24Business

2 mega-kap supplies that could continue to tear down


It can be tempting to use shares prices. Sometimes the market goes on board, pushing a certain section to a favorable territory. In other times, a big fall is only the beginning because the story that supports supplies begins to reveal.

Both Nvidia (NASDAQ: NVDA) and Tesla (Nasdaq: Tsla) They are scored while investors press the sale button due to discomfort regarding economy, tariffs and inflation. Here’s why no stock looks like a purchase.

NVIDIA shares, an overwhelming dominant supplier of artificial intelligence accelerator (AI), collapsed about 20% with their 52-week maximum. The results of the company remain impressive, and the demand for its AI accelerators is still flourishing. The NVIDIA data center segment has generated more than $ 35 billion in the last quarter, with profit margins remaining high.

Despite these results, market optimism seems to fade. DeepseekThe Chinese start-up AI that was able to train the top-notch Ai model far more effective than the equivalent of US companies, compensated for the understanding that more powerful models would require an increasing computer horse power. There are also indications that AI companies are hitting the ceiling preferably. Case: OPENAI’s latest GPT-4.5 model, which is a wonderful set and in the best case is less improvement than previous models.

Here is a fundamental question: are there enough cases of use to justify hundreds of billions of dollars of consumption on AI infrastructure, including Nvidia’s AI chips and everything else that enters the data center, per year? More and more, it seems that companies run into the blockages of the path that actually implement AI in useful ways. AppleFor example, he delayed the renewed assistant Siri because the company is supposedly struggling to deliver its promised features. Openai -ov operator, who uses AI agents to perform users’ tasks, called “fragile and occasionally wrong” examination New York Times.

There are many legitimate cases of use for AI technology, but there seems to be a good chance that the industry is greatly transmitted by the potential of this technology. Ultimately, large linguistic models (LLMS) like those of Openii simply predict the following token, such as part of the text or pixel in the picture, in the token current. That’s all they do. There is no real reasoning or thinking, and it is far from how human intelligence works.

The story of the growth of Nvidia depends on the fact that AI has become more and more capable over time. If this does not happen, the huge construction of AI of a computer capacity that is happening can currently be a one -off event that leads to an over -supply. In this scenario, the demand for Nvidia’s ai chips would fall off the cliff, and the stock would probably follow that.



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