Disclaimer: not a professional investor, trader, or finance researcher. I literally just have a mix of US and international index funds and bonds.

These are just my personal opinions and I probably don’t know more than OP… My view of the stock market, especially with short-term changes is… I don’t assume anything to make rational sense, or that the market could really be quite stupid.

Maybe my view was influenced by A Random Walk Down Wall Street… but my main consideration was below:

• So-called “meme stocks” and hype cycles have existed for hundreds of years, much longer before the current LLM hype and the previous crypto hype
• There is a somewhat “successful” strategy of buying a stock to sell it to the next sucker, which would be very prone to the entire thing collapsing

Especially considering that LLM is the current hype (and the hype cycle might be ending), I… imagine just about anything could happen.

More specifically regarding Nvidia though, I mean they’ve already made their fair share of money because their technology was used for both crypto and LLMs so… They already won anyway, so who’s really hurt from their stock dropping a bit?

Because stock traders have no interest in any company or any product. They are all about staying one step ahead of the next trader. As opposed to investors that also have no interest in any company or any product. They are all about the next quarterly report.

This economic system is bullshit.

Fear, uncertainty, doubt. I’ve been buying NVDA through this panic.

Market manipulation. GPUs are still heavily required perhaps even more now that u can run a decent mode l localy

This kind of “active” stock trading is essentially an attempt to predict the future. If you own Nvidia stock and hear about a new disruptive technology entering the market, you might predict that its stock value will drop. So, you sell now before the price falls too much, intending to buy back at a discount once you think it has stabilized.

When enough people do this, it triggers a chain reaction - investors see their holdings losing value and rush to sell before it’s “too late.” But in reality, it’s rarely too late because, more often than not, the price eventually rebounds. The only reason people lose money is that they panic and sell at a loss. There hasn’t been a single stock market crash in history that we haven’t recovered from.

That’s why writing news articles about short-term stock fluctuations is mostly pointless - these movements barely even register on the graph when viewed over the long term.

The market is not rational. It’s mostly based on vibes and feelings. React first, think later.

I don’t think the stock drop was about R1 hype. I think it was about parent company circumventing NVIDIA CUDA and building AI software in GPU machine code directly. Licensing GPU drivers for cloud services is a major income source that has been threatened

In a gold rush, be the guy selling shovels not looking for gold.

OpenAI: we made a LLM look how good it is.
Investors: wow, here is money for more, how did you do it?
NVIDIA: we sold them the hardware to do it. Our hardware is the best, expensive to buy, and had large markups.
Investors: awww yea, time to make money, buy buy buy.

Chinese AI: we made an AI without NVIDIA hardware*.
NVIDIA/investors: wait what?
Investors: sell sell sell

R1 made waves for two reasons:

1. It was cheap to train (maybe because they stole/“distilled” openAi’s training data).
2. It is much more efficient to run (it requires much less processing power to run at a decent speed).

I think number 2 is what hit the nVidia stock so hard. Up until the R1 release, the future of AI development would require more GPU and more power. The R1 release showed maybe that isn’t the case.

Imagine everyone is out driving around in gas powered cars that get 4MPG. Then a new cheaper gas powered car comes out that gets 60MPG. What happens to the price of gas when the 60MPG car is released? Maybe it fluctuates? Maybe it goes down (less gas is needed due to the more efficient cars)? Maybe it goes up as there are more cars on the road (due to the cheaper entry cost)? What happens if the cheaper more efficient car is electric?

Lots of people see the future of AI as being tied to the hardware and have pumped up nVidia’s stock because of that. Anything that goes against that theory will likely let some air out of nVidia’s bubble.

If you were supplying huge amounts and often specified products on contract, you can make a lot of money. DeepSeek just made a lot of the quantity and specifics much less and much more generalised.

I have a good amount of confidence they will do what they did in the crypto boom and pivot to small deployment as the possibility of local LLM’s becomes more popular, people will be buying and making dedicated local machines. Now they also have more competitors in this space as the chip embargo to China has caused them to roll their own and so in regards to AI processing Nividia is no longer the only kid on the block.

The stock market is crazy and it doesn’t always act rational. Now that I said this, I think the reason is more a question of Chinese vs US technical superiority. In theory, China has no access to the high technology AI chips from NVIDIA, due to sanctions. This must mean that Deepseek was developed with cheaper chips, and NVIDIA chips are not necessary for training LLMs.

Pretty much like the other comment. It was thought that we still needed a lot of AI processing power to advance AI before it became more efficient. Now it turns out R1 does what o1 does but with way less. We’ll still need nvidia so I think the stock will rise again. Besides, these are just large language models and are still a ways away from actual AI. I think there will be a second bubble at some point.

stocks are a confidence game. china showed you can do a lot more with less and i think there was a pretty widely acknowledged awareness that there was already a bubble… now i’m not a fancy economist but this is what i’ve gathered