-terms https://www.techpowerup.com/319984/nvidia-cracks-down-on-cud...
formerly_proven 2y ago
Apple and NVIDIA have broadly similar revenue and income at this point, but Apple is shrinking while nvda is still growing exponentially.
- wstrange 2y ago
  I'm not sure that NVidia's moat is all that large. You have to hand it to them, they have executed superbly, but the underlying technology is well understood. You have the hyper-scalers investing in their own silicon, and Intel/AMD are ramping up as well.
  - highwaylights 2y ago
    CUDA and their associated toolkits is their moat. Whether or not one or more of the remaining manufacturers can deliver a compelling substitute for those workloads remains to be seen but OpenCL is far in the rear view at this point and ROCm hasn’t made a difference yet.
    - sangnoir 2y ago
      They hyperscalers can bypass CUDA if it is profitable. Most AI practitioners use Torch rather than CUDA directly, so it's effectively "under the hood". If some director at Meta figures they could reduce Meta's capex by $X billion per year switching to in-house/AMD hardware, they'd make it happen a pocket a decent bonus for themselves and the teams involved.
      - mike_hearn 2y ago
        Google have been trying that thesis out for years and yet TPUs aren't flying off the shelves in the way H100s are. The basic problem they seem to have faced is that the hardware was over-specialized. The needs of models changed quite fast. CUDA was flexible enough to roll with it, TPUs weren't. Google went through several TPU generations in only a few years and yet don't seem to have managed to build a serious edge over NVIDIA despite being less flexible. They also lost out because the whole TPU ecosystem is different to PyTorch which is what won out. That's a risk if you do your own hardware. It ends up with a different software stack around it and maybe people pick hw based on sw and not the other way around. So it's not that easy.
fullshark 2y ago
The AI bubble bursting would be localized to the tech industry I think and wouldn't cause a crash but it would suck for us. Commercial real estate and city budgets are the only thing that genuinely scares me at the moment but I've been waiting a long time for that shoe to drop.
gizajob 2y ago
The retail bulls online are now refusing to listen to that narrative. But it seems like a large correction of NVidia’s price is in the post. Nvidia added $480 billion of market cap in the last week alone. It’s getting pretty absurd. Plus Moores law will catch up to Jensen at some point and we’ll be running LLMs on Raspberry Pis. It’s Cisco/Crypto/Tesla all over again. The price is just going up and staying up for the time being but be ready when it’s time to short it back down. It’ll be epic. P.s. - something weird happened yesterday in that the whole market was down except for nvidia - it’s like Nvidia is almost turning into a black hole, absorbing all the value and money around it, because why invest in anything else? Its market cap is now also bigger than the entire German stock market. This cannot be a good thing. Particularly because I’m quite tech-heavy and AI still isn’t making a huge impact in my life. Software yeah, but the hugely resource intensive LLMs and agents still seem like a curiosity, and I’m not sure where the profits are yet, which is like the dotcom boom all over again. I’ve no doubt that AIs will replace huge numbers of workers, but Jensen seems to envision a future of endless giant data centres running powerful AIs to do all our driving and being our assistants, but I think by the time we get there we’ll probably be looking at around the same number of data centres we have today, and the self-driving will always have to be done in-car for reasons of latency.
- matwood 2y ago
  Meta spent ~1/3 of it's capex last year on GPUs. Are they going to spend more than 11B+ in future years? The big few companies that make up a huge portion of NVDA's revenue could just hold spend steady and NVDA will contract [1]. NVDA is also in a weird spot where their primary customers are all working to build their own thing to replace/supplement NVDA. A lot like Apple did with ARM, eventually pushing Intel completely out. As algos improve and Moores law marches forward, companies will need fewer of the 'best' GPUs and get by with their in-house versions. [1]https://www.fool.com/investing/2024/03/14/the-scariest-nvidia-statistic-no-one-talking-about/ https://www.fool.com/investing/2024/03/14/the-scariest-nvidi...
  - gizajob 2y ago
    Yeah but what else did Meta spend a ridiculous amount of capex on recently, can you remember? The tens of billions it spent on the metaverse were dead money and its AI ambitions could amount to the same given Meta really doesn’t have much to do with its cash other than keep Facebook and Insta on 99.999999999 uptime.
burningChrome 2y ago
You might be right. But in the meantime, there is a whole group of short sellers who are taking it in the shorts: According to data from S3 Partners, investors betting on a decline in Nvidia's share price suffered roughly $2.9 billion in paper losses on Thursday when the stock ended the day 16% higher following the chip-maker's huge earnings beat the evening before. https://finance.yahoo.com/news/nvidias-huge-post-earnings-stock-003829225.html https://finance.yahoo.com/news/nvidias-huge-post-earnings-st...
- gizajob 2y ago
  Only until it bursts and sells off.
- gizmo 2y ago
  Articles like these are cheap clickbait. Most short interest in Nvidia are hedges. Nvidia shareholders are sitting on huge untaxed gains. People want to sell but can’t because January is still 6 months away. So they hedge with puts. And market makers then have to short the stock in order to stay market neutral. Everybody and their dog is long nvidia.
  - _yb2s 2y ago
