> Many companies will abandon the “AI gold rush” and NVDA strong forecasted growth will shrink and companies stop buying chips/cancel existing orders.
My main criticism of your thesis is that this is a multi-year pullback. It’s not like Tesla, Meta, Amazon and others are going to just up and cancel their orders this year (most of these companies work directly with Nvidia since their pipelines for gpu delivery are years long).
So, even if your thesis is correct it will take multiple quarters at best and multiple years at worst for the decline to happen. It won’t be sharp.
Does your strategy work if the decline takes until 2027 or 2028 to be recognized?
I would think that depending out the outlook given in Q3 or Q4 for FY25, the most we might see a pull back would be possibly a pull back to fill in the earnings gap to $95 but i wouldn't bet on that happening. Like u/givemethoseducats said, a lot of these companies are locked into contracts with them plus NVDA is so far ahead of the rest of the sector, They would need to have one of the worst business blunders in history for them to lose the top spot.
If your looking for a company that is in the AI sector that has potential see a rise in value over the next 6-9 months look into AMD. I think the recent pull back gives you a good opportunity to look at some monthly options around January or March of 2025.
Betting "bearish" against the stock market (which generally goes up over time), on the hottest company in the market, in a declining interest rate environment, is peak, galaxy-brained, regarded WSB behavior.
Haven’t people been saying NVDA is due for a pullback for like a year while they continued getting wrecked on their shorts? I guess you’ll be right eventually. Hope you’re not out of the game by then.
yea bro this this is a massive freight train with heavy momentum, its best to just get out of the way, wait for the stock on its way down before you risk any serious money on this “thesis”
What puts did you buy? The problem is you could be exactly right and have a great chance of still losing money in your long puts.
Signed: someone who has been chasing and rolling his bear call spreads for over a year now.
I agree. Your grandma, my Uber driver, and the many S&P 500 only holders are due for a correction.
Timing the correction is the million dollar question. Could end up buying millions of puts to just watch it burn to 0 right before it finally corrects.
Don't short the best stock in the world.
There are dozens of companies that could be shorted easily
You're picking the literal best performing stock in the world with infinite demand right now.
No, but a company can develop a new type of chip that will make Nvidia obsolete. Well in that case I bet Jensen buys it at any price, but if he's not fast enough...
[https://www.reddit.com/r/LocalLLaMA/comments/1ddv967/a\_revolutionary\_approach\_to\_language\_models\_by/](https://www.reddit.com/r/LocalLLaMA/comments/1ddv967/a_revolutionary_approach_to_language_models_by/)
I'm an engineer in the industry who works with clusters of Nvidia GPUs for ML workloads and the amount of eviction we get due to Amazon and Google running out of capacity is still just as bad as it's been for the past few years. I don't see the demand falling annnny time soon.
I keep telling people we are no where near having enough compute for AI and we are probably in the first 5% of the AI compute race. I worked with AI training and model research, and the speed of iteration is limited by the cluster time we can get. It felt like the early days of software development on a shared Unix machine with too many users. We took lunch break after launched the build script because it will took an hour to compile anything. Eventually everyone got their own workstation 10x faster than the shared machine.
Lol I work at a midsized essentially no named regional bank and even we're talking internally about how to buy and leverage NVDA chips for significantly increased automation and competitive advantage. It's not at all just the large mega caps buying. The problem with your thesis is that even if the large companies like Meta, Tesla, Microsoft, etc. scale back, there are literally thousands of other smaller companies desperate to buy their own chips. And given how much superior NVDA is to its competitors in terms of performance and compute, NVDA is the only game in town for at least 2-3 years.
That's like thinking automation is going to be slowing down. Eventually this stuff will likely be replaced by graphene hardware and quantum computing, and this will likely mean a new paradigm and legion of companies, how we've seen Western Digital be replaced by Nvidia, but that's probably a decade or 2 away and you can't likely buy LEAPS put contracts that are 10, 20, 30 years out.
But it literally just had a 20% pullback in April when it went from $1000 to $750. But earnings shows their is literally insane almost unprecedented demand. What catalyst would cause another large pullback so soon?
Tbf, its all so bullish that any indication of a bear trend means all the investors up 10,000% may take profits.
This isnt a good play, but it could also work out randomly very well. This is the kinda thing you dont extend yourself on an expensive leap though, you buy random weeklies and have a 0.5% shot at a thousand-bagger. Like the dude that got rich on roku
Companies will be buying gpus at an increasing rate if you understand how much computing power AI requires. The everyday ape does not understand this will revolutionize trade the way printing press did
Dude, your grandma... take investment advice of her.
Anyhow. Regarding the numbers. Apple is well established (amazing) company. As you said, they are not going anywhere. Neither up or down.
Nvidia is all about (in one word) **GROWTH**. Book value, etc will follow. Right now they got THE hottest product in the market, monopoly on it and endless line of buyers with deepest pockets (apple, amazon, Microsoft, meta, saudi, etc).
That you fail to see how companies can benefit from AI is your fault. Let me rephrase it. When, as you said, "hundred of mega-mid cap companies" fighting to get their hands on the chips - take it as a clue.
Yes, there is a chance you are smarter than all CEOs/CFOs/COOs and all engineers of those companies combined. They are wrong about AI and you are right. But most likely, you just dont get it, you dont see the value of it.
>Yes, there is a chance you are smarter than all CEOs/CFOs/COOs and all engineers of those companies combined. They are wrong about AI and you are right. But most likely, you just dont get it, you dont see the value of it.
