NVIDIA's $5 trillion market cap is a big problem, with a bubble that could burst, causing major trouble for the U.S. stock market next year!
On November 5th, U.S. media stated: "The logic behind NVIDIA's $5 trillion market cap is based on 50 billion dollars in orders locked in from Q4 this year to Q4 next year. If fulfilled, it could support a $25 billion annual profit. However, the bubble risks are significant. If the NVIDIA bubble bursts, it will cause big trouble for the U.S. stock market. The blind rush by U.S. tech giants to grab cards is not sustainable, and they will shift towards cost-effectiveness of computing power. The inference card and ASIC markets will be taken over. Google's TPU and Microsoft's Maia chips are expected to replace low-end cards on a large scale next year. TSMC's CoWoS capacity will double next year, with more incremental capacity given to competitors, leading to a sharp decline in China's market share, accelerating domestic substitution. IT shortages will not last long. Next year, GPU demand will range from 6.5 to 7 million units, while supply exceeds 8 million units. Prices are expected to fall in the second half of the year, which may lead to a significant increase in performance but stagnant stock prices. By 2027, revenue and profits are likely to plummet, putting pressure on valuations."
[Witty] NVIDIA's valuation is equivalent to India's GDP, far exceeding Germany and the UK, which is quite exaggerated. It is not impossible for it to become the sword of Damocles over the U.S. stock market. NVIDIA is just an AI illusion blown up by order bubbles in the U.S. stock market. Its weight has reached 8.5% of the S&P 500 index, becoming the lifeline of the U.S. stock market's ups and downs. Once this bubble bursts, it will cause a systemic shock. The so-called $50 billion in orders is essentially irrational stockpiling by technology giants, eating tomorrow's food today. With TSMC's capacity doubling next year and order distribution diverted, Google and Microsoft's self-developed chips will take over the market. China's market share will drop sharply, and with the reversal of supply and demand, GPU price cuts are inevitable. At that time, the divergence between performance and stock price will reveal the illusion, and the sharp drop in profits by 2027 is certain. This is not just the decline of a single company, but the bursting of a bubble that has been tied to the U.S. stock market. The狂欢 of Wall Street will eventually have to be paid for by the market. You have to pay back what you owe sooner or later!
Original: www.toutiao.com/article/1847938440833028/
Statement: This article represents the views of the author.