Nvidia Stock Crash Prediction

At least with crypto mining this was the case. Hardware from 6 months ago is useless ewaste because the new generation is more power efficient. All depends on how expensive the hardware is vs the cost of power.

I think the way to think about the AI bubble is that we're somewhere in 97-99 right now, heading toward the dotcom crash. The dotcom crash didn't kill the web, it kept growing in the decades that followed, influencing society more and more. But the era where tons of investments were uncritically thrown at anything to do with the web ended with a bang.

When the AI bubble bursts, it won't stop the development of AI as a technology. Or its impact on society. But it will end the era of uncritically throwing investments at anyone that works "AI" into their pitch deck. And so too will it end the era of Nvidia selling pickaxes to the miners and being able to reach soaring heights of profitability born on wings of pretty much all investment capital in the world at the moment.

Predicting any stock will crash, be it from a technical analysis or from looking at fundamentals, is a fool's game. As Keynes allegedly said, the market can stay irrational longer than you can remain solvent.

The poster child for this is Tesla. Nothing fundamental justifies Tesla's valuation.

IMHO the only rational way to look at the future of AI and the companies from profit from it is to look at geopolitics.

The market seems to have decided there's going to be one winner of the AI race. I actually don't think that'll be OpenAI. I think it'll be Google or Nvidia of the companies currently in the race. But I also don't think it'll be either of them.

The magic of software is that it is infinitely reproducible. That makes it difficult to build a wall around it. Microsoft, Facebook, Apple and Google have successfully built moats around their software very successfully in spite of this. Google's big advantage in the AI race is their ability to build and manage data centers and that they'll probably end up relying on their own hardware rather than NVidia.

I think China will be the AI winner or they'll make sure there is no winner. It's simply too important to them. For me, DeepSeek was a shot across the bow that they were going to commoditize these models.

The US blocked the export of the best lithography machines AND the best chips to China. IMHO this was a mistake. Being unable to import chips meant Chinese companies had no choice but to make their own. This created a captive market for China recreating EUV technology. Chinese companies have no choice but to buy Chinese chips.

The Chinese government has the patience and infrastructure for recreating ASML's technology and it's an issue of national security. And really all it takes is hiring a few key people to recreate that technology. So Western governments and analysts who said China will take 20+ years to catch up (if they ever do) simply don't understand China or the market they're talking about.

They sound exactly like post-WW2 generals and politicians who thought the USSR would take 20+ years to copy the atomic bomb. It took 4 years. And hydrogen bombs came even quicker.

There's a story that should get more attention: China has reportedly refused a deal for NVidia's latest chips [1]. If true, why do you think they're doing that? Because they don't want to be reliant on foreign chips. They're going to make their own.

[1]: https://ca.finance.yahoo.com/news/nvidia-stock-slides-china-...

Do you think it's odd you only listed companies with already existing revenue streams and not companies that started with and only have generative algos as their product?

For any "click here and type into a box" job for which you'd hire a low-skilled worker and give them an SOP to follow, you can have an LLM-ish tool do it.

And probably for the slightly more skilled email jobs that have infiltrated nearly all companies too.

Is that productive work? Well if people are getting paid, often a multiple of minimum wage, then it's productive-seeming enough.