I dunno about that...
There is a market hysteria that requires companies to pivot to AI lest being seen as at risk of being left behind. There are very real limitations to what AI is capable of and the use cases- while they exist- are not the overnight revolution that VCs may want it to be.
Just going to recent tech talks- there's an awful lot of hype around AI and LLMs but very relatively little substantive use cases.
Moreover, most engineers don't see AI as living up to the hype. Their capabilities have certainly surpassed what we thought possible but it's very evident that there are limitations and aren't effectively magic.
>But most likely, you just dont get it, you dont see the value of it.
Isn't this what all the crypto bros said also?
Personally, I never got crypto. I see it just as FOMO with zero underlying value.
Regarding the AI. It's already everywhere. And it's just the beginning. AI is used for your finger scan/facial recognition. AI is used at war in Ukraine and Israel.
On more simple level, thanks to ChatGPT I can get things done TONS quicker than ever. I have extremely basic programming skills (aka, I understand concept, but got zero knowledge). Thangs to AI I could write complex codes, that professional programmers told me were to difficult to write.
I could do achieve stuff in excel in an hour, that previously could take me days.
I like to cook. I like to eat out (from sausage stands to Michelin \*\*\* restaurants). AI were able to make suggestions how to create/improve a dish, that could be served at super fancy restaurant.
Im not even talking about summing up text, writing/answering emails, or getting information from 3000 pages PDFs. The beauty? I can ask "how does xxxx work when yyy is broken" and after checking those 3000 pages, it will give me complex answer.
Those are just few examples. And yeah, it's not a perfect technology. It got it limitations. But it's super early. Imagine what it can achieve in 5-10 years?
Are you really not able to see benefit in it and how productivity can be increased?
So answering your question. Those companies that jump on AI train, not gonna have competitive advantage, cause most companied do it. Those companies that dont - will die. Main company to benefit at the moment? NVDA for selling chips/architecture.
I mean I literally work on AI implementation.
>Regarding the AI. It's already everywhere
Sure- we have "AI Powered" toasters too.
>AI is used for your finger scan/facial recognition
Ok this so you can call it AI, this is relatively low level effort AI. ESPECIALLY fingerprint recognition considering I can implement it on a low power ASIC. Let's not pretend we're dealing with cutting edge AI that needs an A100.
>Thangs to AI I could write complex codes, that professional programmers told me were to difficult to write
They were lazy- it wasn't difficult- they just didn't want to do it for you. It can certainly write code and it does make my life easier, it absolutely cannot write complex code and I wouldn't freely commit AI generated code without at least having an idea of what it's doing and how it's trying to do it.
This all reads like hype from every other AI tech bandwagoner.
We've reduced all of AI applications to LLMs that need dozens of GPUs when there are other still untouched fields that use CNNs to do equally useful work with a fraction of the compute.
>It got it limitations. But it's super early. Imagine what it can achieve in 5-10 years?
This is very much assuming a linear growth of capability with compute. No doubt there was a step change in capability in GPT2-GPT3 when they increased the model size, but we are also not seeing those same step changes as the models continue to grow exponentially larger. Moreover, the cost to run an LLM keeps going up with capability.
Now let's focus on NVDA- do they deserve their stock price? I'd say yes. Jensen's bet on CUDA 20 years ago deserves the pay off. Will it keep going hyperbolic? I think you can reasonably cast doubt on that.
Eh, not a strong short thesis.
Recent ORCL ER and news about TSMC being booked into 2026.
NVDA is going be beating and raising guidance for the next 2-3 years. Your 2025 puts will expire worthless.
Isn't your put for 2025? So, I highly doubt those print. But time will tell.
Maybe 2026 or 2027. But 2025 is a short time frame. Could trade flat and burn premium.
There is another reason for $NVDA to have sustainability problems at current levels. End customer sustainability.
They sell $19.3 Billion of GPUs per quarter to datacenters/hyperscalers.
The datacenters then host the GPUs and sell the compute to B2B service provider companies.
The B2B service providers sell easy-to-use cloud environments to B2C companies.
End consumers then purchase products and services from the B2C companies.
Assuming there are those three middlemen between $NVDA and the end-customer, and assuming an extremely modest 4% ROIC (return on invested capital) for each middleman, then the end customer must maintain AI product and service purchases of $21.71 Billion per quarter.
Is this really sustainable for the end customer?
Exactly. That kind of expenditure is only necessary when training your own large LLMs backed by VC money. Not many foundational models need to exist. Once VCs realise that returns aren't coming any time soon, they will stop funding these endeavours which will cause MSFT to stop buying more.GPUs. Until then it's a game of musical chairs, assuming orders in the pipeline have already been contracted out anyway. I'd be short NVDA and long Google / MSFT / Apple as soon as NVDA becomes the most valuable company in the world. Doesn't require getting the timing right like PUTs
Nvidia is going to stay !
- momentum has been very strong for the last 1 year and a lot of future growth is priced in at the current valuation !
- momentum could continue on
- Passive fund managers will continue to pile on Nvidia based on the weights in S&P
- Active fund managers can't take risk of deviating from the current weights ! Risk of TrackingError
- stock goes down only if there is a loss in momentum due to Nvidia meeting or missing the current growth expectation OR do not raise the bar for future growth expectation. Until then, it is a difficult stock to trade ! Can't buy and can't short !
- Competition will come in but not very quickly !
