The Investment Thread

[LouisEly]

NVDA correction has hit hard today.  DOW actually up slightly, but NVDA weighting on NASDAQ and S&P 500 has both down significantly.

CBOE 10-year note down over 2% already today.

[CheezWizHed]

7 minutes ago, LouisEly said:

NVDA correction has hit hard today.  DOW actually up slightly, but NVDA weighting on NASDAQ and S&P 500 has both down significantly.

CBOE 10-year note down over 2% already today.

Deep Seek becomes the next "TikTok" government target? 

[owbc]

2 hours ago, CheezWizHed said:

Deep Seek becomes the next "TikTok" government target? 

This news seems especially bad for Nvidia and OpenAI but the average Joe should benefit from cheaper, open source AI. 
 

America should probably accept that we’re not going to be the gatekeepers of AI and more broadly that our science and R&D is rapidly falling behind China. 

[nate82]

42 minutes ago, owbc said:

America should probably accept that we’re not going to be the gatekeepers of AI and more broadly that our science and R&D is rapidly falling behind China. 

Take what China says with a very fine pinch of salt.  They are like Russia always over hyping what they are developing can actually do.  IE Russia’s military equipment being the best when it clearly is not.  If we were still in the 1970’s Russia’s military tech would be impressive and the same can be said about China.  

[owbc]

6 minutes ago, nate82 said:

Take what China says with a very fine pinch of salt.  They are like Russia always over hyping what they are developing can actually do.  IE Russia’s military equipment being the best when it clearly is not.  If we were still in the 1970’s Russia’s military tech would be impressive and the same can be said about China.  

I think that’s an outdated line of thinking for the most part when it comes to China. In the case of DeepSeek, we’ll know in a week since the model is out there for anyone to verify. 
 

American CEOs also run their mouths with outlandish claims…

[homer]

43 minutes ago, nate82 said:

Take what China says with a very fine pinch of salt.  They are like Russia always over hyping what they are developing can actually do.  IE Russia’s military equipment being the best when it clearly is not.  If we were still in the 1970’s Russia’s military tech would be impressive and the same can be said about China.  

It's open source. Anyone can go look at the code and test it.

[zurch1818]

I don't really buy single stocks. But if I did, does that in theory mean NVDA is on sale and it's time to buy? My uninformed guess is companies will copy each other much like Apple and Android have copied each other for years and the stock will quickly rebound?

[nate82]

1 hour ago, zurch1818 said:

I don't really buy single stocks. But if I did, does that in theory mean NVDA is on sale and it's time to buy? My uninformed guess is companies will copy each other much like Apple and Android have copied each other for years and the stock will quickly rebound?

I don't believe NVDA dropped today because of the AI announcement.  NVDA is mostly a hardware company and not so much a software company.  They do have some software but it wouldn't be impacted by the AI announcement today.

 

6 hours ago, owbc said:

I think that’s an outdated line of thinking for the most part when it comes to China.

Not really.  Russia and China still scream about how they have hyper sonic missiles when they do not.  Well they do but they are not truly hyper sonic.  Stealth aircraft both are also behind the F-22 Raptor which was made in the 90's.  Not to mention neither Russia or China have a plane like the F-35 or even the B-52.  Everything China has militarily is either a hacked version of what the US or the EU has made or it is modified Soviet Union era equipment.  Also the claim of China having more boats is true but look at the tonnage between the US Navy and China's Navy.  Majority of their boats are coast guard level boats.  So smaller boats that would be best used along the shore and not out in the open seas. 

When it comes to tech other than TikTok there really isn't much out there that they do better. 

6 hours ago, homer said:

It's open source. Anyone can go look at the code and test it.

Yes we will see.  But I have my doubts.

[zurch1818]

On 1/27/2025 at 11:26 PM, nate82 said:

I don't believe NVDA dropped today because of the AI announcement.  NVDA is mostly a hardware company and not so much a software company.  They do have some software but it wouldn't be impacted by the AI announcement today.

NVDA is now up 8.82% so I missed my chance to cash in on people panicking. That does make sense though. It's just hard to predict what will happen in the long-term with single stocks which is why I just can't get myself to invest in single stocks. My mutual funds I'm sure have quite a bit of NVDA in their portfolio.

[LouisEly]

On 1/27/2025 at 9:26 PM, nate82 said:

I don't believe NVDA dropped today because of the AI announcement.  NVDA is mostly a hardware company and not so much a software company.  They do have some software but it wouldn't be impacted by the AI announcement today.

The AI announcement was the cause of the drop, and it does affect NVDA.  Deep Seek is able to run on reduced-capacity chips, potentially affecting the demand for NVDA's top of the line chips.

[CheezWizHed]

Yes, AI is the main reason NVidia went nuts.  Clearly the Deepseek announcement impacted it. 

