This stock is a great example of invest in stocks where you have strong knowledge.
I saw pallets of h100s shipping that were worth 100s of millions each pallet (each card is $40k and you can fit a lot on a pallet) as someone working for a company buying these and knowing that many other companies were doing the same (we have 12+ months of back orders with nvidia alone).
I invested last year at ~$250 when redditors we're posting that "Nvidia is the best shorting opportunity" without any of the knowledge of the market.
It looks like it's now going above $1000 and still going up.
Invest in things you know intimately folks. Also do the opposite of Reddit.
On the other hand, my uncle lost a fortune investing in a wireless networking company in the 00s. He has worked an entire career in networking and has contributed to bleeding edge systems in the area. This company had excellent tech, but ultimately didn't succeed. A lifetime of savings kaput.
nvidia's p/e is also insanely high. "Wow they sure sell a shitload of product" isn't necessarily enough to justify the price. There are highly profitable companies that nevertheless see their stock price turn around.
>> There are highly profitable companies that nevertheless see their stock price turn around.
This happened with a local sports drink maker. It was branded for kids, more healthy, less sugar then Gatorade and energy drinks. Company took off, went public, stock went through the roof for about two years.
Blue skies, everything coming up roses, lots of articles in the local business mags and websites.
Then their supply chain dried up - a precursor to the pandemic and the founder even said in a startup presentation they were the canary in the coal mine and one of the first businesses in the state to suddenly have their product, packaging, and materials all just evaporate in a matter of weeks. Suddenly they couldn't get product into stores, stores eventually pulled their placement and within three months they were bleeding money horrendously while scrambling to find replacements. Something they were already working on, but soon enough every supplier they'd call had the same answer, they too had no means to ship stuff out and they too were dead in the water.
Then two months later the pandemic hit in full force and it was the death knell for the company. Delisted, and bankrupted, they closed up shop about 3 years after being a "can't lose" stock and company.
My family have all invested heavily in Nvidia and they're making good gains now, but I'm seeing the same thing you are - this can go bust very fast if Nvidia doesn't manage this really well.
The vast majority of financial issues would be prevented simply by following Buffett's advice to not lose money.
It's tongue in cheek, but he's correct. Suppose you have a great idea for investing. It doesn't matter how good it is... don't put your life savings into it.
If you do this you will make money. Investing is mostly about not losing money.
Counterintuitively, when I focus hard on not losing money, I become too risk averse, I fail to take appropriate risk, and my returns are stuck in the low single digits.
I can't count the times I sold great companies like Apple and Netflix and Tesla years too early because I was afraid to lose money and wanted to "lock in" a 50% gain.
By focusing on potential for high returns instead of not losing money, with a diverse portfolio of assets that don't correlate perfectly with each other, total returns are much greater even though individual bets can show big losses for months or years.
This is where a diversified portfolio makes sense. It's completely fine to take a "big bet" on what would amount to a years worth of returns/cash investment every now and then. But many great opportunities have already been priced appropriately, so the extra concentration of risk doesn't yield a great return.
If one was to be able to simply select the 50% of companies which perform better than the rest of the field. You would be in good shape.
THIS. As much as I wish I put all my money into NVDA when I bought it, I’m happy to have a lot of diversity in high tech IT. The daily swings are not nearly as bad and aim not biting my fingers all day long.
Sure, but not diversifying is also one of the most efficient ways to go broke. Which is something that diversifying will make much more difficult.
Also, full baloney. I was not diversifying for many years and it indeed made me great money (thanks MSFT). But when I started getting spooked and diversified, guess what?
I still ended up doing pretty well, even if it wasn’t on the same level as before (look up MSFT share price change between the start of 2017 and 2021). But it was so much safer and reliable, going broke wasn’t as much of a concern, and I knew I was much more secure in case of a downturn. Winning on risky triple digit percentage gains feel great, but I would rather take much safer diversified 50-60% gains over a 3 year period instead.
Not saying that those 50-60% gains are even close to what I would expect from truly safe plays. But safety and risk is a spectrum, and you have more choices than just “fully diversified super safe index funds” and “all-in on one single ticker.” You can adjust and make things diversified and safer than all-inning on a single ticker, while still maintaining some amount of risk that would allow for outsized gains.
I am not saying anything that you are attempting to dispute here... Your logic is sound and you can get rich doing it. But you won't get wealthy. And getting wealthy does carry higher level of risk, I would think that is common sense.