    I don't have a great understanding of how all of these options for betting against something work, but in practice betting against anything seems too risky even if you are 100% sure it will fail, because you also need to know exactly when it will fail, and the longer out you think it will be the less you stand to make and the more risk. Even the most overpriced or poorly ran companies are never going to fail on a predictable timeline. It's pretty obvious TSLA is massively overvalued... but will it crash this month? next year? 20 years from now? who knows.
    - gizmo 2y ago
      If it’s cheaper to hedge (by shorting) and waiting for the long term cap gains tax instead of selling (and paying short term cap gains) that’s what people will do. It has nothing to do with “risky bets” or anything like that. It’s simple tax optimization.
christoKoiFaire 2y ago
It makes me think a litte bit of automobile companies where Tesla's market cap is somehow bigger than Mercedes, Stellantis (Fiat, Dodge, Citroën, Alfa Romeo, Jeep, Opel, Peugeot, Ram, Maserati, Chrysler etc.), Porsche-Volkswagen (Audi, Bugatti, Lamborghini, Saab, Bentley, Porsche, VW, Škoda, Seat, Ducati, and a bunch of truck companies), BMW (Mini, Rolls-Royce), BYD, Honda and Ford ...combined.
- jethro_tell 2y ago
  At its peek price it was worth more than the whole us auto industry while making a touch under 500k cars and the dashes were falling off compared to the 6.5 million in ford, GM, dodge, us Toyota . . . Made no sense. And, as they've shown. Making a car is easy, manufacturing a car at scale is hard and their competition knows how to do the hard part. And, at this point, US auto makers have shown they can build electric cars so Tesla is still over valued.
  - deleted 2y ago
    [deleted]
  - riku_iki 2y ago
    > Making a car is easy, manufacturing a car at scale it looks like tesla manufactured cars just fine, there is no shortage of teslas on market. Demand on EV didn't pick up.
  - goatforce5 2y ago
    Can US auto makers (or even non-Tesla automakers generally) manufacture EVs at sufficient scale? Tesla seems to be far ahead of their competition: https://caredge.com/guides/electric-vehicle-market-share-and-sales https://caredge.com/guides/electric-vehicle-market-share-and... BYD and Xiaomi in China seem to be catching up to Tesla far quicker than the US/European auto makers are.
- dom96 2y ago
  Yeah, Tesla is long overdue a massive crash.
matwood 2y ago
NVDA is ~6% of the S&P depending on the day, so when it corrects we'll likely see a down day, but I'm not sure it has the ability to really spread contagion. Given that such a large percentage of NVDAs revenue comes from a few big providers, the first question would be are they doing poorly or have the simply capped on GPU need for a myriad of reasons.
lr4444lr 2y ago
I don't think a crash is coming. Nvidia actually has revenue growth. PE ratio is a very ordinary mid-60s after the Q2 earnings call. Even if the AI hype cycle dies, computing power has and continues to be the oil of the digital age. Growth may slow, but I wouldn't go shorting this company.
- Jensson 2y ago
  > computing power has and continues to be the oil of the digital age. What would they use this much compute for though except chasing AI/AGI? If the current ever larger transformer race doesn't lead anywhere NVIDIA will crater hard since there isn't anything else worth that much compute currently.
  - mewpmewp2 2y ago
    Even without AGI, there are a lot of use-cases. A small reminder about the scale of the World. If something brings a 5% boost to the productivity of the World, it has a value of 5 trillion per year. If AGI was to happen within 5 years it means that Nvidia is heavily underpriced as AGI would have multiples of hundreds of trillions of value. If we knew for sure that AGI was happening in 5 years, NVIDIA is probably at least 100x under priced.
    - AlexandrB 2y ago
      > If something brings a 5% boost to the productivity of the World, it has a value of 5 trillion per year. What happens if something brings a 5% reduction in productivity? It's already getting harder to find reliable information thanks to AI spam.
      - mewpmewp2 2y ago
        The companies which productivity this affects would lose value, but it may not directly affect the value of the leader of the technology, if in some other area it still increases productivity. E.g. if Company A is selling a product which to B gives 5% boost, and for C as well, but C does something harmful with it, that makes the rest of the competition to become -5%. Like arms manufacturers wouldn't lose in value during wartime which is a destructive process for the World as a whole. But if certain weapon allows you to destroy an even opposition then productivity as a whole would decrease by 50%, but the weapon would still have massive value, probably at least 50% of the whole produce. If there is a simplified World with 2 countries where each produces $50 million of value a year and they go to war. Either of them would be willing to pay anything they have for the weapon since alternative is to be wiped out. Even though after beating the enemy instead of $100 million produced per year, it would be temporarily $50 million. The value of a weapon would likely be whatever any of them can dish out, so perhaps over $50 million if they have saved up enough.
logicallee 2y ago
There is a gold rush to develop AI that can do any job anyone does. I don't think the biggest maker of the hardware all this runs on is going to do too badly during this period.
- gizajob 2y ago
  What if they don’t manage to build that AI?
  - TaylorAlexander 2y ago
    In a gold rush, sell picks and shovels. Even if no one build a human level AI, it’s hard to imagine people would stop trying.
    - gizajob 2y ago
      True, true. But in a gold rush once everyone has a pick and a shovel the gold tends to get mined out extremely rapidly and 95% of the people go home with the same nada that they started with.
  - fullshark 2y ago
    Then these corporations will pay for idiosyncratic/specialized machine learning software, and a lot of it will be useful to clients.
swarnie 2y ago
