[bigyabai]

Who replaces Nvidia? That's the 5 trillion dollar question, and nobody has stepped forward to answer it.

The closest the industry came to replacing CUDA was with Khronos and OpenCL, but that ship has sailed. CDNA, Apple Silicon, Intel Inside, none of them are trying to take Nvidia's crown. The niche for HPC will exist, and Nvidia continues to serve the niche while others turn up their nose.

For my money, shorting Nvidia is like betting on Glass Joe to beat Mike Tyson. There's going to be incredible cloud spend on unglamorous stuff like defense and automated computer vision, and that will keep Nvidia's demand afloat even at a wild valuation.

[ggm]

That's a substantive point, the GPUs are reprogrammable to do other tasks so the people who pay for massive CFD computation in Mil and Oil will have competitive offers, but I'm unsure the spectacular future value is there, if the perpetual "buy more" dries up. They could wind up alive, but with a smaller horizon.

I know I harbour resentment because of the knock on effects on ram and SSD pricing, but I'm serious that I think the amount of capital being sunk in hyperscalers does not look to me to be recoverable inside the investors ROI. If my example is poorly chosen, perhaps the people currently buying the kit are the ones destined to have a fall.

[Ekaros]

With Nvidia no one needs to replace them. Their valuation is build on large demand and huge margins. Demand just going lower or margins dropping following that should lead to lower valuation without anyone replacing them.

I could very well see current market being in state of overinvestment. Meaning future demand is lower which could lead to less units sold thus lower profits thus lower valuation.

[bigyabai]

Nvidia's profits are built on demand and margins. Their valuation is constrained by their supply, Nvidia sells-out of almost all their datacenter hardware before it hits shelves. Even if the memory shortage never clears up, Nvidia is the best-poised company to buy memory at-cost and sell it for ludicrous prices.

For their margins to go down, that demand would have to be satisfied. And those customers by-and-large do not see any commodified CUDA alternatives on the market, they only want Nvidia hardware. Hence my question - who will rise to the challenge? If the answer is nobody, then you've just found out why people don't short Nvidia.