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IMO this is less about DeepSeek and more that Nvidia is essentially a bubble/meme stock that is divorced from the reality of finance and business. People/instit

• onlyrealcuzzo 2y ago
  Hard to argue Nvidia is a meme stock and that Tesla is not a bigger meme stock. If meme stocks were imploding, why is Tesla fine? This is about DeepSeek.
  • paxys 2y ago
    What does any of this have to do with Tesla? Even if Tesla is a bigger bubble, not all bubbles have to pop at the same time.
  • coliveira 2y ago
    Tesla is playing the political game with Trump. They're riding that wave. Musk always find some new reason for people to believe the stock.
  • pokstad 2y ago
    The market can stay irrational longer than you can stay solvent.
• tgtweak 2y ago
  Hype buyers are also Hype sellers - anything Nvidia was last week is exactly what it is this week - DeepSeek doesn't really have any impact on Nvidia sales - Some argument could be made that this can shift compute off of cloud and onto end user devices, but that really seems like a stretch given what I've seen running this locally.
  • zozbot234 2y ago
    The full DeepSeek model is ~700B params or so - way too large for most end users to run locally. What some folks are running locally is fine-tuned versions of Llama and Qwen, that are not going to be directly comparable in any way.
    • m00x 2y ago
      Many people are missing this due to journalists completely missing the point when presenting these facts. Distilled models are nothing new.
      • mtkd 2y ago
        Ollama calling the distilled models deepseek-r1:7b etc. doesn't help
  • Analemma_ 2y ago
    I agree hype is a big portion of it, but if DeepSeek really has found a way to train models just as good as frontier ones for a hundredth of the hardware investment, that is a substantial material difference for Nvidia's future earnings.
    • zozbot234 2y ago
      > if DeepSeek really has found a way to train models just as good as frontier ones for a hundredth of the hardware investment Frontier models are heavily compute constrained - the leading AI model makers have got way more training data already than they could do anything with. Any improvement in training compute-efficiency is great news for them, no matter where it comes from. Especially since the DeepSeek folks have gone into great detail wrt. documenting their approach.
      • rpcope1 2y ago
        > leading AI model makers have got way more training data already than they could do anything with. Citation needed.
• dgemm 2y ago
  I think less of that and more of real risks - Nvidia legitimately has the earnings right now. The question is how sustainable that is, when most of it is coming from 5 or so customers that are both motivated and capable of taking back those 90% margins for themselves
  • jhickok 2y ago
    Regarding their earnings at the moment, I know it doesn't mean everything, but a ~50 P/E is still fairly high, although not insane. I think Ciscos was over 200 during the dotcom bubble. I think your question about the 5 major customers is really interesting, and we will continue to see those companies peck at custom silicon until they can maybe bridge the gap from just running inference to training as well.
  • marcosdumay 2y ago
    They don't have anything close to the earnings to justify the price they have reached. They are getting a lot of money, but their stock price is in a completely different universe. Not even that $500G deal people announced, if spent exclusively on their products could justify their current price. (Nah, notice that just the change on their valuation is already larger than that deal.)
    • rsanek 2y ago
      Their forward PE is fairly reasonable: Nvidia 27, Apple 31, Amazon 38, Microsoft 33.
• belevme 2y ago
  I don't think it's fair to say NVDA is meme stock, having reported 35B revenue last quarter.
  • master_crab 2y ago
    True but with that revenue number it would mean that before today it was valued at ~100x revenue. That’s pretty bubbly.
    • acchow 2y ago
      Thats 100x quarterly revenue, or 25x annual revenue.
  • danpalmer 2y ago
    I'd say it's a meme stock and based on meme revenue. Much of the 35B comes from the fact that companies believe Nvidia make the best chips, and that they have to have the best chips or they'll be out of the game. DeepSeek supposedly nullifies that last part.
    • buffington 2y ago
      Didn't DeepSeek train on Nvidia hardware though? I can't see how DeepSeek hurts Nvidia, if Nvidia is what enables DeepSeek.
      • amazingamazing 2y ago
        that's not entirely relevant. the simplest way to present the counter argument is: - suppose you could train the best model with a single H100 for an hour. would that hurt or harm nvidia? - suppose you could serve 1000x users with a 1/1000 the amount of gpus. would that hurt or harm nvidia? the question is how big you think the market size is, and how fast you get to saturation. once things are saturated efficiency just results in less demand.
      • danpalmer 2y ago
        Supposedly DeepSeek trained on Nvidia hardware that is not current generation. This suggests that you don't need the current generation to make the best model, which a) makes it harder for Nvidia to sell each generation if it's more like traditional compute (how's Intel's share price today?), and b) opens the door to more competition, because if you can get an AMD chip that's 80% as good for 70% of the price, that's worth it. I'm skipping over some details of course, but the current Nvidia valuation, or rather the valuation a few days ago, was based on them being the only company capable of producing chips that can train the best models. That wasn't true for those in the know before, but is now very much more clearly not true.
