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by locallost 504 days ago
Well the price has a built in presumption that the earnings will keep growing. That's why PER is not that relevant for them, it's been over 50-70 since forever, but the stock went up 10x, which means earnings went up as well. DeepSeek might be good for their business overall, but it might mean earnings will not continue growing exponentially like they have been for the past two years. So it's time to bail.

You shouldn't underestimate the fact that a large amount of these trades are on margin. Sometimes you can't wait it out because you'll get margin called and if you can't pony up additional cash you're basically getting caught with your pants down.

Disclaimer: I am not a trader, so could be way off
1 comments
dogma1138 504 days ago
Why? The compute requirements would still continue to grow the more efficient and more capable the models become.

If it’s cheaper to inference you end up using the model for more task, it it’s cheaper to train you train more than models. And if you now need only 1000’s of GPUs instead of 10’s or 100’s of thousands you’ve just unlocked a massive client base of those who can afford to invest high six to low seven figures instead of 100’s of millions or billions into to try their luck.

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locallost 504 days ago
It could be, but maybe the feeling is the investments now are already massive and everyone has jumped on the AI train. If you are suddenly 10x efficient, and everyone gets 10x more efficient, there's less room to grow than before. What you're saying makes a lot of sense, but it's one thing to write it on a message board and another to use it to back up your decision that affects billions of dollars you have in your fund.

The proof is in the pudding, you're welcome to prove "everyone" wrong.

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margorczynski 504 days ago
Doesn't this situation also imply to some degree that China is focused on beating the US on AI and probably they will develop a competitor to NVIDIA that will cause margins to drop significantly?

They have a lot of very smart people and the will to do it, seems like a matter of time before they succeed.

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redwood 504 days ago
It might take 5 yrs to find the use cases. That's what happened with the dark fiber from the .com boom. Go look at Cisco 2001 for parallels
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