The people writing market commentary are simply making it up. The news about DeepSeek is not new and doesn't reduce the value of ASML. People are selling now because they are scared because the number went down.
Nvidia’s $589B DeepSeek rout
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Re: Nvidia’s $589B DeepSeek rout
#32Well this is very bad for the private AI companies but Big Tech will be fine, especially Meta and Apple.
Everyone else who over-leveraged into the private AI companies (Anthropic, OpenAI) are going to have their valuations under scrutiny.
Re: Nvidia’s $589B DeepSeek rout
#33Earlier quoted context omitted.
Nvidia is way too overvalued regardless of deepseek or the success of AI. This is just some correction (not even too big even considering the current bubble), these traders are not stupid.
NVIDIA has a P/E ratio of 56 that’s double that of the S&P 500 but half that of AMD and the same one as Meta. And whether it’s overvalued or not isn’t relevant that selling a stock because the product the company produces is now even more effective is mind bogglingly stupid.
Well the price has a built in presumption that the earnings will keep growing. That's why PER is not that relevant for them, it's been over 50-70 since forever, but the stock went up 10x, which means earnings went up as well. DeepSeek might be good for their business overall, but it might mean earnings will not continue growing exponentially like they have been for the past two years. So it's time to bail.
You shouldn't underestimate the fact that a large amount of these trades are on margin. Sometimes you can't wait it out because you'll get margin called and if you can't pony up additional cash you're basically getting caught with your pants down.
Disclaimer: I am not a trader, so could be way off
Re: Nvidia’s $589B DeepSeek rout
#34Good time to buy then, I don’t understand how stupid some traders can be. A more efficient model is better for NVIDIA not worse. More compute is still better given the same model. And as more efficient models proliferate it means more edge computing which means more customers with lower negotiating power than Meta and Google… This is like thinking that if people need to dig only 1 day instead of an entire month to ge…
You are right, it is a Jevon's paradox thing. We were already going to spend all the gigawatts on AI, it is just more AI.
Re: Nvidia’s $589B DeepSeek rout
#35Good time to buy then, I don’t understand how stupid some traders can be. A more efficient model is better for NVIDIA not worse. More compute is still better given the same model. And as more efficient models proliferate it means more edge computing which means more customers with lower negotiating power than Meta and Google… This is like thinking that if people need to dig only 1 day instead of an entire month to ge…
Nvidia is way too overvalued regardless of deepseek or the success of AI. This is just some correction (not even too big even considering the current bubble), these traders are not stupid.
agreed but ASML has been chronically undervalued forever.
Re: Nvidia’s $589B DeepSeek rout
#36Nvidia -13% in Frankfurt stock market just now. Valuations of private unicorns like OpenAi and Anthropic must be in free fall. DeepSeek spends $6 million in old H800 hardware to develop open source model that overtakes ChatGPT. AI gets better, but profit margins sink with strong competition. Chinese AI startup DeepSeek overtakes ChatGPT on Apple App Store https://news.ycombinator.com/item?id=42839656 Edit: Nvidia now…
Not a good day for those who decided to hold 3x Nvidia ETPs - down 40% earlier.
Re: Nvidia’s $589B DeepSeek rout
#37Earlier quoted context omitted.
NVIDIA has a P/E ratio of 56 that’s double that of the S&P 500 but half that of AMD and the same one as Meta. And whether it’s overvalued or not isn’t relevant that selling a stock because the product the company produces is now even more effective is mind bogglingly stupid.
It's arguable how good a strategy it is to check against other P/E. During the tech bubble people would say X is cheap, because Y is trading at 100P/E instead of 200
Again that may reasonable but it’s a completely different argument. Whether there is a bubble or not and whether NVDA is overvalued is irrelevant to the subject at hand.
If it’s cheaper to train models it means far more customers that will try their luck.
If you reduce training requirement from a 100,000 GPUs to a 1000 you’ve now opened the market to 1000’s and 1000’s of potential players instead of like the 10 that can afford dumping so much money into a compute cluster.
Re: Nvidia’s $589B DeepSeek rout
#38Good time to buy then, I don’t understand how stupid some traders can be. A more efficient model is better for NVIDIA not worse. More compute is still better given the same model. And as more efficient models proliferate it means more edge computing which means more customers with lower negotiating power than Meta and Google… This is like thinking that if people need to dig only 1 day instead of an entire month to ge…
While everything you say may be true, this shows a fundamental misunderstanding about how the modern stock market functions. How much value a company creates is at best tangential and often completely orthogonal to how much the stock is worth. The stock market has always been a Keynesian beauty contest, but in the past few decades, strongly shaped and morphed by attention economies. A good example of this is DJT, a company which functionally doesn't do much anything, but in the last year has traded at wildly differing prices. P/E, EBITDA, etc, are all useless metrics in trying to explain this phenomenon.
In other words, NVIDIA is in the red not because the company is suddenly doing worse, but because traders think other traders think it will trade down. That is a self fulfilling prophecy, but only so long as there is sufficient attention to drive that. The same works the other way around as well, so long as there is sufficient attention to drive the AI hype train upwards, related stocks will do well as well.
Re: Nvidia’s $589B DeepSeek rout
#39Good time to buy then, I don’t understand how stupid some traders can be. A more efficient model is better for NVIDIA not worse. More compute is still better given the same model. And as more efficient models proliferate it means more edge computing which means more customers with lower negotiating power than Meta and Google… This is like thinking that if people need to dig only 1 day instead of an entire month to ge…
NVDA is a totally manipulated stock. The company beat earnings in the last three quarters and the stock dropped 15% to 20% immediately after the results release. Every single time...
What do you think is going on here? Why is it dropping?
Re: Nvidia’s $589B DeepSeek rout
#40The parallels with the dotcom bubble are clear... Tech is magical. Tech becomes cheap/free. Stock holders panic.
For some time it's been clear that there's an AI bubble and this may be what finally pops it.