Has a March 2000 feel to it. CMGI, Webvan, Etoys, JDS Uniphase, VA Linux, all started collapsing. Palantir, down ~ 30% in two weeks. Hmmm…..
AI is promising but it’s in the price.
Discussion
What about the picks and shovels? Do you see Nvidia, ASML, and TSMC taking a big hit? Their sales are mostly supported big Big Tech, which are not only AI companies, unlike Palantir.
Are there a 2000s equivalents to these companies and their biggest costumers?
Yep all of them will get smashed. The equivalent is CSCO which made routers and lost 70-90% of its value top to bottom. In my book I point out that CSCO was valued at 43x revenue at its peak. NVDA also valued at 43x revenue. Coincidence?
In my (illeterate) opinion, where I see the parallelism breaking is that Cisco didn't have Mag7 sized, non-internet companies supporting those sales. It was more akin to a gazillion Palantirs buying the chips, rather than MS or Google, which are not AI companies per se.
43x is a very high valuation, no doubt. My point is that maybe the hit is something like 30-40% instead of 70-90%. Wdyt?
I was about to write this reply, "Cisco was probably the biggest culprit of the dot-com bubble burst..🤔", but Lawrence has already given you the same answer.
But I don't think such a big shock will come to Nvidia anytime soon. It's hard to be free from the CUDA ecosystem in AI development.
Instead, the variable is China. Due to sanctions, China could develop its own AI standards and technology under collaboration with Huawei, Xiaomi, etc. and their AI technology is advancing very quickly. If the DeepSeek shock happens in hardware, Nvidia could (temporarily) become like Cisco.
Gm Larry. Great rip on Tom Woods last week. I sent that one around to a few people. The TFTC was good, but TW convinced me to get the book. 🫡
Ty
if we get a dot com level crash, i don't think bitcoin stays above 50k... whadda ya think?
I kind of do, but expect 60’s in a spike
paging Dr. Optimistic nostr:npub1k7vkcxp7qdkly7qzj3dcpw7u3v9lt9cmvcs6s6ln26wrxggh7p7su3c04l we need Lawrence on your show!
As an AI alarmist, AI has finally started to become something useful to me, which means it should have already reflected in the stock prices. Perhaps, it will gradually rise again while swaying gently in a more realistic manner after sheep shearing.