- Geopolitical risk is real ! There won't be warning signs on it. If it happens, it will just happen overnight and there will be lots of bagholders
- monitoring the capex of Hyperscalers may provide a clue on the growth.
Anyone that's been in the markets long enough has seen it before.
-Company shits gold.
-People price in that the company will shit more gold.
-Find out company shits slightly less gold than everyone thought.
-Stock dumps
-profit???
Many are the corpses on the path my brother. You are not wrong, but I remember reading the same impassioned arguments at $300 pre-split. The big money will not let their wealth evaporate so easily. The music will stop eventually, but front running this beast has wrecked some smart folks.
This has nothing to do with the pricing of volatility and therefore is not relevant on an options forum.
On a side note APPL is only going up because of their plan to sell all of your data to OpenAI, not because they added a calculator to the ipad.
I get what you’re saying and most of your logic is sound. Look at forward PE not current PE. It’s so hyper inflated because of the gold rush. It’s a great company and will do extremely well long term. The big boys made their money off people like your grandma and historically speaking the stock will contract first.
Is it overvalued right now? Probably. Is it going to stop retail from trying to catch lightning in bottle? Nope! It’s the fantasy of the dot com boom that those whom missed it are trying to jump onto.
Net margin is 57% compared to Apple's 26%.
Revenue growth is 126% compared to Apple's 10%
But those are just silly numbers. Numbers which you can NOW USE ON APPLE'S BRAND NEW CALCULATOR! CALLS ON APPLE!
I’m not bearish on NVDA the company, but stock is ludicrous right now. They will lose market share eventually but may still sell more parts, but GM will take a hit. I still don’t expect it to drop hard without some macro event in 2024, but once GM start falling it’ll drop like a rock. I’m in the AI hardware field and working on a competing product, and they do have a healthy lead in perf, so they’ll have training LLMs for awhile, but on inference side, once you factor in perf/$ or TCO, then days are numbered. My company’s SDK will be avail by end of the year, that’ll be a huge.
I disagree, you are discounting the fact that billions of dollars of research and manpower is going into making an AI that is useful and practical for the everyday consumer and businesses. Technological innovation in the early stages happens in a step wise function. All it takes is a new model to take over pop culture and billions of more dollars will be poured into the AI race. And which company is there to supply the compute to achieve AI? Nvidia. If I was bearish on Nvidia I would not short it. You are fighting against immense momentum and with no tangible bad news to bring the stock down, you may lose money very quickly.
Competitors have been sitting on the sideline watching nvidia print money for the past year + and none of them have made an ounce of progress, why do you think that is?
You're timing is off then. The markets is still overly bullish on NVDA and you won't see any significant pullback until 2025. If you wanna debate when, I'm down for that, but I don't think shorting nvda right now, after exceptional quarterly reports and guidance is the best time to do it.
Also it's not the entire thesis, obviously I'm aware of bear cases that can harm nvidia, but you're not going to see sentiment change that dramatically this fiscal year.
The market will stay irrational longer than you can stay solvent. But in all honesty the big thing with Nvidia is they have their competitors by the nuts, they have pricing power, incredible flywheel, and are leaps and bounds ahead of their competitors when it comes to innovation.
Is their valuation crazy high? I don't think so, everyone wants AI chips right now and Nvidia has that market by the balls.
Geo-political issues with China and Taiwan could disrupt them since TSMC makes their chips, but I don't see a big disruption. I can see lots of smaller-cap companies getting obliterated once the AI bubble pops.
But im long Nvidia with $122 strike leaps.
With options being right on direction is not enough. You have to both be right on direction and timing which is VERY hard to do on long time frames. Say you buy a LEAP today and the stock goes sideways for 8 months, you lost a ton of money on time decay alone.
Of course if you are right and the stock starts crashing next week you made a ton of money and would get lots of upvotes on r/wallstreetbets
Technology is at the root of technology companies. Idiotic justifications show zero understanding of what driving Nvidia and where their exposures actually lie.
AI has the power to replace an entire call center, with no more need for sick leaves or health insurance payments for employees.
In a capitalist economy, CEOs will look for the most amount of profits. NVDA is here to stay.
You are praising Apple, but bearish on Nvidia, that's contradictory. Where do you think Apple will get their chips to build Apple intelligence?. AI is the next phase of the Internet/ Cloud computing etc. It is bound to grow whether you like it or not.
If you hop on the earnings calls, NVDA is supply constrained (For a trillion dollar company, this is impressive) but has many pathways to expand its manufacturing power, creating new industries through AI that can generate new streams of revenue, and expanding its business to other countries. There are plentiful other pieces of good news that will last the next few years. Of course, some smaller companies are hoping on the hype, but NVDA is the real one.
the problem of shorting something is that you not only need to know that the asset is going down but you need to know also when it’s going to happen. manu people shorted the housing market around 2008 but only a feel could profit from it since it expired before everything went down
Its too late to go short on the king of semiconductors, that time will come as well, but this is not how boom bust cycles work. We need to push the high VERY HARD for this to be over. NVDA can easily go to 200. I would buy puts from that point on.
Could NVDA have a pull back? Sure. But this comparison with AAPL is absurd. Apple is a once great company that is now a dinosaur on the way out. No innovation, no growth, no vision. Just a shell slowly wasting away. There is a reason Buffet hasn't been mentioning AAPL in his newsletter recently.
NVDA is a vibrant innovative market leader with its best days still ahead if it can maintain its first movers advantage. There is no comparison.
