4 ms·

Nvidia results show spending on A.I. infrastructure remains robust

50 points by cuttothechase 1y ago

cuttothechase 1y ago
https://archive.is/I9xom https://archive.is/I9xom
techpineapple 1y ago
Wouldn’t this be a lagging indicator?
laughing_man 1y ago
There seems to be no limit to the size of this bubble.
- mocha_nate 1y ago
  i really only started hearing about AI bubble this year. with the housing bubble, people were talking about it in 2005 and it took years for it to finally break. maybe AI bubble is the same
  - tedsanders 1y ago
    Except the housing bubble wasn't actually a bubble. Housing prices today are much higher than in 2007. Based on realized results, the mispricing wasn't the peak of the housing bubble but the trough of the crash. With the benefit of hindsight, the peak actually undervalued how expensive housing would get. (Speaking about the US market in aggregate. Not other countries, nor localities like Las Vegas where the case for a bubble is stronger.)
    - klipt 1y ago
      The price of housing is ultimately a political choice. If voters choose to restrict supply of housing through zoning and other laws, prices can be pushed up hugely.
      - laughing_man 1y ago
        I doubt zoning has any real effect. Henry George realized in the 19th century that if you increase the money supply most of that money goes into driving up the cost of real estate. And the government has been printing money like crazy for decades now. Where I live there aren't too many restrictions on housing, but a developer friend tells me he can barely make a profit at current prices because of 1) the cost of the land and 2) modern building codes make housing a lot more expensive. You can have cheaper houses if you're willing to give up things like the insulation that forces builders to use 2x6s instead of 2x4s for exterior framing. That NIMBY stuff is mostly a problem for pricing if you want to live in a big city.
    - laughing_man 1y ago
      If you adjust your chart for inflation you see a big peak in 2025 and another in 2022. The trough of the crash matches the historical trend. Yes, the price of housing is crazy. But so is the price of eggs.
      - laughing_man 1y ago
        Eh.. "peak in 2005 and another in 2022"
    - DonsDiscountGas 1y ago
      Yes it was a bubble. (Also a much larger related credit bubble). A big run up followed by a crash. Many companies went under, many people suffered. The fact that prices recovered a decade later doesn't change any of that.
kirito1337 1y ago
It will slow down, wait for it.
blizdiddy 1y ago
Boom and bust capitalism is completely orthogonal to AI as a technology. Capitalists are sociopathic opportunists that exploit every aspect of life, that doesn’t have anything to do with AI. Housing bubbles existed, we still use houses. The dot com bubble existed, we are still on a dot com.
- tenuousemphasis 1y ago
  What makes you think the capitalists won't train a capitalist AI?
ProjectArcturis 1y ago
Stock is down 3% after hours.
- xnx 1y ago
  Taking it all the way back to the price a week ago.
adidoit 1y ago
Amazing how high expectations were that a 56% jump in sales still led to a 3% drop in the stock. It's very clear that the ramp for GPUs continues.
- Drunkfoowl 1y ago
  [dead]
- Ologn 1y ago
  NVDA had a surprise earnings on May 24, 2023, closing at $305 and opening at $385 (before the 10 for 1 split). Pretty much every earnings day since then has been the same - the numbers come out, they beat what they estimated, the stock goes down a little. People have been doom and glooming it every earnings call - you can read the threads here from May 2023, people were saying it was a bubble then, and it's over four times what it was then.
  - DonsDiscountGas 1y ago
    Up 4x in 2 years seems like an indication it is a bubble, not the opposite. There's really no way of knowing when a bubble is going to pop, there's no reason an overvalued stock can't become even more overvalued.
    - utyop22 1y ago
      I think we need to first straighten out the terms. What really is a bubble? In my view, if we want to get strict with this, a bubble is really an enlargement in asset prices that is not backed by fundamentals. Now as it stands, Nvidia's recent growth has been to date backed by fundamentals due to increases in free cash flows. However, its market capitalization is based upon the fact that demand for what they produce continues to rise notwithstanding competition. The problem is, Nvidia's customers who are responsible for their revenue growth are not seeing meaningful ROI and how steep will the barriers to entry remain? Its questionable if Nvidia can maintain existing barriers to entry (let alone making those barriers any steeper) to sustain the market power it enjoys over a long time horizon to justify its present value. Therein lies the problem with Nvidia's valuation. There is also no evidence that shows Nvidia's projects have real options embedded within them. Now of course, lets get real - who is really doing this level of analysis? Very few, and we are seeing this play out with jumps in the stock price with no tangible justification.
andy_ppp 1y ago
I can’t wait for how cheap compute will be during the inevitable AI winter.
- blibble 1y ago
  unfortunately mostly useless 4 bit floating point
  - nicce 1y ago
    How is it useless?
    - cyber_kinetist 1y ago
      If you try to do any sort of scientific calculation (ex. physical simulation), at least 32-bit floats are needed to ensure adequate numerical precision. Ideally 64-bit floats are the best, but FP64 performance in recent GPUs are bad up to the point that you can say they're not supported anymore...
- cuttothechase 1y ago
  Will it work out the second time around? As long as these data centers and their cloud patrons still keep providing those compute options, unlike, the 2000 crash where commodity hardware was widely available and the business use case was comparatively decentralized.
- kingstnap 1y ago
  It's all but inevitable that compute gets cheaper. AI winter -> Datacenters have too much compute to sell -> Compute gets cheaper AI summer -> Hardware companies are incentivized to make better chips-> Compute gets cheaper The second actually is more powerful in the long run. The AI boom has actually made compute very cheap per flop.
FaridIO 1y ago
The idea that the world will ever have enough compute is ridiculous. I'm sure all of this sudden growth will need to be digested at some point, but that won't mean the industry will permanently lose a big chunk of its market cap.
- sheeshkebab 1y ago
  When dot com crashed it was similar - compute use didn’t reduce, far from it, it’s just capex crashed to the ground and took 90% of Nasdaq value with it, for a few years.
  - ivape 1y ago
    Stop comparing to dotcom. There’s a big difference between the internet then and the internet now. Ignoring the astounding nature of the AI tech (dotcom isn’t even in the same ballpark), you also have to consider these two things: 1) We didn’t make the world digital native in that era 2) We didn’t connect the whole world to the internet
    - xenobeb 1y ago
      I agree on the astounding nature of AI but there is also an astounding nature to valuations across the market right now. WMT is a better example than NVDA.
      - aurareturn 1y ago
        WMT - seems like their growth is a bit faster now than historically. That may explain their stock price? https://www.macrotrends.net/stocks/charts/WMT/walmart/revenue https://www.macrotrends.net/stocks/charts/WMT/walmart/revenu...
- boroboro4 1y ago
  Same argument can be somewhat applied to CPUs circa 90s. The growth did stop/stalled in the end. I think the expectation of ever growing compute is not totally crazy. It will come with lower margins eventually though, and more players in the market. It also might get much more moderate, including from hardware limitations. Efficiency wise h200->b200 isn’t as crazy as a100->h100.
interstice 1y ago
Long ago stopped trying to keep on top of GPU releases at home as the gains were too incremental and releases too frequent for my wallet. That trillions of dollars may be spent on this is great news for Nvidia, but seems like a source of incredible quantities of parked inventory and landfill if not managed carefully.
tim333 1y ago
A.I. infrastructure is probably to a large extent a function of stock market valuations. High valuations equal lots of investor money for VCs and big cos to put into what's trendy. I think it's more that than careful calculations of expected return on investment. If there's a market crash it may change, like it did after the dot com crash.

