Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Nvidia Stock Crash Prediction

entropicthoughts.com

Post reply on HN
Print view View original

361–370 of 385 posts

Re: Nvidia Stock Crash Prediction

#361

Post by seanhunter »

zozbot234 wrote: post #347
seanhunter wrote: post #341

I would be wary of taking analysis like this website at face value unless you know enough about quant finance to check some of the working for yourself. Just a skim shows a few statements that are questionable at best. Eg > the theory of unbiased random walks assumes constant volatility throughout the year No. I’m pretty sure it doesn’t. If you assume a brownian motion with a constant volatility as your stochastic pr…

AIUI, there's nothing wrong per se with treating the "market opinion" of the volatility as a subjective probability, since that's effectively what it becomes given sensible no-arbitrage constraints. Just keep in mind that "bad" states of the world will be heavily overweighted in the resulting subjective expectation, for the risk-adjustment reasons mentioned in the OP.

Definitely. As someone once explained it to me, you always overpay for insurance and you're right (from a marginal utility/risk of ruin standpoint) to do so. That's why the vol skew is pretty much always such that crash puts are more expensive than oom calls.

Re: Nvidia Stock Crash Prediction

#362

Post by thworp »

aswegs8 wrote: post #162
fooker wrote: post #146

Earlier quoted context omitted.

I’ll be so happy to buy a EOL H100! But no, there’s none to be found, it is a 4 year, two generations old machine at this point and you can’t buy one used at a rate cheaper than new.

Not sure why this "GPUs obsolete after 3 years" gets thrown around all the time. Sounds completely nonsensical.

A toy example: NeoCloud Inc builds a new datacenter full of the new H800 GPUs. It rents out a rack of them for $10/minute while paying $6/minute for electricity, interest, loan repayment, rent and staff.

Two years later, H900 is released for a similar price but it performs twice as many TFlOps/Watt. Now any datacenter using H900 can offer the same performance as NeoCloud Inc at $5/month, taking all their customers.

[all costs reduced to $/minute to make a point]

Re: Nvidia Stock Crash Prediction

#363

Post by kqr »

seanhunter wrote: post #341

I would be wary of taking analysis like this website at face value unless you know enough about quant finance to check some of the working for yourself. Just a skim shows a few statements that are questionable at best. Eg > the theory of unbiased random walks assumes constant volatility throughout the year No. I’m pretty sure it doesn’t. If you assume a brownian motion with a constant volatility as your stochastic pr…

Author here. Thanks for the well-reasoned and well-sourced criticism! I'm just a layman. I admit to all misunderstandings and am happy to receive links and words to search for to learn more.

Re: Nvidia Stock Crash Prediction

#364

Post by seanhunter »

kqr wrote: post #363
seanhunter wrote: post #341

I would be wary of taking analysis like this website at face value unless you know enough about quant finance to check some of the working for yourself. Just a skim shows a few statements that are questionable at best. Eg > the theory of unbiased random walks assumes constant volatility throughout the year No. I’m pretty sure it doesn’t. If you assume a brownian motion with a constant volatility as your stochastic pr…

Author here. Thanks for the well-reasoned and well-sourced criticism! I'm just a layman. I admit to all misunderstandings and am happy to receive links and words to search for to learn more.

It’s a cool blog post so I’m making those observations from what I hope you will see as a helpful place. It’s been a long time since I was in the industry, and the sources you’re looking at (eg Shreve) are all great. One thing you might want to check out as well is “The Volatility Surface: A Practitioner’s Guide” by Jim Gatherall. I remember really enjoying it back when I worked in Equity Exotics and it was very highly regarded by the people I really respected in the financial maths stakes.

Re: Nvidia Stock Crash Prediction

#365

Post by notyourwork »

onion2k wrote: post #284
notyourwork wrote: post #212

Earlier quoted context omitted.

I assume the reference was AI use cases are not profitable. Those companies are subsidizing and OpenAI/grok are burning money.

Google, Amazon, and Microsoft do a lot of things that aren't profitable in themselves. There is no reason to believe a company will kill a product line just because it makes a loss. There are plenty of other reasons to keep it running.

I didn't imply anything about what big-tech would do.

Re: Nvidia Stock Crash Prediction

#366

Post by tuckerman »

zozbot234 wrote: post #276
tuckerman wrote: post #259

Earlier quoted context omitted.

I agree that there is hyperbole thrown around a lot here and its possible to still use some hardware for a long time or to sell it and recover some cost but my experience in planning compute at large companies is that spending money on hardware and upgrading can often result in saving money long term. Even assuming your compute demands stay fixed, its possible that a future generation of accelerator will be sufficien…

Sure, but I don't think most people here are objecting to the obvious "3 years is enough for enterprise GPUs to become totally obsolete for cutting-edge workloads" point. They're just objecting to the rather bizarre notion that the hardware itself might physically break in that timeframe. Now, it would be one thing if that notion was supported by actual reliability studies drawn from that same environment - like we s…

I agree that is a strange notion that would require some evidence and I see it in some other threads but looking at the parent comments going up it seems people are discussing economic usefulness so that is what I'm responding to.

Re: Nvidia Stock Crash Prediction

#367

Post by kelseyfrog »

agentcoops wrote: post #128
_fat_santa wrote: post #11

This article goes more into the technical analysis of the stock rather than the underlying business fundamentals that would lead to a stock dump. My 30k ft view is that the stock will inevitably slide as AI datacenter spending goes down. Right now Nvidia is flying high because datacenters are breaking ground everywhere but eventually that will come to an end as the supply of compute goes up. The counterargument to th…

I hear your argument, but short of major algorithmic breakthroughs I am not convinced the global demand for GPUs will drop any time soon. Of course I could easily be wrong, but regardless I think the most predictable cause for a drop in the NVIDIA price would be that the CHIPS act/recent decisions by the CCP leads a Chinese firm to bring to market a CUDA compatible and reliable GPU at a fraction of the cost. It shoul…

Algorithmic breakthroughs (increases in efficiency) risk Jevons Paradox. More efficient processes make deploying them even more cost effective and increases demand.

Re: Nvidia Stock Crash Prediction

#370

Post by DrProtic »

reflexe wrote: post #142

According to nvidia’s 2025 annual report [1], 34% of their sales for 2025 comes from just 3 customers. Additionally, they mentioned that customers can cancel purchases with little to no penalty and notice [2]. This is not unique for hardware companies, but to think that all it takes is just one company to get their sales down by 12% (14b$). To cut to the point, my guess is that nvidia is not sustainable, and at some…

Or they might build another factory and fulfill all the orders they were previously unable to fulfill and increase their share even more.

Or US administration suddenly allows exports of top-tier to China and they get more whales on their order book.

It's all guess work, that's why their share price is high.

Post reply on HN