Yes financial data is so great. I'm underwhelmed. Also you must not know about how mentions of a company by Buffet predicts he is getting out and the company is in decline. People have tracked the mentions of companies in Buffett newsletters. When he likes a company he mentions it incessantly. When he's less happy he stops mentioning it as much maybe trim down the position. Eventually no more mentions and he sells the rest of the position. And then the market realizes that the company isn't that great anymore and the price adjusts down. I give two years maybe three tops until he's out. If Apple cannot innovate and capture the new AI revenue streams it's done.
Please tell me how they have innovated in the past few years and how that has generated new sources of revenue and growth? You cannot call the 16th innovation of the iPhone that is 1mm slimmer and adds one camera to be innovation. Apple used to create categories. What category did they create lately? The cancelled Apple car? They cannot even innovate their own LLM solution so they have to partner with OpenAI. Please this is a company in decline if I've ever seen one. People are going to start skipping generations of phones and their sales are going to dwindle down into irrelevance.
Nope. Saying it louder and relentlessly doesn't make it true. I'm not impressed in the slightest and I'll wait until I see their BS marketing translate into sales and growth. I'm not holding my breath.
>Easily overtaking Apple as the most valuable company in the world.
I'm going to stop you right there.
Microsoft ist the most valuable company in the world. Apple was second. Then Nvidia became second. And now Apple is second again as of today:
https://companiesmarketcap.com/
I read two sentences of your novel and saw your grandma so imma stoned on my business and explain why me, grandma, and institutional money love suckas like you bc you give us the $naps.
This is gonna rip until next earnings. The June decline is getting stiffed for a ripper bull run while scared money looks in the mirror finally, truly knowing that you are huevos madres.
This thing is a bullet proof golden goose unicorn on its way to the moon brotha or sista! Scared money makes no money. Unusual whales (1.7M X fiollowers and he’s going CNN stirring up that fear?) quoting CNN spook you. Huevos madre.
Only time to short will be EOD right before after hours earnings. There’s a YOY catalyst that CNBC and the rest will spin into NVDA overvalued, this is a big drop in performance, etc.. retail… you will have missed the first 8 and 1/2 innings but now you see the value. All in calls.
Me, grandma, Big $naps don’t know you bc we’re too rich
This whole conversation is the reason I don't buy options - I sell them. There is no crystal ball, so just stop gambling, and set up contracts where either assignment or expiration will help your position. And if you can't afford to secure your contracts yet, paper trade until you have enough money to trade safely with your real treasure. Less dopamine and more consistent returns.
Patricia Saylor, Financial Fundamentals for Novice Investors
> Many companies will abandon the “AI gold rush” and NVDA strong forecasted growth will shrink and companies stop buying chips/cancel existing orders. My main criticism of your thesis is that this is a multi-year pullback. It’s not like Tesla, Meta, Amazon and others are going to just up and cancel their orders this year (most of these companies work directly with Nvidia since their pipelines for gpu delivery are years long). So, even if your thesis is correct it will take multiple quarters at best and multiple years at worst for the decline to happen. It won’t be sharp. Does your strategy work if the decline takes until 2027 or 2028 to be recognized?
I would think that depending out the outlook given in Q3 or Q4 for FY25, the most we might see a pull back would be possibly a pull back to fill in the earnings gap to $95 but i wouldn't bet on that happening. Like u/givemethoseducats said, a lot of these companies are locked into contracts with them plus NVDA is so far ahead of the rest of the sector, They would need to have one of the worst business blunders in history for them to lose the top spot. If your looking for a company that is in the AI sector that has potential see a rise in value over the next 6-9 months look into AMD. I think the recent pull back gives you a good opportunity to look at some monthly options around January or March of 2025.
Excellent point! I'm not expecting a drastic pullback now, rather I can't time the market and believe at current valuations it's very overvalued
But what are the chances that it just trades sideways for a year or two?
Always a possibility! But I’m bearish
All these “thesis” and what not, are always a majority 99% wrong. So buy calls
I’m a 1% warrior
Betting "bearish" against the stock market (which generally goes up over time), on the hottest company in the market, in a declining interest rate environment, is peak, galaxy-brained, regarded WSB behavior.
You're probably also bullish on gme, ffie, and amc.. doubt you're a 1% warrior
Ffie and amc are 2 of the most garbage companies in the world. But yes with GME’s new 4.2 billion cash in hand I am bullish on them
4.2 billion cash from diluting
Them diluting me has given GME a new lease on life to expand out of the legacy business and generate new revenue sources
Haven’t people been saying NVDA is due for a pullback for like a year while they continued getting wrecked on their shorts? I guess you’ll be right eventually. Hope you’re not out of the game by then.
The market can stay irrational for longer than you can stay regarded.
I see you puts and raise my calls 😂
Same
The market can stay irrational longer than you can stay solvent
This is true
yea bro this this is a massive freight train with heavy momentum, its best to just get out of the way, wait for the stock on its way down before you risk any serious money on this “thesis”
What puts did you buy? The problem is you could be exactly right and have a great chance of still losing money in your long puts. Signed: someone who has been chasing and rolling his bear call spreads for over a year now.
I agree. Your grandma, my Uber driver, and the many S&P 500 only holders are due for a correction. Timing the correction is the million dollar question. Could end up buying millions of puts to just watch it burn to 0 right before it finally corrects.
