Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off

Post by frumper » Fri, Feb 06, 2026, 5:14 PM UTC

mlyle wrote: post #59

bluGill wrote: post #25

Earlier quoted context omitted.

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).

Just because people need a grocery store doesn't mean that you're guaranteed to make money running one. multiplying huge revenue by a small percentage to get a big positive number to multiplying huge revenue by a small negative percentage to get a big negative number So that's how Kroger managed to lose billions over the last couple of quarters, or how small changes in shoplifting/shrinkage based on store makeup can…

Post by franktankbank » Fri, Feb 06, 2026, 5:23 PM UTC

DaedalusII wrote: post #45

dotandgtfo wrote: post #16

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I've always found it confusing how run of the mill SaaS trades at multiples assuming decades of doing business. The amount of change in software businesses has been massive and being able to run a successful software business even for 15 years from 2010-2025 requires a great deal of strategy and foresight and more likely than not that's not enough. Considering how these dynamics have been accelerating as technology a…

Investor analyst looks at earnings growth and determines Customer Acquisition Cost (CAC) and Customer Acquisition Cost Payback Period (CACPP). They determine that ABC Software Corporation has no marginal manufacturing cost because it makes software that it sells online, so if it invested 90% of its profit margin into marketing it could grow its ARR by 140% a year. Then they extrapolate that for 30 years and say ok th…

Post by franktankbank » Fri, Feb 06, 2026, 5:41 PM UTC

throwup238 wrote: post #50

dd8601fn wrote: post #36

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I’ve heard the same about Nvidia, quite a few times, but have never really understood it. I don’t suppose you know a good “for dummies” explanation of why CUDA is such an insurmountable moat for them? Like, what is it about that software that AMD can’t produce for their own hardware, or for a most important subset, with these $1T market stakes?

> I don’t suppose you know a good “for dummies” explanation of why CUDA is such an insurmountable moat for them? Theoretically the moat isn’t insurmountable and AMD has made some inroads thanks to the open source community but in practice a generic CUDA layer requires a ton of R&D that AMD hasn’t been able to afford since the ATI acquisition. It’s been fighting for its existence for most of that time and just never h…

Post by bhouston » Fri, Feb 06, 2026, 5:48 PM UTC

franktankbank wrote: post #65

bhouston wrote: post #61

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AWS is not a software company either, it is a capital intensive computing infrastructure company. NVIDIA as well is a capital intensive computer hardware company. Just because software plays a role, doesn't make them software companies. It is like saying all companies are "electrical companies" because they require electricity to operate.

Is a seal a sea creature or a land dweller? Well it eats at sea.

Post by ecshafer » Fri, Feb 06, 2026, 6:12 PM UTC

dd8601fn wrote: post #36

ecshafer wrote: post #22

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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.

I’ve heard the same about Nvidia, quite a few times, but have never really understood it. I don’t suppose you know a good “for dummies” explanation of why CUDA is such an insurmountable moat for them? Like, what is it about that software that AMD can’t produce for their own hardware, or for a most important subset, with these $1T market stakes?