50 points by cuttothechase 1y ago

cuttothechase 1y ago

https://archive.is/I9xom https://archive.is/I9xom

techpineapple 1y ago

Wouldn’t this be a lagging indicator?

laughing_man 1y ago

There seems to be no limit to the size of this bubble.

mocha_nate 1y ago
i really only started hearing about AI bubble this year. with the housing bubble, people were talking about it in 2005 and it took years for it to finally break. maybe AI bubble is the same
- tedsanders 1y ago
  Except the housing bubble wasn't actually a bubble. Housing prices today are much higher than in 2007. Based on realized results, the mispricing wasn't the peak of the housing bubble but the trough of the crash. With the benefit of hindsight, the peak actually undervalued how expensive housing would get. (Speaking about the US market in aggregate. Not other countries, nor localities like Las Vegas where the case for a bubble is stronger.)
  - klipt 1y ago
    The price of housing is ultimately a political choice. If voters choose to restrict supply of housing through zoning and other laws, prices can be pushed up hugely.
    - laughing_man 1y ago
      I doubt zoning has any real effect. Henry George realized in the 19th century that if you increase the money supply most of that money goes into driving up the cost of real estate. And the government has been printing money like crazy for decades now. Where I live there aren't too many restrictions on housing, but a developer friend tells me he can barely make a profit at current prices because of 1) the cost of the land and 2) modern building codes make housing a lot more expensive. You can have cheaper houses if you're willing to give up things like the insulation that forces builders to use 2x6s instead of 2x4s for exterior framing. That NIMBY stuff is mostly a problem for pricing if you want to live in a big city.
  - laughing_man 1y ago
    If you adjust your chart for inflation you see a big peak in 2025 and another in 2022. The trough of the crash matches the historical trend. Yes, the price of housing is crazy. But so is the price of eggs.
    - laughing_man 1y ago
      Eh.. "peak in 2005 and another in 2022"
  - DonsDiscountGas 1y ago
    Yes it was a bubble. (Also a much larger related credit bubble). A big run up followed by a crash. Many companies went under, many people suffered. The fact that prices recovered a decade later doesn't change any of that.

kirito1337 1y ago

It will slow down, wait for it.

blizdiddy 1y ago

Boom and bust capitalism is completely orthogonal to AI as a technology. Capitalists are sociopathic opportunists that exploit every aspect of life, that doesn’t have anything to do with AI. Housing bubbles existed, we still use houses. The dot com bubble existed, we are still on a dot com.

tenuousemphasis 1y ago
What makes you think the capitalists won't train a capitalist AI?