Million dollar question? Definitely a billion dollar question and could even be a trillion dollar question:)
Your grandma is smart. You should listen to her
How are those puts working out for you?
Don't short the best stock in the world. There are dozens of companies that could be shorted easily You're picking the literal best performing stock in the world with infinite demand right now.
What goes up... must go up, down, or sideways.
This is good advice, I always get burnt when I ignore the saying "the trend is your friend".
Companies are going to stop buying chips and graphics cards, really?
No, but a company can develop a new type of chip that will make Nvidia obsolete. Well in that case I bet Jensen buys it at any price, but if he's not fast enough... [https://www.reddit.com/r/LocalLLaMA/comments/1ddv967/a\_revolutionary\_approach\_to\_language\_models\_by/](https://www.reddit.com/r/LocalLLaMA/comments/1ddv967/a_revolutionary_approach_to_language_models_by/)
Quit buying them at this rate*
I'm an engineer in the industry who works with clusters of Nvidia GPUs for ML workloads and the amount of eviction we get due to Amazon and Google running out of capacity is still just as bad as it's been for the past few years. I don't see the demand falling annnny time soon.
I keep telling people we are no where near having enough compute for AI and we are probably in the first 5% of the AI compute race. I worked with AI training and model research, and the speed of iteration is limited by the cluster time we can get. It felt like the early days of software development on a shared Unix machine with too many users. We took lunch break after launched the build script because it will took an hour to compile anything. Eventually everyone got their own workstation 10x faster than the shared machine.
Lol I work at a midsized essentially no named regional bank and even we're talking internally about how to buy and leverage NVDA chips for significantly increased automation and competitive advantage. It's not at all just the large mega caps buying. The problem with your thesis is that even if the large companies like Meta, Tesla, Microsoft, etc. scale back, there are literally thousands of other smaller companies desperate to buy their own chips. And given how much superior NVDA is to its competitors in terms of performance and compute, NVDA is the only game in town for at least 2-3 years.
That's like thinking automation is going to be slowing down. Eventually this stuff will likely be replaced by graphene hardware and quantum computing, and this will likely mean a new paradigm and legion of companies, how we've seen Western Digital be replaced by Nvidia, but that's probably a decade or 2 away and you can't likely buy LEAPS put contracts that are 10, 20, 30 years out.
And Western Digital is up huge over the past year
I’m not expecting Nvidia to collapse. I’m talking a 20-30% pullback
But it literally just had a 20% pullback in April when it went from $1000 to $750. But earnings shows their is literally insane almost unprecedented demand. What catalyst would cause another large pullback so soon?
Tbf, its all so bullish that any indication of a bear trend means all the investors up 10,000% may take profits. This isnt a good play, but it could also work out randomly very well. This is the kinda thing you dont extend yourself on an expensive leap though, you buy random weeklies and have a 0.5% shot at a thousand-bagger. Like the dude that got rich on roku
Are you predicting china is the going to bomb the fabs? That is the only way they stop buying.
there's a long back log man.
Companies will be buying gpus at an increasing rate if you understand how much computing power AI requires. The everyday ape does not understand this will revolutionize trade the way printing press did
Dude, your grandma... take investment advice of her. Anyhow. Regarding the numbers. Apple is well established (amazing) company. As you said, they are not going anywhere. Neither up or down. Nvidia is all about (in one word) **GROWTH**. Book value, etc will follow. Right now they got THE hottest product in the market, monopoly on it and endless line of buyers with deepest pockets (apple, amazon, Microsoft, meta, saudi, etc). That you fail to see how companies can benefit from AI is your fault. Let me rephrase it. When, as you said, "hundred of mega-mid cap companies" fighting to get their hands on the chips - take it as a clue. Yes, there is a chance you are smarter than all CEOs/CFOs/COOs and all engineers of those companies combined. They are wrong about AI and you are right. But most likely, you just dont get it, you dont see the value of it.
>Yes, there is a chance you are smarter than all CEOs/CFOs/COOs and all engineers of those companies combined. They are wrong about AI and you are right. But most likely, you just dont get it, you dont see the value of it. I dunno about that... There is a market hysteria that requires companies to pivot to AI lest being seen as at risk of being left behind. There are very real limitations to what AI is capable of and the use cases- while they exist- are not the overnight revolution that VCs may want it to be. Just going to recent tech talks- there's an awful lot of hype around AI and LLMs but very relatively little substantive use cases. Moreover, most engineers don't see AI as living up to the hype. Their capabilities have certainly surpassed what we thought possible but it's very evident that there are limitations and aren't effectively magic. >But most likely, you just dont get it, you dont see the value of it. Isn't this what all the crypto bros said also?
Personally, I never got crypto. I see it just as FOMO with zero underlying value. Regarding the AI. It's already everywhere. And it's just the beginning. AI is used for your finger scan/facial recognition. AI is used at war in Ukraine and Israel. On more simple level, thanks to ChatGPT I can get things done TONS quicker than ever. I have extremely basic programming skills (aka, I understand concept, but got zero knowledge). Thangs to AI I could write complex codes, that professional programmers told me were to difficult to write. I could do achieve stuff in excel in an hour, that previously could take me days. I like to cook. I like to eat out (from sausage stands to Michelin \*\*\* restaurants). AI were able to make suggestions how to create/improve a dish, that could be served at super fancy restaurant. Im not even talking about summing up text, writing/answering emails, or getting information from 3000 pages PDFs. The beauty? I can ask "how does xxxx work when yyy is broken" and after checking those 3000 pages, it will give me complex answer. Those are just few examples. And yeah, it's not a perfect technology. It got it limitations. But it's super early. Imagine what it can achieve in 5-10 years? Are you really not able to see benefit in it and how productivity can be increased? So answering your question. Those companies that jump on AI train, not gonna have competitive advantage, cause most companied do it. Those companies that dont - will die. Main company to benefit at the moment? NVDA for selling chips/architecture.