Nvidia make a product they can't build and get out the door fast enough. I think apple still make a yearly phone although i can't tell the difference between the 8, 12, 14 or 16 (?) My money is on the datacentre boys.
gizmo 2y ago
Very unlikely. Big crashes occur when businesses sell hot air or cook their books. NVidia is overpriced but they are also the sole producer of the world’s most advanced AI chips. I can’t see any scenario where demand for AI chip levels off in the coming years. The worst case scenario is NVidia’s profit margins hurting because competitors hit the market sooner than expected. But even when that happens NVidia will still be worth a trillion. Hardly an epic crash.
- B56c 2y ago
  Demand for AI chips is predicated on those chips producing value for their customers. But are there any AI products that are generating significant revenue yet? If those fail to materialize there will be a gigantic crash.
  - whimsicalism 2y ago
    kinda seems obvious application people are going to be able to generate revenue from this, but maybe i'm an idiot
    - B56c 2y ago
      The challenge isn't just to generate revenue, but to generate a TON of revenue that justifies the massive investments these companies are making. It's not obvious to me that any of these products are going to be as successful as the market needs them to be.
      - whimsicalism 2y ago
        The massive capital investments are mostly coming from companies that are going to be selling these as services, so not necessarily the product builders themselves. I think there will be a lot of products finding revenue coming.
  - gizmo 2y ago
    Cost savings in marketing, advertising are already substantial. Large businesses are running pilots with on-premises LLMs with promising results. Aaron Levie of Box.com has been outspoken about it: https://x.com/levie/status/1793479934645842141 https://x.com/levie/status/1793479934645842141
elorant 2y ago
I don’t think it will be a crash per se, I just think that at some point every major cloud provider will build their own silicon and this will drive demand for NVidia’s cards down by a lot. It will take some years for it to happen, but it will happen eventually.
- ryandvm 2y ago
  Not implausible, but I'd say we're 10 years out from the FAANGs replacing their silicon AND CUDA.
  - Jensson 2y ago
    Google is already there, others are starting to look at it. And one of them might sell to the others if it becomes profitable enough.
    - Daishiman 2y ago
      Yeah but google has shown complete ineptitude at selling anything that’s not their cash cow and the change in culture doesn’t seem close by.
  - mrbungie 2y ago
    Gemini might not be as cool as GPT, but it already runs on TPUs. So the "G" in FAANG is not as dependent on Nvidia as the others.
  - matwood 2y ago
    It doesn't have to be a full replacement. Meta for example is already running both. Interesting how they state [1]: "This announcement is one step in our ambitious infrastructure roadmap. By the end of 2024, we’re aiming to continue to grow our infrastructure build-out that will include 350,000 NVIDIA H100 GPUs as part of a portfolio that will feature compute power equivalent to nearly 600,000 H100s." 350k NVDA GPUs, but the compute power of 600k. See here for how quickly their silicon is advancing [2]. No one is saying NVDA will go away. But the stock is priced for near perfect growth projections. NVDA's second biggest customer like Meta cutting back even just a bit will hit NVDA's bottom line. That's the stock risk. [1] https://engineering.fb.com/2024/03/12/data-center-engineering/building-metas-genai-infrastructure/ https://engineering.fb.com/2024/03/12/data-center-engineerin... [2] https://ai.meta.com/blog/next-generation-meta-training-inference-accelerator-AI-MTIA/ https://ai.meta.com/blog/next-generation-meta-training-infer...
Ekaros 2y ago
China-Taiwan conflict could be a trigger. If the chips stop flowing, lot of tech will go down. And they could drag rest of the market with them even if those are less affected. Other possibility is something finally snapping even without that sort of trigger. But that could take rather long time still.
onlyrealcuzzo 2y ago
Even if Nvidia were to crash 75% (which it probably won't) - there have been 2 worse crashes in the last 25 years. It wouldn't even come close to comparing to the Great Depression.
cjk2 2y ago
Yeah. Rode the hype. Made a killing. Fucking off now and finding the next bubble… Existential risks such as hyped gains and regulation are starting to take a foothold.
deleted 2y ago
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nashashmi 2y ago
AI is here to stay. And local AI will be toyed with for some time longer. This is leading to the purchase of massive computing powers. The possibility of it being something one day is driving the sales and the speculation. However, (my prediction is) AI will be able to be run on fewer resources than today. And if this optimization comes (too soon), the speculation will crash. If it comes late, the buying and selling will have already happened. And NVIDIA will reap the profits in the meantime. NVIDIA should liquidate stock. Now is a good time.
2OEH8eoCRo0 2y ago
Triggered by the CCP's takeover of Taiwan. Buffett sold his stake in TSMC because of geopolitical uncertainty and the way I see it TSMC and NVIDIA are attached at the hip.
- Daishiman 2y ago
  I this the US government understands this very well and are more than willing to put their money where their mouth is.
rldjbpin 2y ago
medium-term short opportunity. but time your entry after the next few quarters.
nojvek 2y ago
If you are an NVDA investor, I suggest you set trailing % stop sells. That way you can keep most of the gains incase of a crash. Nvidia needs one bad quarter of growth and they see the same fate as Tesla. Growth drives the market frenzy.
paulmd 2y ago
How can you look at numbers like this and think otherwise? Market didn’t exist a few years ago and now it’s going to go up infinitely? https://i.imgur.com/20DZLRg.jpeg https://i.imgur.com/20DZLRg.jpeg