• energy123 2y ago
  This is a cookie cutter comment that appears to have been copy pasted from a thread about Gamestop or something. DeepSeek R1 allegedly being almost 50x more compute efficient isn't just a "vague rumor". You do this community a disservice by commenting before understanding what investors are thinking at the current moment.
  • paxys 2y ago
    Has anyone verified DeepSeek's claims about R1? They have literally published one single paper and it has been out for a week. Nothing about what they did changed Nvidia's fundamentals. In fact there was no additional news over the weekend or today morning. The entire market movement is because of a single statement by DeepSeek's CEO from over a week ago. People sold because other people sold. This is exactly how a panic selloff happens.
    • energy123 2y ago
      They have not verified the claims but those claims are not a "vague rumor". Expectations of discounted cash flows, which is primarily what drives large cap stock prices, operates on probability, not strange notions of "we must be absolutely certain that something is true". A credible lab making a credible claim to massive efficiency improvements is a credible threat to Nvidia's future earnings. Hence the stock got sold. It's not more complicated than that.
      • grazing_fields 2y ago
        [dead]
    • KiwiJohnno 2y ago
      Not a true verification but I have tried the Deepseek R1 7b model running locally, it runs on my 6gb laptop GPU and the results are impressive. Its obviously constrained by this hardware and this model size as it does some strange things sometimes and it is slow (30 secs to respond) but I've got it to do some impressive things that GPT4 struggles with or fails on. Also of note I asked it about Taiwan and it parroted the official CCP line about Taiwan being part of China, without even the usual delay while it generated the result.
• codingwagie 2y ago
  No the reality of AI models fundamentally changed
• segasaturn 2y ago
  Correct, Nvidia has been on this bubble-like tragectory since before the stock was split last year. I would argue that today's drop is a precursor to a much larger crash to come.
• httpz 2y ago
  Nvida has a P/E of 47. While it may be a bit high for a semiconductor company, it's definitely not a meme stock figure.
  • snailmailstare 2y ago
    Yes and no, going from 47 to 50 would buy a few of the most popular meme stocks so there simply aren't enough people to make it a true meme stock with that market cap.
  • anon291 2y ago
    The forward PE is half that based on real numbers of future orders reported in company reports.
• KiwiJohnno 2y ago
  Not quite, I believe this sell off was caused by DeepSeek showing with their new model that the hardware demands of AI are not necessarily as high as everyone has assumed (as required by competing models). I've tried their 7b model, running locally on a 6gb laptop GPU. Its not fast, but the results I've had have rivaled GPT4. Its impressive.
  • donsupreme 2y ago
    > I've tried their 7b model Anything other than their 671b model are just distilled models on top of Qwen and Llama using their 671b reasoning data output, right?
    • KiwiJohnno 2y ago
      Correct. Its the best model I've been able to run locally, by a long shot
  • xiphias2 2y ago
    I believe you that it had to do with the selloff, but I believe that efficiency improvements are good news for NVIDIA: each card just got 20x more useful
    • amazingamazing 2y ago
      each card is not 20x more useful lol. there's no evidence yet that the deepseek architecture would even yield a substantially (20x) more performant model with more compute. if there's evidence to the contrary I'd love to see. in any case I don't think a h800 is even 20x better than a h100 anyway, so the 20x increase has to be wrong.
      • jdietrich 2y ago
        We need GPUs for inference, not just training. The Jevons Paradox suggests that reducing the cost per token will increase the overall demand for inference. Also, everything we know about LLMs points to an entirely predictable correlation between training compute and performance.
• deleted 2y ago
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• behringer 2y ago
  Whenever the internet tells you to buy, it's a huge warning that a pump and dump is occurring.
• digitcatphd 2y ago
  Exactly. Everything is massive kindle for a wildfire and it comes to show how tiny of a spark it takes. Yet - people keep adding more kindle.
