$NVDA $12k short
NVDA crash has nothing to do with deepseek
Deepseek is actually only the catalyst and not the cause. It's the straw that broke the camels back. When is the last time you saw a public company in the top 10 valuation in sp500 have a net margin of over 50%? Never.
Also the growth projection that is priced it has 2 assumptions:
Net margin of 50% (gross margin of over 80%) going forward.
The rate of purchase will increase. Not only will people need to keep buying, they will need to buy more than last year, which saw companies fomo into datacenters.
It's not that deepseek will cause companies to just stop buying GPUs. It's that companies are not going to buy exponentially more GPUs indefinitely. Especially when they've left so much on the table in terms of software optimizations.
Even if companies still fomo hard into GPUs and datacenters at the same rate as 2024, NVDA stock will fall, because there's no additional growth.
If people buy more, but the margins get tighter as apple, meta, google come out with their own chips or tpus, Nividia stock will fall.
If sales go down and margins get tighter, it's doomsday for NVDA stock. Like -50%+ type of collapse
NVDA crash has nothing to do with deepseek
Deepseek is actually only the catalyst and not the cause. It's the straw that broke the camels back. When is the last time you saw a public company in the top 10 valuation in sp500 have a net margin of over 50%? Never.
Also the growth projection that is priced it has 2 assumptions:
Net margin of 50% (gross margin of over 80%) going forward.
The rate of purchase will increase. Not only will people need to keep buying, they will need to buy more than last year, which saw companies fomo into datacenters.
It's not that deepseek will cause companies to just stop buying GPUs. It's that companies are not going to buy exponentially more GPUs indefinitely. Especially when they've left so much on the table in terms of software optimizations.
Even if companies still fomo hard into GPUs and datacenters at the same rate as 2024, NVDA stock will fall, because there's no additional growth.
If people buy more, but the margins get tighter as apple, meta, google come out with their own chips or tpus, Nividia stock will fall.
If sales go down and margins get tighter, it's doomsday for NVDA stock. Like -50%+ type of collapse