Oddly, I was having a conversation in the office when someone was talking about this and wondering where the stock price would go next.  I told him to buy because it was most likely a panic reaction and the stock would bounce back up pretty quick after people evaluated the reality of things.  

But I didn't take my own advice either, so...

[nate82]

3 hours ago, LouisEly said:

The AI announcement was the cause of the drop, and it does affect NVDA.  Deep Seek is able to run on reduced-capacity chips, potentially affecting the demand for NVDA's top of the line chips.

Not really.  Their top models maybe impacted but they also sell other models.  The sell off seemed more like a natural sell off and not something that was impacted by the announcement.  If anything that announcement should have increased the stock price.

Making something more efficient shouldn’t impact a company making a product.  If anything it will allow for more people to get into it thus increasing demand and increasing sales. Decreasing the cost for entry will allow for more sales even if it is at a lower end product.  The efficiency will also help the higher end product by allowing it to do more.

[LouisEly]

1 hour ago, nate82 said:

Their top models maybe impacted but they also sell other models.

The top models are the most profitable, and being able to operate on reduced capacity chips opens the door to competitors who may be able to produce reduced-capacity chips but cannot match NVDA's top of the line chips.

Competitors may not have those chips now, but they are developing them and valuation is based on expected future earnings, not present earnings.

[LouisEly]

1 hour ago, CheezWizHed said:

But I didn't take my own advice either, so...

Good thing you didn't.  Down 5% today.

[nate82]

42 minutes ago, LouisEly said:

The top models are the most profitable, and being able to operate on reduced capacity chips opens the door to competitors who may be able to produce reduced-capacity chips but cannot match NVDA's top of the line chips.

Competitors may not have those chips now, but they are developing them and valuation is based on expected future earnings, not present earnings.

None of this is new.  AMD is very close to replicating what NVIDIA is doing in the AI space.  All of this would be already baked into any future revenue.  Efficiency of the software is something that would improve so I don’t see the relevance here from this announcement.

[PlayerHader]

On 1/29/2025 at 9:06 AM, LouisEly said:

The AI announcement was the cause of the drop, and it does affect NVDA.  Deep Seek is able to run on reduced-capacity chips, potentially affecting the demand for NVDA's top of the line chips.

Isn't the common assumption that this is a sign that China is finding its way around chip sanctions moreso than their being able to create a comparable product using inferior components?

[owbc]

3 hours ago, PlayerHader said:

Isn't the common assumption that this is a sign that China is finding its way around chip sanctions moreso than their being able to create a comparable product using inferior components?

More the latter I think -- specifically the common assumption about where AI is going to go in the next 5-10 years. It's also about the dynamic between the buyers and sellers of AI models and chips as well as between open source and proprietary models. 

The assumption prior to this week is that the only way that these giant LLMs are going to get better is with more data and more compute -- basically building giant data centers with Nvidia chips that are so energy intensive that they need their own nuclear power plant. Microsoft has been throwing their weight and dollars in that direction, not to mention their stake in ChatGPT 4o. 

On the other side are the users of AI who clearly stand to benefit from this development. That's Meta and Apple. Meta's AI model is open source -- they were actively trying to encourage a startup like DeepSeek to make an innovation like this, which will eventually lead to cost savings. Apple hasn't invested much in AI relative to the other big players so the common assumption here is that they made the right call in not throwing hundreds of billions at an AI model that isn't any better than what a startup can do at a fraction of the cost. 

---

Personal take is that overall it isn't that big of a deal and I don't think anyone is all that surprised that somebody figured this out (possibly by stealing OpenAI data, but that doesn't really matter because OpenAI stole most of that data first). With hundreds of billions at stake it's a guarantee that people are going to figure this stuff out. 

None of it gets us any closer to AI replacing knowledge workers -- so maybe 5 years from now we just end up with cheaper AI that isn't much better than the current LLMs. 

[nate82]

In the next 5 years it is probably going to be a bunch of OnlyFans AI bots. 

[homer]

1 hour ago, nate82 said:

In the next 5 years it is probably going to be a bunch of OnlyFans AI bots. 

[nate82]

AI future:

 

[Samurai Bucky]

On 1/30/2025 at 4:42 PM, nate82 said:

In the next 5 years it is probably going to be a bunch of OnlyFans AI bots. 

Or the machines will see us as threats... and... 😉

[wallus]

[yourout]

Tomorrow is going to be a rocky day for the market. 

I expect at least one circuit breaker trip. 

 

 

[owbc]

15 hours ago, yourout said:

Tomorrow is going to be a rocky day for the market. 

I expect at least one circuit breaker trip. 

 

 

The markets mostly see this stuff as negotiating tactics for now. The real damage being done is going to take some time to filter through. 

[Fear The Chorizo]

7 minutes ago, owbc said:

The markets mostly see this stuff as negotiating tactics for now. The real damage being done is going to take some time to filter through. 

Which is exactly what it is - and it's also way too soon to assume what's being done at present is economically damaging.