Tech Stocks Brace for a DeepSeek Haircut, NVIDIA Down 12% in Pre-market Trading

[csendesmark]

That's the beauty of stock trading, isn't it? Someone says they can do same thing better with fraction of costs and this happens.

Or when you overpromise...

People View attachment 381961sees the decline in value on the stock market today, but not the value of the company from three or five years ago? Value or rather valuation on the stock in 2010-2015, 2015-2020, and 2020-2025?

The worrying part is that how sudden and big the fall is.

 

[R0H1T]

LOL
It effects those who hold the shares.
This is why you see headlines like this:
View attachment 381956

And the ones affected knew full well what they were investing in, including the runup to this bubble. If they didn't, they probably shouldn't have invested in the first place!

The worrying part is that how sudden and big the fall is.

You likely need to follow the markets a bit more. This is nothing compared to the pops since 2k or so.

 

[csendesmark]

And the ones affected knew full well what they were investing in, including the runup to this bubble. If they didn't, they probably shouldn't have invested in the first place!

Have you see the movie: The Big Short by chance?

The Big Short (2015) ⭐ 7.8 | Biography, Comedy, Drama

2h 10m | R

www.imdb.com

 

[R0H1T]

Have you see the movie: The Big Short by chance?

I've lived through the 2008 crash, although a few thousand miles away from NYC.

 

[Neo_Morpheus]

I've lived through the 2008 crash, although a few thousand miles away from NYC.

I wasnt so lucky.

And it translated to be out of work for almost 2 years.

Now I wonder if Dear Leader Jensen knew about this, since he has been selling his personal stocks like crazy lately.

 

[Vayra86]

It's an insane valuation anyway.

But yeah, -13% means that NVidia lost about 4 or 5 Intel's this morning.

Insane indeed. World's gone mental

 

[kondamin]

I wasnt so lucky.

And it translated to be out of work for almost 2 years.

Now I wonder if Dear Leader Jensen knew about this, since he has been selling his personal stocks like crazy lately.

Everyone knows AI is in a bubble and a bunch of tech stock is insanely overvalued and that the bubble will burst at some point.
But no Jensen didn't know when the pop will be.

it was to be expected it was going to be post jan 20 and I kinda doubt this is the actual pop

 

[Jtuck9]

Shades of software piracy

"Again, just to emphasize this point, all of the decisions DeepSeek made in the design of this model only make sense if you are constrained to the H800; if DeepSeek had access to H100s, they probably would have used a larger training cluster with much fewer optimizations specifically focused on overcoming the lack of bandwidth."

DeepSeek FAQ

DeepSeek has completely upended people’s expectations for AI and competition with China. What is it, and why does it matter?

stratechery.com

 

[Chomiq]

16% loss for Nvidia which translates to $500 bn.

 

[Bwaze]

Woop, Nvidia better get back to their gaming market soon .

After previous cryptomining crazes abruptly ended in 2018 and 2021, Nvidia hasn't panicked and hurried back to catering to gamers - to what extent that was Nvidia's, AIB or end seller's fault was debatable, but prices in shops remained high for months after the craze for mining cards ended, and it even influenced base cost of next generation cards - that's why we had a beautiful step up from $700 RTX 3080 to $1200 RTX 4080...

 

[dyonoctis]

Tech stocks...

NVDA down almost 14%
TSMC down almost 13%
AVGO down almost 15%
AMD down almost 6%
Intel down less than 0.5%

Really shows what companies are viewed as invested in AI and by how much. Intel not so much or at all.

Meanwhile the fruit company :

DeepSeek #1 on App Store, shocks AI experts, sends shares tumbling

 

[TumbleGeorge]

. Reminder that OpenAI is still losing billions of dollars to this day.

Let's clarify! They are losing other people's investment money, not their own.

 

[Daven]

A lot of tech is down and I seriously doubt it's because of some language model but more because of macro economic forces like Japan upping their interest rates while the EU and UK are going to lower them And the guy who we can't mention also wants to do that (swap trade troubles we had this summer come to mind)

On the bright side, the Euro seems to be recovering a bit ground.

