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look after the bubble bursts, things will go back to-oh hang on a second.
there's another bub-, oh wait a minute, I think I see another...
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Capitalism really is just farting in the bathtub.
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Rich people farting in a bathtub
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haha, uhhhhmmmm.
I really like the description.
I'm not sure it's an apt analogy, but the description is undeniably great and I will be using it some form in the future.
oh the bubbles! haha, sorry, I'm in a couple different threads right now.
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OK, here goes nothing, going to receive a roasting... TSMC is booked out to high heaven, Nvidia is completely in control of anything AI with no other company coming close to touching them, and at the end of the day, this is all but 1 month in the economy while most P/E for your average business even is near 15 or 20, corresponding to about 200 months. Cisco didn't have a moat worth a dime and households didn't even have always-on Internet back then, while Nvidia gets to basically set their price. Sure, AI isn't turning out to be a great source of profit for AI providers, but Nvidia sells the shovels, not the gold or stakes of land.
Sure 11% is excessive, but I can't see it drop like a rock any time soon. Because even if AI bursts like a bubble they are still the best at computer graphics by some margin as well, they'll still be the best at parallel computation. And if that fails, they're the best at making games do things, they know how to build computers and mobile devices, etc., etc. They made the Nintendo Switch for crying out loud and an RTX in my PC that I haven't used for anything AI in ages. They'll be fine.
And one other thing, their P/E ratio was well above 100 a bit more than a year ago. It's at like 60 now? And the market cap doesn't really count for anything, I mean VW was the most valuable company in the world during a short squeeze. Cisco's P/E was apparently 200 at one point.
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I think it has more to do with all that evaluation being propped up by the idea that AI will be massively profitable. All the things you mention were true five years ago when their evaluation was less ridiculous. When Nvidia's stock evaluation falls they'll be fine. I think the rest of the market is going to take a big hit and I expect a recession is inevitable.
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Sure 11% is excessive, but I can’t see it drop like a rock any time soon.
How about when the AI pyrite rush stops? That'll mean a hell of a lot of shovels no longer being sold. That combined with wall street expectations of never-ending growth will mean a dramatic drop when revenue is a fraction of what it was just a quarter or so ago. You've already pointed out that AI isn't turning out to be a great source of profit, so it's clearly not sustainable. All other avenues of business you mention pale in comparison to the business that AI hype brought in.
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Totally agree with your assessment.
It's also important to remember that, even if AI/ML don't have a killer consumer application right now, those systems are really powerful for recommending targeted advertisements. That's why all the big tech companies are throwing money at nvidia to build out more and bigger datacenters.
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I would guess that's also why they are looking at power reactors. From their point of view this business can only be profitable by squeezing costs and investing in energy generation is one possible avenue to do that.
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I don’t think the gaming market could hold them in their position if AI crashes, but they are ahead of the game on ARM as seen by the success of the Nintendo Switch.
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Holy shit we are so fucked.
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That’s how much humanity, via the market, is willing to dedicate to AI.
It’s probably an overshoot, but it makes sense given the economic value of AI.
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Wait, have we solved the $600B problem already, or I shouldn't ask questions and shovel the money?
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It ain't named after a deadly sin for nothing.
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Did the person who posted this on mastodon not read any of the comments on wsb explaining why this is a stupid comparison?
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Where's your /s
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Look you guys need to stop basing your entire worldview on tweets and opposition to people you don't like.
Nvidia has spent a very long time building out a concrete advantage when it comes to AI. This advantage is not only in their hardware, but in the tooling they built out. It'll take years before another competitor becomes truly viable, and NVIDIA isn't just standing still in the interim.
You're all also way too bearish on AI. I feel like you just have a blind hatred of "tech bros" and that gives you tunnel vision. AI isn't crypto, and it neither starts nor ends with Chatbots. While aspects of it are over-hyped, there are still many use cases where it'll be extremely relevant.
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The problem isn't the potential usefulness of AI, it is the fact that everything related to AI is being massively overvalued resulting in a 'AI bubble'. It is similar to the dot.com bubble. Doesn't mean AI will disappear when the bubble burst, just that the valur of software and services with AI in them will normalize (like how the internet didn't disappear with the dot.com crash, just the valuation of software and services using the internet came back to what could be considered normal)
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AI is not generating nearly enough revenue from the actual end users at the moment. Companies are betting on things being somehow different in the future, but my bet is price hikes and enshittification hitting the AI services when VC money starts running out.
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