jjcm 2y ago

AI demand doesn't look like it's going anywhere in the next year, and their revenue is at least in the ballpark (26b vs 90b for apple). That said, price is usually dictated by the delta in growth. I think it's unrealistic to expect another 262% YoY growth over the next 12 months for Nvidia, especially with a lot of their upper-limit being determined by TSMC's capacity. In addition, there are significant pushes in motion to get processing on-device, both for security reasons and price reasons. I can't see these earnings being sustainable for nvidia over the long run.

a13n 2y ago
Unless AI demand increases? Which seems likely, or at least possible.
- riku_iki 2y ago
  Or decrease. It looks like there is 200B industry is already sucking funds, but no end-user app with strong revenue stream is on the market yet.
  - AlexandrB 2y ago
    And then consider what AI content spam might do to ad revenue, which many AI-adjacent companies depend on.
dagmx 2y ago
Is that “ballpark”? It’s a 3x multiple. I do agree that growth will cap out. A lot of the massive growth is due to the previous fiscal year being effectively a crash. It’s impressive that they’ve recovered but the same quarter next year will not have the benefit of a bad quarter to compare against.
whimsicalism 2y ago
Even if current AI progress caps out at GPT-4 level capability, we are only scratching the surface of how much application integration there is going to be. Until AMD or someone catches up, inference could easily 10x demand from where it probably currently is.