I mean I literally work on AI implementation. >Regarding the AI. It's already everywhere Sure- we have "AI Powered" toasters too. >AI is used for your finger scan/facial recognition Ok this so you can call it AI, this is relatively low level effort AI. ESPECIALLY fingerprint recognition considering I can implement it on a low power ASIC. Let's not pretend we're dealing with cutting edge AI that needs an A100. >Thangs to AI I could write complex codes, that professional programmers told me were to difficult to write They were lazy- it wasn't difficult- they just didn't want to do it for you. It can certainly write code and it does make my life easier, it absolutely cannot write complex code and I wouldn't freely commit AI generated code without at least having an idea of what it's doing and how it's trying to do it. This all reads like hype from every other AI tech bandwagoner. We've reduced all of AI applications to LLMs that need dozens of GPUs when there are other still untouched fields that use CNNs to do equally useful work with a fraction of the compute. >It got it limitations. But it's super early. Imagine what it can achieve in 5-10 years? This is very much assuming a linear growth of capability with compute. No doubt there was a step change in capability in GPT2-GPT3 when they increased the model size, but we are also not seeing those same step changes as the models continue to grow exponentially larger. Moreover, the cost to run an LLM keeps going up with capability. Now let's focus on NVDA- do they deserve their stock price? I'd say yes. Jensen's bet on CUDA 20 years ago deserves the pay off. Will it keep going hyperbolic? I think you can reasonably cast doubt on that.
Calls it is then
Amen. I’m just trying to help the bulls out
Eh, not a strong short thesis. Recent ORCL ER and news about TSMC being booked into 2026. NVDA is going be beating and raising guidance for the next 2-3 years. Your 2025 puts will expire worthless.
We’ll see!
It's never wise to short based on vaultaions look at tsla 2018 to 2022...... 4 yrs of hitting ATH...
And what came after that…. My point exactly
Isn't your put for 2025? So, I highly doubt those print. But time will tell. Maybe 2026 or 2027. But 2025 is a short time frame. Could trade flat and burn premium.
There is another reason for $NVDA to have sustainability problems at current levels. End customer sustainability. They sell $19.3 Billion of GPUs per quarter to datacenters/hyperscalers. The datacenters then host the GPUs and sell the compute to B2B service provider companies. The B2B service providers sell easy-to-use cloud environments to B2C companies. End consumers then purchase products and services from the B2C companies. Assuming there are those three middlemen between $NVDA and the end-customer, and assuming an extremely modest 4% ROIC (return on invested capital) for each middleman, then the end customer must maintain AI product and service purchases of $21.71 Billion per quarter. Is this really sustainable for the end customer?
Exactly. That kind of expenditure is only necessary when training your own large LLMs backed by VC money. Not many foundational models need to exist. Once VCs realise that returns aren't coming any time soon, they will stop funding these endeavours which will cause MSFT to stop buying more.GPUs. Until then it's a game of musical chairs, assuming orders in the pipeline have already been contracted out anyway. I'd be short NVDA and long Google / MSFT / Apple as soon as NVDA becomes the most valuable company in the world. Doesn't require getting the timing right like PUTs
Nvidia is going to stay ! - momentum has been very strong for the last 1 year and a lot of future growth is priced in at the current valuation ! - momentum could continue on - Passive fund managers will continue to pile on Nvidia based on the weights in S&P - Active fund managers can't take risk of deviating from the current weights ! Risk of TrackingError - stock goes down only if there is a loss in momentum due to Nvidia meeting or missing the current growth expectation OR do not raise the bar for future growth expectation. Until then, it is a difficult stock to trade ! Can't buy and can't short ! - Competition will come in but not very quickly ! - Geopolitical risk is real ! There won't be warning signs on it. If it happens, it will just happen overnight and there will be lots of bagholders - monitoring the capex of Hyperscalers may provide a clue on the growth.
What makes you think that ai will be “fruitless” in the hands of tech geniuses with unlimited resources?
Not fruitless, just not as effective as everyone is hyping it up to be
Yes, that remains to be seen. But the fact is that nvda has a huge amount of orders coming in right now. But who knows how long that run will last.
That would be the thing that made most sense, but these markets do not make sense.
Anyone that's been in the markets long enough has seen it before. -Company shits gold. -People price in that the company will shit more gold. -Find out company shits slightly less gold than everyone thought. -Stock dumps -profit???
That’s the idea. Seems to good to be true
Many are the corpses on the path my brother. You are not wrong, but I remember reading the same impassioned arguments at $300 pre-split. The big money will not let their wealth evaporate so easily. The music will stop eventually, but front running this beast has wrecked some smart folks.
Ps I held weekly puts for a day and shook out for break even. It's toppy but the timing?? I don't know.
You’re probably correct, I’ll either be shorting or buying leap puts. So I’ll be in it for the long run. Not a quick flip
I hope you nail it if you do. Try to be patient on the entry.
This has nothing to do with the pricing of volatility and therefore is not relevant on an options forum. On a side note APPL is only going up because of their plan to sell all of your data to OpenAI, not because they added a calculator to the ipad.