• 827a 2y ago
  I'm sorry, but this is just so, so wrong. Nvidia is an insane company. You can make the argument that the entire sector is frothy/bubbly; I'm more likely to believe that. But, here's some select financials about NVDA: NVDA Net income, Quarter ending in ~Oct2024: $19B. AMD? $771M. INTC? -$16.6B. QCOM? $3B. AAPL? $14B. Revenue growth, YoY? +93%. AMD? +17%. INTC? -6%. QCOM? +18%. AAPL? +6%. Margin? 55%. AMD? 11%. INTC? -125%. QCOM? 28%. AAPL? 15%. P/E Ratio? 46. AMD? 103. INTC? N/A, unprofitable. QCOM? 19. AAPL? 34. NFLX? 54. GME? 151. Their P/E Ratio doesn't even classify them as all that overvalued. Think about that. Price to earnings, they are cheaper than Netflix, Gamestop, they're about the same level as WALMART, you know, that Retailer everyone hates that has practically no AI play, yeah their P/E is 40. Nvidia is an insane company. Insane. We've had three of the largest country-economies on the planet announce public/private funding to the tune of 12 figures, maybe totaling 13 figures when its all said and done, and NVDA is the ONLY company on the PLANET that sells what they want to buy. There is no second player. Oh yeah, Google will rent you some TPUs, haha yeah sure bud. China wants to build AI data centers, and their top tech firms are going to the black market smuggling GPUs across the ocean like bricks of cocaine rather than rely on domestic manufacturers, because not even other AMERICAN manufacturers can catch up. Sure, a 10x drop in cost of intelligence is initially perceived as a hit to the company. But, here's the funny thing about, let's say, CPUs: The Intel Northwood Pentium 4 was released in 2001; with its 130nm process architecture, it sipped a cool 61 watts of power. With today's 3nm process architecture, we've built (drumroll please) the Intel Core Ultra 5 255, which consumes 65 watts of power. Sad trombone? Of course not; its a billion times more performant. We could have directed improvements in process architecture toward reducing power draw (and certainly, we did, for some kinds of chips). But, the VAST, VAST, VAST majority of allocation of these process improvements was in performance. The story here is not "intelligence is 10x cheaper, so we'll need 10x fewer GPUs". The story is: "Intelligence is 10x cheaper, people are going to want 10x more intelligence."
• segmondy 2y ago
  Nah, this is not about Nvidia being a bubble. This is about people forgetting that software will keep eating the world and Nvidia is a hardware company no matter how many times people say it's a software company and talk about Cuda. Yes, CUDA is their moat, but they are not a software company. See my post on reddit from 10 months ago about this happening. https://www.reddit.com/r/LocalLLaMA/comments/1c0je6h/comment/kyx335r/ https://www.reddit.com/r/LocalLLaMA/comments/1c0je6h/comment... "The biggest threat to NVIDIA is not AMD, Intel or Google's TPU. It's software. Sofware eats the world!" "That's what software is going to do. A new architecture/algorithm that allows us current performance with 50% of the hardware, would change everything. What would that mean? If Nvidia had it in the books to sell N hardware, all of a sudden the demand won't exist since N compute can be realized with the new software and existing hardware. Hardware that might not have been attractive like AMD, Intel or even older hardware would become attractive. They would have to cut their price so much, the violent exodus from their stocks will be shocking. Lots of people are going to get rich via Nvidia, lots are going to get poor after the fact. It's not going to be because of hardware, but software." A lot of people are saying that I'm wrong on other hardware like AMD or Intel, but this article by Stratechery agrees, all other hardware vendors are possibly relevant again. I didn't talk about Apple because I was focused on the server side, Apple has already won the consumer side and is so far ahead and waiting for the tech to catch up to it. The biggest threat to Nvidia is still more software optimization.
  • Jlagreen 2y ago
    For 2 decades we were told how Apple will have to cut their margins due to competition and so on. Today, it's simple. Apple has 25% unit share in smartphone markets and 75% profit share. Apple makes 3x the profit of ALL OTHER smartphone vendors combined. And this is exactly where Nvidia's goal is. The AI compute market will grow, Nvidia will lose unit market share but Nvidia will retain their profit market share. Simple as that. And by the way, Nvidia is way ahead in SW compared to alternatives. Most here have the DIY glasses on. But enterprises and businesses have different lenses. For those not being Tech they need secure and working solution with enterprise grades. Nvidia is among the few to offer this with Enterprise AI solutions (NeMo, NIMs, etc.). Nvidia's SW moat isn't CUDA, CUDA is an API for performance and stability. Nvidia's SW moat is in the frameworks for applications for many differnt industries and of course ALL Nvidia SW will require Nvidia HW. A company using Nvidia enterprise SW solutions and consultancy will never use anything except Nvidia HW. Nvidia has a program with >10k AI startups being supported with free consulting and HW support. Nvidia is basically grooming their next generation customers by themselves. You have no idea, many think Nvidia is only selling some chips and that's where they are wrong. Nvidia is a brand, an ecosystem and they will continue to grow from there. See gaming, much more standards and commodity in SW than AI SW. There is no CUDA, you can swap a Nvidia card with AMD card within a minute. So let me know, how come for 2 decades that Nvidia has continously 80-95% market share?
• maram 2y ago
  [flagged]
• anon291 2y ago
  Nvidia's forward PE before this is 27, based off of real orders. Unless orders are being canceled, the stock price should be significantly higher