This insanity was going to break at some point. Now hopefully these trillions of dollars of losses might finally allow the price of old DDR4 memory I've been trying to acquire to finally recover.
Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
21–30 of 92 posts
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#22Earlier quoted context omitted.
wall street analysts are starting to realise that software companies shouldnt trade on a P/E of 300. DocuSign is currently valued at 30 times its annual earnings. Adobe is currently 16. Amazon is 28 -- has been as high as 50 recently. NVDA is 44. Investors are basically starting to realise that enterprise are not going to subscribe to software like DocuSign for 50 years. They'll probably just move to odoo or zohosign…
> software companies shouldnt trade on a P/E of 300 You are playing pretty fast and loose with your definition of a "software company" when you include Amazon and NVIDIA in your list. Amazon is many things but it is not a "software company" and neither is "NVIDIA".
50% of amazon operating profit is from AWS. NVIDIA's GPUs aren't really that much better than AMD if it weren't for CUDA.
Software company is a pretty good description for both.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#23Amazon missed earnings and promptly doubled down on AI spending: https://finance.yahoo.com/news/amazon-plans-200b-ai-spending... It is encouraging to see that investors are punishing what is the greatest misallocation of capital since the dotcom bubble. Investors have figured out that AI is limited to probabilistic and annoying chatbots that are for entertainment and for looking up trivia questions.
Oh boy, are you going to be in for a rude awakening. Might I ask what is your exposure? Because this does not line up with what I am witnessing day to day at all. This type of commentary reminds me of the people during the dot com boom who were adamant that e-commerce was all film flam and would never take off. Consider that it is possible that both (1) we are in an investment bubble and (2) we are underestimating th…
By your logic the only way to achieve number 2 is to keep pumping number 1.
This type of commentary reminds of people propping up these LLM MLMs.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#24Amazon missed earnings and promptly doubled down on AI spending: https://finance.yahoo.com/news/amazon-plans-200b-ai-spending... It is encouraging to see that investors are punishing what is the greatest misallocation of capital since the dotcom bubble. Investors have figured out that AI is limited to probabilistic and annoying chatbots that are for entertainment and for looking up trivia questions.
You’ll get downvoted for your second statement. I think investors are struggling to see how AI turns into more money for consumers if it. It’s one thing to exclaim how your productivity is up, but does that translate into more profit and larger customer base if you’re a business? I very much doubt consumers will pay more than dollars a month for an LLM and I also very much doubt the ad market can grow large enough to…
Many people are spending significantly more time every day engaging with AI chatbots than they spend engaging with Google, and Google is one of the most valuable companies in the world.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#25Question: does Amazon's retail business matter for analysts at all? It drives the majority of revenue for the company but a much, much smaller amount of profit. Does Wall Street care about Amazon's core business one iota?
Big revenue + small margins in a stable business, IMO, is a massive liability for the bottom line; any downturn in business and that becomes big revenue + big losses. Even if cloud is making money, it can wipe a lot of that out. From the point of view of running an enterprise that lasts, though, diversification is important. Financially diversification is probably, in general, bad for EPS. But if you want to run a la…
That depends on the business. People are not going to stop eating so small margins in the grocery business isn't a negative - the revenue is mostly recurring and recession proof (some people might switch from buying meat to rice+beans, but other people are going to stop eating out and so it balances).
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#26Amazon missed earnings and promptly doubled down on AI spending: https://finance.yahoo.com/news/amazon-plans-200b-ai-spending... It is encouraging to see that investors are punishing what is the greatest misallocation of capital since the dotcom bubble. Investors have figured out that AI is limited to probabilistic and annoying chatbots that are for entertainment and for looking up trivia questions.
Oh boy, are you going to be in for a rude awakening. Might I ask what is your exposure? Because this does not line up with what I am witnessing day to day at all. This type of commentary reminds me of the people during the dot com boom who were adamant that e-commerce was all film flam and would never take off. Consider that it is possible that both (1) we are in an investment bubble and (2) we are underestimating th…
In what way is the long term impact of LLMs being underestimated? If anything, it seems that it has been overestimated in the past years and that something other than LLMs will be needed to reach the original scaled LLM hope of AGI.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#27Question: does Amazon's retail business matter for analysts at all? It drives the majority of revenue for the company but a much, much smaller amount of profit. Does Wall Street care about Amazon's core business one iota?
The margins on tech/cloud are just so astronomically higher than retail. Places like Walmart or Costco are fighting for IMO AWS should be spun out as a separate company.
It doesn’t help that now other potential growth markets for AWS, like the EU, now are getting pushed to have more and more data sovereignty due to the administrations antipathy towards allies. Musk can whine all he wants about the EU, but that’s like complaining about customers that don’t want to buy your products instead of building a good product they trust and want to buy.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#28Question: does Amazon's retail business matter for analysts at all? It drives the majority of revenue for the company but a much, much smaller amount of profit. Does Wall Street care about Amazon's core business one iota?
The margins on tech/cloud are just so astronomically higher than retail. Places like Walmart or Costco are fighting for IMO AWS should be spun out as a separate company.
This makes me wonder if Amazon the retailer requires having access to AWS services “at cost” in order to be profitable. If AWS was spun out completely, would Amazon proper be able to afford their AWS bill of AWS had a profit margin on it.
I’m sure Amazon.com would be fine, but it would take a chunk out of their margins. I’m also sure that their X% ownership of the spun out AWS would cover the difference.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#29Earlier quoted context omitted.
The collapse of the yen carry trade.
I have read that numerous places and it seems plausible but it is beyond my investing experience. I think the new nominated Fed Chair is also a hard money advocate and is spooking USD alternatives (gold, silver, BTC, etc.) But hard money can be quite hard on the economy, so that could limit growth.
We should just blame "the willies".
Investment is all about belief. When the root cause is the willies, then we hallucinate reasons together.
Crypto and memes have demonstrated us a lot about the drives of individual investors.
Unfortunately it seems that professional investors are not that much more rational (from my limited personal experience with a small hedge fund, and from my years of looking at markets).
My favourite term has always been "taking profits" which is generated by the technical analysis (I loath that term) of looking at the prices: taking an effect and publishing a cause (trying to sound smart).
We are deeply irrational beings; often the more you go up a professional ladder the more rationalisation you see.
During unstable periods, we see lots of weird side-effects and there is a lot that doesn't seem to make sense.
Edit: a better meme could be "The use of AI by funds is destabilising markets"
Disclaimer: I am not a professional investor. I am a cynic.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#30Earlier quoted context omitted.
The margins on tech/cloud are just so astronomically higher than retail. Places like Walmart or Costco are fighting for IMO AWS should be spun out as a separate company.
This makes me wonder if Amazon the retailer requires having access to AWS services “at cost” in order to be profitable. If AWS was spun out completely, would Amazon proper be able to afford their AWS bill of AWS had a profit margin on it. I’m sure Amazon.com would be fine, but it would take a chunk out of their margins. I’m also sure that their X% ownership of the spun out AWS would cover the difference.
Consider the reverse. If AWS didn't have a large guaranteed customer in the form of Amazon, would they still be able to develop their products with perfect knowledge of the needs?