Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
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Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#2They always say it's about "AI," but it never turns out to be about AI. I wonder what's it about this time?
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#3Amazon 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.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#4They always say it's about "AI," but it never turns out to be about AI. I wonder what's it about this time?
The collapse of the yen carry trade.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#5They always say it's about "AI," but it never turns out to be about AI. I wonder what's it about this time?
Anecdotally, read somewhere that delivery people are going idle. The Orange One wrecked everything with tariffs, and the ripple of destruction is slowly taking its course. That's before we take into account massive outflows of cheap labor and fired government workers.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#6They always say it's about "AI," but it never turns out to be about AI. I wonder what's it about this time?
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 or something and save a lot of money. So its probably a better bet to put that capital into something like Nvidia or Tesla or whatever. it also looks like the US Fed isn't going to cut rates, so capital is getting more expensive.
Of course, if you are a CEO its great to blame all this on AI and then tell your investors you are increasing AI in your business (see: salesforce whose stock price is down 42% in a year and is now trading at 25x earnings)
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#7Question: 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?
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#8Amazon 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.
I know it feels comforting to say this, but deep down you have to realize that saying things confidently does not cause them to become true.
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#9They always say it's about "AI," but it never turns out to be about AI. I wonder what's it about this time?
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".
Re: Amazon plunge continues $1T wipeout as AI bubble fears ignite sell-off
#10Amazon 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.
If only that is what investors have figured out.
Unfortunately, it seems investors now think that all paid software will be replaced by AI generated software, somehow open source projects laundered through generative AI models should finally convince enterprise customers to go with free.