synergy20 2y ago

Nvidia essentially has no competitors so far, the competitors are in fact years behind, the moat is deep and wide, it will be the No1 market cap company for a few years down the road probably, if it keeps executing well that is. Apple's all products can easily be replaced. Nvidia could buy some cloud companies to become AI-cloud vendor too, instead of just selling equipment and chips, that will make it even bigger.

sleepyhead 2y ago
"Apple's all products can easily be replaced." - No wireless. Less space than a Nomad. Lame.
- AlexandrB 2y ago
  I had the same thought. Apple has a lot of "stickiness" for their customers - whether you think this is due to superior technology or just marketing is debatable. Meanwhile, raw computing power is fundamentally fungible and there's a lot of incentive to undercut NVDA's offerings. The only question is how long it will take to do so.
  - sangnoir 2y ago
    Apple is only sticky to those who buy into the ecosystem. Those whose a single Apple device (or 2) without paying for any Apple service are not trapped in the walled garden
    - sleepyhead 2y ago
      > Apple is only sticky to those who buy into the ecosystem That's half of the total market in many countries.
  - thebruce87m 2y ago
    > superior technology or just marketing is debatable “Superior customer experience” is missing from this. I don’t care if the processor in the iPhone is the fastest or not, or if it has 8Gb of RAM vs some Samsung and I care even less about marketing.

andrewmcwatters 2y ago

Every Tom, Dick and Harry's DCF (using FCF) analysis on the market says they're overvalued, so if you wanted in, you'd better do your homework on what you think is an acceptable MC value.

humanlion87 2y ago

It is kind of interesting to see that even with this crazy run up in price over the past week, the PE ratio is around ~65 (for comparison Apple's PE is at ~30 and AMD is ~240). Considering the "expected growth" in AI the PE ratio doesn't seem too bad. Of course, PE ratio is just one parameter and doesn't necessarily describe the whole picture. I also wonder whether the announced stock split is contributing to the short-term price increase (since people will expect more money to flow in once the stock is a more "accessible" ~$100).

Avalaxy 2y ago
Interesting indeed. Historically, a PE ratio of 65 is even quite low for NVDA: https://ycharts.com/companies/NVDA/pe_ratio https://ycharts.com/companies/NVDA/pe_ratio

daft_pink 2y ago

In the short run, the market is a voting machine but in the long run, it is a weighing machine. - Warren Buffett

iheartblocks 2y ago
That was actually Benjamin Graham https://www.goodreads.com/quotes/831517-in-the-short-run-the-market-is-a-voting-machine https://www.goodreads.com/quotes/831517-in-the-short-run-the...

OtherShrezzing 2y ago

It's maybe reasonable to consider this an absurd bubble surrounding AI, but it is a demand-driven phenomenon from the point of view of Nvidia. Right now, you can listen to CEOs of Nvidia's biggest clients saying things like "the current bottleneck is the bureaucracy around building nuclear powerplants to provide energy to our datacenters". The Saudi investment fund is shopping around for AI ventures to throw hundreds of billions at. Altman is suggesting he'd be able to utilise a multi-trillion dollar raise. These are big indicators that the demand for Nvidia's products will remain strong for some time to come. The amount of money that is aimed at AI, which ultimately a large portion of will land in Nvidia's bank account, is staggering.

mrbungie 2y ago
Demand driven mainly by hyperscalers. And hyperscalers (MSFT as an example) are aggressively forcing customers (using tactics such a latency/performance compromises, one example being completions in 30 secs vs 1.5 min for the same prompt) to move from a Pay2Go schemes to buying Provisioned Throughput Units with minimum commitments in the order of 16-32k USD monthly with big penalties if you don't forecast your own demand with enough accuracy. Those half-assed offerings may be "interesting" to enterprise customers, but the intermediate/final consumer demand is not going to be in the scale where you think everyone and their grandma are going to use AI (as NVDA investors want to believe), the value is just not there. That should say enough about the confidence in the capacity of such giant investments in GPUs to bring revenue in the short term future. They're not selling surplus capacity (from their own products as Copilot), they're hoping to sell snake oil directly to customers.

brcmthrowaway 2y ago

Is it too late to buy?