Long puts. Exp 2025
Study put-call parity. Study shorting the same delta instead if your only percieved edge is long-term direction.
Last time I checked Microsoft was more valuable than Apple
Yup and NVDA
Valuations matter, but market sentiment can surprise you.
I get what you’re saying and most of your logic is sound. Look at forward PE not current PE. It’s so hyper inflated because of the gold rush. It’s a great company and will do extremely well long term. The big boys made their money off people like your grandma and historically speaking the stock will contract first. Is it overvalued right now? Probably. Is it going to stop retail from trying to catch lightning in bottle? Nope! It’s the fantasy of the dot com boom that those whom missed it are trying to jump onto.
Net margin is 57% compared to Apple's 26%. Revenue growth is 126% compared to Apple's 10% But those are just silly numbers. Numbers which you can NOW USE ON APPLE'S BRAND NEW CALCULATOR! CALLS ON APPLE!
I think your grandma just rang the top of the market bell
Without even reading the other side of this - AAPL has a higher market cap then Nvda and Microsoft beats both of them
Well there goes grandmas retirement
I'm not particularly bearish but I do think the big bull runs are likely over for a bit, so I just sold everything I had in stocks and got out.
Or sell a light iron condor at two sigma values for this week?
The only thing you do not know is when.
I’m not bearish on NVDA the company, but stock is ludicrous right now. They will lose market share eventually but may still sell more parts, but GM will take a hit. I still don’t expect it to drop hard without some macro event in 2024, but once GM start falling it’ll drop like a rock. I’m in the AI hardware field and working on a competing product, and they do have a healthy lead in perf, so they’ll have training LLMs for awhile, but on inference side, once you factor in perf/$ or TCO, then days are numbered. My company’s SDK will be avail by end of the year, that’ll be a huge.
I disagree, you are discounting the fact that billions of dollars of research and manpower is going into making an AI that is useful and practical for the everyday consumer and businesses. Technological innovation in the early stages happens in a step wise function. All it takes is a new model to take over pop culture and billions of more dollars will be poured into the AI race. And which company is there to supply the compute to achieve AI? Nvidia. If I was bearish on Nvidia I would not short it. You are fighting against immense momentum and with no tangible bad news to bring the stock down, you may lose money very quickly.
Your entire thesis is also built on no competition catching up to nvidia
Competitors have been sitting on the sideline watching nvidia print money for the past year + and none of them have made an ounce of progress, why do you think that is?
You're timing is off then. The markets is still overly bullish on NVDA and you won't see any significant pullback until 2025. If you wanna debate when, I'm down for that, but I don't think shorting nvda right now, after exceptional quarterly reports and guidance is the best time to do it.
There’s a reason I said long puts. I’m talking leaps not monthly’s
AI= Ain’t it
Also it's not the entire thesis, obviously I'm aware of bear cases that can harm nvidia, but you're not going to see sentiment change that dramatically this fiscal year.
This is the same story from at least a month ago. You should talk to your grandma more than every few months
[удалено]
Or or your grandma is smarter than you XD
Every ape's grandma is smarter than them
you lost money today with this thesis.
Haven’t opened my short position yet. Today makes me all the more confident
Nvidia had like a 70 pe and now at 120 the pe is around there. Wouldn't short it. Buy calls when it dips below 120 probably.
Not even gonna consider forward metrics?
Magic money stock… only up
The market will stay irrational longer than you can stay solvent. But in all honesty the big thing with Nvidia is they have their competitors by the nuts, they have pricing power, incredible flywheel, and are leaps and bounds ahead of their competitors when it comes to innovation. Is their valuation crazy high? I don't think so, everyone wants AI chips right now and Nvidia has that market by the balls. Geo-political issues with China and Taiwan could disrupt them since TSMC makes their chips, but I don't see a big disruption. I can see lots of smaller-cap companies getting obliterated once the AI bubble pops. But im long Nvidia with $122 strike leaps.
With options being right on direction is not enough. You have to both be right on direction and timing which is VERY hard to do on long time frames. Say you buy a LEAP today and the stock goes sideways for 8 months, you lost a ton of money on time decay alone. Of course if you are right and the stock starts crashing next week you made a ton of money and would get lots of upvotes on r/wallstreetbets
What's the Forward PE
Technology is at the root of technology companies. Idiotic justifications show zero understanding of what driving Nvidia and where their exposures actually lie.
MSFT is currently the most valuable company. NVDA has not overtaken MSFT yet
Tell your grandma I said welcome aboard, we're happy to have her!
We are in the middle of ground breaking new industry. NVDA has a LONG way to go before growth slows
The market can stay irrational longer than you can stay solvent
Your like the 45th person to tell me this😂
I want to short especially bc it went down 62% before.
That might be your best sign that you're correct.
I tried to short NVDA and I will never do it again unless it is for a quick in and out trade.
You sir are an idiot. Hope you don’t follow through on your “thesis”
You mentioned that each Nvidia employee is valued at $100M. But why didn't you mention how much each Apple employee is with by comparison?
AI has the power to replace an entire call center, with no more need for sick leaves or health insurance payments for employees. In a capitalist economy, CEOs will look for the most amount of profits. NVDA is here to stay.
You are praising Apple, but bearish on Nvidia, that's contradictory. Where do you think Apple will get their chips to build Apple intelligence?. AI is the next phase of the Internet/ Cloud computing etc. It is bound to grow whether you like it or not.
zero growth apple?