You can tell it's all to do with the DeepSeek news based on which stocks are losing the most value. Nvidia is now down almost 18%. Intel is down a little under 3%. I'm not saying there won't be recovery after the news but the changes are definitely happening because of it.

 

[TumbleGeorge]

You can tell it's all to do with the DeepSeek news based on which stocks are losing the most value. Nvidia is now down almost 18%. Intel is down a little under 3%. I'm not saying there won't be recovery after the news but the changes are definitely happening because of it.

The AI bubble, at least in a sense, has been burst. This fact has not yet led to RUD( rapid unscheduled disassembly or explosion with other words)

 

[dragontamer5788]

Let's clarify! They are losing other people's investment money, not their own.

They are losing Microsofts fake investments of Azure Credits that bought 49% of the company.

And by losing, I mean spending fake Azure Credits. But no one seems to notice or care. MSFT has been avoiding the loss today for some reason.

The levels of fakeness in AI is epic. And people don't even realize it yet. This ain't a bubble pop yet. More people need to realize the incredible depths of fakeness first and far more companies need to collapse over it.

 

[phanbuey]

This thing runs awesome on Ollama, been playing a bit with it locally.

 

[kondamin]

You can tell it's all to do with the DeepSeek news based on which stocks are losing the most value. Nvidia is now down almost 18%. Intel is down a little under 3%. I'm not saying there won't be recovery after the news but the changes are definitely happening because of it.

Ubiquity is down nearly 10% they don't do al that much AI Loads of Tech is being hammered at the moment if I look trough the list. Tech that is hardly connected to AI at all was getting a beating.

They are losing Microsofts fake investments of Azure Credits that bought 49% of the company.

And by losing, I mean spending fake Azure Credits. But no one seems to notice or care. MSFT has been avoiding the loss today for some reason.

The levels of fakeness in AI is epic. And people don't even realize it yet. This ain't a bubble pop yet. More people need to realize the incredible depths of fakeness first and far more companies need to collapse over it.

MSFT core business is O365 and Azure, AI can disappear and their bottom line wouldn't budge

 

[dragontamer5788]

MSFT core business is O365 and Azure, AI can disappear and their bottom line wouldn't budge

The AI powered CoPilot O365 growth?

If CoPilot only costs 50cents/month to replicate instead of $50/month to run, will Microsofts O365 really be able to get the growth they want out of AI enabled Office?

If it only costs 50cents/month to run CoPilot then that's also 100x less Azure needed to run everyone's O365.

And if it costs 100x less to make OpenAI like LLMs, then Microsofts rather sizable investment into nuclear power plants (https://www.npr.org/2024/09/20/nx-s1-5120581/three-mile-island-nuclear-power-plant-microsoft-ai) is looking like a waste.

--------

Or to put it differently: if AI is going to be 1/100th the cost than expected, how much is Microsofts $13 Billion bet on OpenAI worth right now? Maybe only $0.13 Billion if the competitions software really is this much better.

Or maybe these DeepSeek people are lying. But either way, people are asking questions today and reevaluating 365 and Azure and how it relates to AI.

 

[Visible Noise]

Here we go ? You don't need all that hardware to create a good model, evidently. Huang been selling stock for 6 months... He knew ?

If we get a 2000/2 style tech correction.
Looks like the bond market knew, 10y-3m, similar to 2020.

Funny, Su has been selling $6M a month in stock for longer than that. She knew?

Or it could be normal diversification??

 

[mb194dc]

Funny, Su has been selling $6M a month in stock for longer than that. She knew?

Or it could be normal diversification??

View attachment 382031

AMD been trading at 200+ PE ratio, so yeah she probably did as well. At least that the stock valuation was batshit crazy.

 

[lilhasselhoffer]

It's funny. Everybody sees the bubble. Everybody knows that it'll only take one needle to pop the bubble...and everybody still reacts surprised when a country suddenly claims AI can be done cheaper (without really needing all of the specialized bits and bobs) massively impacts companies driven by expensive and resource hungry AI chips.