ProjectArcturis 1y ago

Stock is down 3% after hours.

xnx 1y ago
Taking it all the way back to the price a week ago.

adidoit 1y ago

Amazing how high expectations were that a 56% jump in sales still led to a 3% drop in the stock. It's very clear that the ramp for GPUs continues.

Drunkfoowl 1y ago
[dead]
Ologn 1y ago
NVDA had a surprise earnings on May 24, 2023, closing at $305 and opening at $385 (before the 10 for 1 split). Pretty much every earnings day since then has been the same - the numbers come out, they beat what they estimated, the stock goes down a little. People have been doom and glooming it every earnings call - you can read the threads here from May 2023, people were saying it was a bubble then, and it's over four times what it was then.
- DonsDiscountGas 1y ago
  Up 4x in 2 years seems like an indication it is a bubble, not the opposite. There's really no way of knowing when a bubble is going to pop, there's no reason an overvalued stock can't become even more overvalued.
  - utyop22 1y ago
    I think we need to first straighten out the terms. What really is a bubble? In my view, if we want to get strict with this, a bubble is really an enlargement in asset prices that is not backed by fundamentals. Now as it stands, Nvidia's recent growth has been to date backed by fundamentals due to increases in free cash flows. However, its market capitalization is based upon the fact that demand for what they produce continues to rise notwithstanding competition. The problem is, Nvidia's customers who are responsible for their revenue growth are not seeing meaningful ROI and how steep will the barriers to entry remain? Its questionable if Nvidia can maintain existing barriers to entry (let alone making those barriers any steeper) to sustain the market power it enjoys over a long time horizon to justify its present value. Therein lies the problem with Nvidia's valuation. There is also no evidence that shows Nvidia's projects have real options embedded within them. Now of course, lets get real - who is really doing this level of analysis? Very few, and we are seeing this play out with jumps in the stock price with no tangible justification.

andy_ppp 1y ago

I can’t wait for how cheap compute will be during the inevitable AI winter.

blibble 1y ago
unfortunately mostly useless 4 bit floating point
- nicce 1y ago
  How is it useless?
  - cyber_kinetist 1y ago
    If you try to do any sort of scientific calculation (ex. physical simulation), at least 32-bit floats are needed to ensure adequate numerical precision. Ideally 64-bit floats are the best, but FP64 performance in recent GPUs are bad up to the point that you can say they're not supported anymore...
cuttothechase 1y ago
Will it work out the second time around? As long as these data centers and their cloud patrons still keep providing those compute options, unlike, the 2000 crash where commodity hardware was widely available and the business use case was comparatively decentralized.
kingstnap 1y ago
It's all but inevitable that compute gets cheaper. AI winter -> Datacenters have too much compute to sell -> Compute gets cheaper AI summer -> Hardware companies are incentivized to make better chips-> Compute gets cheaper The second actually is more powerful in the long run. The AI boom has actually made compute very cheap per flop.

FaridIO 1y ago

The idea that the world will ever have enough compute is ridiculous. I'm sure all of this sudden growth will need to be digested at some point, but that won't mean the industry will permanently lose a big chunk of its market cap.

sheeshkebab 1y ago
When dot com crashed it was similar - compute use didn’t reduce, far from it, it’s just capex crashed to the ground and took 90% of Nasdaq value with it, for a few years.
- ivape 1y ago
  Stop comparing to dotcom. There’s a big difference between the internet then and the internet now. Ignoring the astounding nature of the AI tech (dotcom isn’t even in the same ballpark), you also have to consider these two things: 1) We didn’t make the world digital native in that era 2) We didn’t connect the whole world to the internet
  - xenobeb 1y ago
    I agree on the astounding nature of AI but there is also an astounding nature to valuations across the market right now. WMT is a better example than NVDA.
    - aurareturn 1y ago
      WMT - seems like their growth is a bit faster now than historically. That may explain their stock price? https://www.macrotrends.net/stocks/charts/WMT/walmart/revenue https://www.macrotrends.net/stocks/charts/WMT/walmart/revenu...
boroboro4 1y ago
Same argument can be somewhat applied to CPUs circa 90s. The growth did stop/stalled in the end. I think the expectation of ever growing compute is not totally crazy. It will come with lower margins eventually though, and more players in the market. It also might get much more moderate, including from hardware limitations. Efficiency wise h200->b200 isn’t as crazy as a100->h100.

interstice 1y ago

Long ago stopped trying to keep on top of GPU releases at home as the gains were too incremental and releases too frequent for my wallet. That trillions of dollars may be spent on this is great news for Nvidia, but seems like a source of incredible quantities of parked inventory and landfill if not managed carefully.

tim333 1y ago

A.I. infrastructure is probably to a large extent a function of stock market valuations. High valuations equal lots of investor money for VCs and big cos to put into what's trendy. I think it's more that than careful calculations of expected return on investment. If there's a market crash it may change, like it did after the dot com crash.