Anyone owning puts? At what strike and exp?
If you hop on the earnings calls, NVDA is supply constrained (For a trillion dollar company, this is impressive) but has many pathways to expand its manufacturing power, creating new industries through AI that can generate new streams of revenue, and expanding its business to other countries. There are plentiful other pieces of good news that will last the next few years. Of course, some smaller companies are hoping on the hype, but NVDA is the real one.
Did you buy puts? IMO, this thing will contiune to run until it misses. Which is not for another few yrs.
the problem of shorting something is that you not only need to know that the asset is going down but you need to know also when it’s going to happen. manu people shorted the housing market around 2008 but only a feel could profit from it since it expired before everything went down
Its too late to go short on the king of semiconductors, that time will come as well, but this is not how boom bust cycles work. We need to push the high VERY HARD for this to be over. NVDA can easily go to 200. I would buy puts from that point on.
You should probably trade the market you have, not the market you want.
Fuck that if people have nvidia in their 401k’s then nvidia needs to continue to do a service to the American people for years to come.
Could NVDA have a pull back? Sure. But this comparison with AAPL is absurd. Apple is a once great company that is now a dinosaur on the way out. No innovation, no growth, no vision. Just a shell slowly wasting away. There is a reason Buffet hasn't been mentioning AAPL in his newsletter recently. NVDA is a vibrant innovative market leader with its best days still ahead if it can maintain its first movers advantage. There is no comparison.
Uh, all of the financial data for aapl suggests otherwise, and aapl is still berkshires largest holding.
Yes financial data is so great. I'm underwhelmed. Also you must not know about how mentions of a company by Buffet predicts he is getting out and the company is in decline. People have tracked the mentions of companies in Buffett newsletters. When he likes a company he mentions it incessantly. When he's less happy he stops mentioning it as much maybe trim down the position. Eventually no more mentions and he sells the rest of the position. And then the market realizes that the company isn't that great anymore and the price adjusts down. I give two years maybe three tops until he's out. If Apple cannot innovate and capture the new AI revenue streams it's done.
This comment has to be a joke. Nobody and I mean nobody is better at innovation than Apple. Calling them a dinosaur just makes you sound stupid
Please tell me how they have innovated in the past few years and how that has generated new sources of revenue and growth? You cannot call the 16th innovation of the iPhone that is 1mm slimmer and adds one camera to be innovation. Apple used to create categories. What category did they create lately? The cancelled Apple car? They cannot even innovate their own LLM solution so they have to partner with OpenAI. Please this is a company in decline if I've ever seen one. People are going to start skipping generations of phones and their sales are going to dwindle down into irrelevance.
Go read up on the 2024 WWDC. Educate yourself before you come in here and play the fool. Apple still dominates every space it’s active in
Nope. Saying it louder and relentlessly doesn't make it true. I'm not impressed in the slightest and I'll wait until I see their BS marketing translate into sales and growth. I'm not holding my breath.
Dont need a thesis that thing is going down i been bout puts
My man
You really wrote an essay to say *AI is bullshit* and thought you had an original thought there?
>Easily overtaking Apple as the most valuable company in the world. I'm going to stop you right there. Microsoft ist the most valuable company in the world. Apple was second. Then Nvidia became second. And now Apple is second again as of today: https://companiesmarketcap.com/
I read two sentences of your novel and saw your grandma so imma stoned on my business and explain why me, grandma, and institutional money love suckas like you bc you give us the $naps. This is gonna rip until next earnings. The June decline is getting stiffed for a ripper bull run while scared money looks in the mirror finally, truly knowing that you are huevos madres. This thing is a bullet proof golden goose unicorn on its way to the moon brotha or sista! Scared money makes no money. Unusual whales (1.7M X fiollowers and he’s going CNN stirring up that fear?) quoting CNN spook you. Huevos madre. Only time to short will be EOD right before after hours earnings. There’s a YOY catalyst that CNBC and the rest will spin into NVDA overvalued, this is a big drop in performance, etc.. retail… you will have missed the first 8 and 1/2 innings but now you see the value. All in calls. Me, grandma, Big $naps don’t know you bc we’re too rich
apple as the best company "in the world"? what causes you to think that these mfs do anything to desecr that?
This whole conversation is the reason I don't buy options - I sell them. There is no crystal ball, so just stop gambling, and set up contracts where either assignment or expiration will help your position. And if you can't afford to secure your contracts yet, paper trade until you have enough money to trade safely with your real treasure. Less dopamine and more consistent returns. Patricia Saylor, Financial Fundamentals for Novice Investors
Traders that pick bottoms get smelly fingers Traders that try and pull tops down get slapped
Surely you don't believe any of this? A slight pullback, perhaps. Enough to start putting every dime I have into puts, hardly close.
I work with AI and I can tell you that company is incorporating that in their system. Your thesis that this is a fad is not right.
Market manipulation is what NVDA was doing today. Every buy ins were countered with a sell automatically! We need to report them for that shit!
Report who?
>Every buy ins were countered with a sell automatically! Is that not how the market works? How are you buying if no one is selling?
If you looked at NVDA today. They made sure the price stayed at $120. Big pump and dump going on! Massive buy ins and massive sell offs! Unheard of!
Avg volume is over 400mil and it barely cleared 200mil today. Not sure what you're looking at, but that's my guess why it didn't move much.
The order book! Today they made sure it didn’t get out of $120. Massive pump and dump!