The impact of competition and DeepSeek on Nvidia • Hacker News Board

Re: The impact of competition and DeepSeek on Nvidia

#51

Post by flowerlad » Mon, Jan 27, 2025, 1:53 AM UTC

daveguy wrote: post #49

breadwinner wrote: post #37

Earlier quoted context omitted.

AMD P/E ratio is 109, NVDA is 56. Which stock is overvalued?

That is extraordinarily simplistic. If NVDA is slowing and AMD has gains to realize compared to NVDA, then the 10x difference in market cap would imply that AMD is the better buy. Which is why I am long in AMD. You can't just look at the current P/E delta. You have to look at expectations of one vs the other. AMD gaining 2x over NVDA means they are approximately equivalently valued. If there are unrealized AI related…

The point is, it should not be taken for granted that NVDA is overvalued. Their P/E is low enough that if you’re going to state that they are overvalued you have to make the case. The article while well written, fails to make the case because it has a flaw: it assumes that addressing just one of Nvidia’s advantages is enough to make it crash and that’s just not true.

Re: The impact of competition and DeepSeek on Nvidia

#52

Post by lxgr » Mon, Jan 27, 2025, 1:59 AM UTC

breadwinner wrote: post #37

eigenvalue wrote: post #36

Earlier quoted context omitted.

Exactly. You just need to see a slight deceleration in projected revenue growth (which has been running 120%+ YoY recently) and some downward pressure on gross margins, and maybe even just some market share loss, and the stock could easily fall 25% from that.

AMD P/E ratio is 109, NVDA is 56. Which stock is overvalued?

On the other hand, getting a bigger slice of the existing cake as a smaller challenger can be easier than baking a bigger cake as the incumbent.

Re: The impact of competition and DeepSeek on Nvidia

#53

Post by lxgr » Mon, Jan 27, 2025, 2:00 AM UTC

flowerlad wrote: post #51

daveguy wrote: post #49

Earlier quoted context omitted.

That is extraordinarily simplistic. If NVDA is slowing and AMD has gains to realize compared to NVDA, then the 10x difference in market cap would imply that AMD is the better buy. Which is why I am long in AMD. You can't just look at the current P/E delta. You have to look at expectations of one vs the other. AMD gaining 2x over NVDA means they are approximately equivalently valued. If there are unrealized AI related…

The point is, it should not be taken for granted that NVDA is overvalued. Their P/E is low enough that if you’re going to state that they are overvalued you have to make the case. The article while well written, fails to make the case because it has a flaw: it assumes that addressing just one of Nvidia’s advantages is enough to make it crash and that’s just not true.

If investing were as simple as looking at the P/E, all P/Es would already be at 15-20, wouldn't they?

Re: The impact of competition and DeepSeek on Nvidia

#54

Post by varelse » Mon, Jan 27, 2025, 2:03 AM UTC

breadwinner wrote: post #37

eigenvalue wrote: post #36

Earlier quoted context omitted.

Exactly. You just need to see a slight deceleration in projected revenue growth (which has been running 120%+ YoY recently) and some downward pressure on gross margins, and maybe even just some market share loss, and the stock could easily fall 25% from that.

AMD P/E ratio is 109, NVDA is 56. Which stock is overvalued?

[dead]

Re: The impact of competition and DeepSeek on Nvidia

#55

Post by lxgr » Mon, Jan 27, 2025, 2:06 AM UTC

snowmaker wrote: post #18

This is an excellent article, basically a patio11 / matt levine level breakdown of what's happening with the GPU market.

Couldn't agree more! If this is the byproduct, these must be some optimized Youtube transcripts :)

Re: The impact of competition and DeepSeek on Nvidia

#56

Post by metadat » Mon, Jan 27, 2025, 2:10 AM UTC

> Another very smart thing they did is to use what is known as a Mixture-of-Experts (MOE) Transformer architecture, but with key innovations around load balancing. As you might know, the size or capacity of an AI model is often measured in terms of the number of parameters the model contains. A parameter is just a number that stores some attribute of the model; either the "weight" or importance a particular artificial neuron has relative to another one, or the importance of a particular token depending on its context (in the "attention mechanism").

Has a wide-scale model analysis been performed inspecting the parameters and their weights for all popular open / available models yet? The impact and effects of disclosed inbound data and tuning parameters on individual vector tokens will prove highly informative and clarifying.

Such analysis will undoubtedly help semi-literate AI folks level up and bridge any gaps.

Re: The impact of competition and DeepSeek on Nvidia

#57

Post by naveen99 » Mon, Jan 27, 2025, 2:11 AM UTC

Deepseek iOS app makes TikTok ban pointless.

Re: The impact of competition and DeepSeek on Nvidia

#58

Post by flowerlad » Mon, Jan 27, 2025, 2:12 AM UTC

lxgr wrote: post #53

flowerlad wrote: post #51

Earlier quoted context omitted.

The point is, it should not be taken for granted that NVDA is overvalued. Their P/E is low enough that if you’re going to state that they are overvalued you have to make the case. The article while well written, fails to make the case because it has a flaw: it assumes that addressing just one of Nvidia’s advantages is enough to make it crash and that’s just not true.

If investing were as simple as looking at the P/E, all P/Es would already be at 15-20, wouldn't they?

Not saying it is as simple as looking at P/E

Re: The impact of competition and DeepSeek on Nvidia

#59

Post by lxgr » Mon, Jan 27, 2025, 2:25 AM UTC

grajaganDev wrote: post #39

breadwinner wrote: post #26

Great article but it seems to have a fatal flaw. As pointed out in the article, Nvidia has several advantages including: - Better Linux drivers than AMD - CUDA - pytorch is optimized for Nvidia - High-speed interconnect Each of the advantages is under attack: - George Hotz is making better drivers for AMD - MLX, Triton, JAX: Higher level abstractions that compile down to CUDA - Cerbras and Groq solve the interconnect…

There is not enough water (to cool data centers) to justify NVDA's current valuation. The same is true of electricity - neither nuclear power nor fusion will not be online anytime soon.

Those are definitely not the limiting factors here.

Not nearly all data centers are water cooled, and there is this amazing technology that can convert sunlight into electricity in a relatively straightforward way.

AI workloads (at least training) are just about as geographically distributeable as it gets due to not being very latency-sensitive, and even if you can't obtain sufficient grid interconnection or buffer storage, you can always leave them idle at night.

Re: The impact of competition and DeepSeek on Nvidia

#60

Post by lxgr » Mon, Jan 27, 2025, 2:26 AM UTC

simonw wrote: post #29

gnlrtntv wrote: post #27

> While Apple's focus seems somewhat orthogonal to these other players in terms of its mobile-first, consumer oriented, "edge compute" focus, if it ends up spending enough money on its new contract with OpenAI to provide AI services to iPhone users, you have to imagine that they have teams looking into making their own custom silicon for inference/training This is already happening today. Most of the new LLM features…

"if it ends up spending enough money on its new contract with OpenAI to provide AI services to iPhone users" John Gruber says neither Apple nor OpenAI are paying for that deal: https://daringfireball.net/linked/2024/06/13/gurman-openai-a...

Mark Gurman (from Bloomberg) is saying that.