I'm really glad here, that it's influencing Nvidia the most. They have basically been using AI to inflate everything they do...and the 50x0 series is looking to be selling itself primarily off of AI. With both of those things in the rearview hopefully Nvidia and AMD can start competing and delivering cost conscious hardware...because slapping AI on the thing will no longer let you charge and additional few hundred dollars with no questions asked.

 

[efikkan]

Nvidia's market cap is $3.49T
-13% loss means billion Dollars erased

It's not a loss unless you cash out.
But the big problem with many absurdly overvalued companies(Nvidia, Apple, Amazon, MS, Alphabet, Meta, Tesla, etc.) is that if a tiny fraction of the total shares where put on the market the market value would plummet.
(That's why you should probably not invest directly in any such company, but rather through funds…)

AI and Crypto bubble is going hard now.
And both will remain important, but yes - both are overvalued as of now.

Both are absolutely bubbles, but it's far too early to determine if anything is burst yet (I suspect it's not). But if this "AI" craze isn't calming down anytime soon, we will be eventually facing a burst that would make the Dot-com bubble look small by comparison.

As for the crypto bubble bursting; there have been many small bursts, but there are still way too many fools to keep the next Ponzi scheme going, so I fear it's nowhere near the end yet.

The levels of fakeness in AI is epic. And people don't even realize it yet. This ain't a bubble pop yet. More people need to realize the incredible depths of fakeness first and far more companies need to collapse over it.

It's mostly smoke and mirrors at this point.
But sooner or later investors are going to demand real returns from their massive investments, and when this fails to deliver, that's when it will probably actually burst. The amount of resources pulled into this field is unlike anything I've ever seen, and I believe it's far beyond any realistic scenario for expected returns.

 

[R0H1T]

It's funny. Everybody sees the bubble. Everybody knows that it'll only take one needle to pop the bubble...and everybody still reacts surprised when a country suddenly claims AI can be done cheaper (without really needing all of the specialized bits and bobs) massively impacts companies driven by expensive and resource hungry AI chips.

It's not, let's call it the "emperor has no clothes" syndrome, although someone eventually has to do the deed first.

But sooner or later investors are going to demand real returns from their massive investments, and when this fails to deliver, that's when it will probably actually burst.

Meh, the real big investors, who matter, just shift their portfolios to the next up-and-coming Ponzi scheme! Why do you think nothing's going down among stocks, crypto, and real estate, probably with the exception of (inflation-adjusted) wages

 

[dyonoctis]

The AI powered CoPilot O365 growth?

If CoPilot only costs 50cents/month to replicate instead of $50/month to run, will Microsofts O365 really be able to get the growth they want out of AI enabled Office?

If it only costs 50cents/month to run CoPilot then that's also 100x less Azure needed to run everyone's O365.

And if it costs 100x less to make OpenAI like LLMs, then Microsofts rather sizable investment into nuclear power plants (https://www.npr.org/2024/09/20/nx-s1-5120581/three-mile-island-nuclear-power-plant-microsoft-ai) is looking like a waste.

--------

Or to put it differently: if AI is going to be 1/100th the cost than expected, how much is Microsofts $13 Billion bet on OpenAI worth right now? Maybe only $0.13 Billion if the competitions software really is this much better.

Or maybe these DeepSeek people are lying. But either way, people are asking questions today and reevaluating 365 and Azure and how it relates to AI.

Copilot for 365 is only "strong" because it's bundled with 365, but I doubt that 365 became stronger because of Copilot. It's been steadily growing before AI was implemented. Copilot is pretty much piggybacking ChatGPT—for better or worse. Who else is going to provide a really popular office suite, cloud storage, cloud collaboration and AI assistant? Google? another american using a model that never made waves for being efficient, even though it got an open-source version. And with the the current head of the USA, deepseek will probably get banned before any GAFAM even dare to think about making a switch.

 

[TumbleGeorge]

And with the the current head of the USA, deepseek will probably get banned before any GAFAM even dare to think about making a switch

No! DeepSeek there was a chance of being sanctioned by the previous administration. This is reason to be advertised massively arter their power off.