To me diversification goes against all logic because the rule #1 of investing should be that you as a investor KNOW what you are investing in. You can't tell me anyone investing in say S&P 500 has done extensive research on each every of the 500 companies. All they are hoping for is "hey, these are 500 biggest companies in the World, imma just put my chips here and hope for the best - history tells me that is probably safe bet."
On the other hand, you can do full-on research into a single or handful of companies and then put your chips there. You can't tell me that putting money in Magnificent-7 say 5 years ago was any riskier than putting money into S&P 500... and yet you could have gotten REALLY wealthy with the former and quite rich with the latter...
> To me diversification goes against all logic because the rule #1 of investing should be that you as a investor KNOW what you are investing in.
I largely agree with what you say. However, diversification has degrees, and it doesn’t necessarily mean that you gotta spray and pray across the whole range of S&P500 to be more diversified than the “all-in on a single stock ticker” strategy. Examples:
* All in one single stock ticker - no diversification
* All in a few different stock tickers that are in the same industry sector (that you are knowledgeable about) - diversified businesses, but not diversified across industries
* S&P500 spray and pray - largely diversified
Option #2 is imo the solid middle ground, and it gels perfectly fine with your idea that you gotta know what you invest in. Yes, it is riskier than option #3, because it doesn’t account for the scenario where the entire industry sector experiences a downturn. But it is still diversified, still has the potential to make you wealthy, and is not nearly as risky as option #1 (but also not as capped as option #3).
Wealthy folks aren't diversified, because they have _control_ (and knowledge) over their particular investment (ie company founders).
Stock investors do not have the luxury of control, thus they must diversify.
And generally that's what the wealthy do. They go all-in on their own company, grow it to incredible returns, then use those returns to be invested in a diversified manner to grow further. Other stocks, realestate, angel investing, etc.
Most of the billionaires are like this. Or if you're Warren Buffet, you invested in a diversified manner, because he didn't control the companies he owned.
> Or if you're Warren Buffet, you invested in a diversified manner, because he didn't control the companies he owned.
you should check out Buffet's portfolio - he's not very diversified at all... If that was your portfolio someone would tell you you are nuts/gambler/...
It's impossible to lose money you don't bet. I don't understand this mentality. If you have a 30k portfolio... fine bet the 5-10k... even if you lose it you're fine.
> I can't count the times I sold great companies like Apple and Netflix and Tesla years too early because I was afraid to lose money and wanted to "lock in" a 50% gain.
Ah the sunk cost fallacy. Having an exit strategy is important. Never beat yourself up for an appropriate exit strategy.
FYI: This isn't a case of the sunk cost fallacy. The sunk cost fallacy involves continuing an investment due to the amount already invested, regardless of future potential. What you're describing is more related to regret aversion and hindsight bias.
At the same time, Buffet and Munger also think that diversification is dumb if you know you have a good stock, putting all your eggs into one good basket, is better than putting your eggs into multiple bad baskets.
Remember Zoom trading at a P/E of 400+ during the pandemic? They've lost 85% of their value since then, despite growing their earnings about 3-4x in 4 years and becoming the namesake for an entire generation.
Insanely high PE? On earnings day? Isn’t today the day that it adjusts for this new amount? I still don’t find the forward PE to be that bad for the best tech company in the world right now.
True. But another piece of knowledge about Nvidia is its competitors are waaaaaaaaay behind. They stand peerless.
Another piece of information is that CUDA software was provide free or cheaply to Universities doing LLM research I think. And the software is easy to use.
> its competitors are waaaaaaaaay behind. They stand peerless.
Its competitors are only way behind when it comes to software support. The hardware coming out of Intel and amd is, especially for its price, very capable. Given how much money is being invested in AI right now, I don’t see Nvidia’s moat lasting more than a few more years.
But every big tech compoany is handing nvdia billions a year now. Its not just amd working on amd's software anymore. Now theyve got armies of open source developers from around the industry ready to save their company a boatload if they can get the software working.
The number of companies that wish they were a SW company rather than a HW company is very long, and despite all their efforts once they get to a certain size the die is cast.
Getting good AI talent now is very costly. HW engineers are cheaper.
Nvidia has more SW than HW engineers for a reason and the transformation for that started slowly almost 2 decades ago and accelerated 2012 with AlexNet, the first public showcase of a NN running on GPUs. Jensen saw what that meant and transformed the company from that moment focusing on DeepLearning.
Nvidia isn't waiting for a market to develop but prefers to create markets by tackling hard and complex problems. It seems that Nvidia got lucky with AI but it was a long lasting preparation for Jensen.
We've been hearing that line for years, but HN comments are a valuable source of info on where NVDA might go in future. You're the only poster here I could name who is strongly pro-AMD in the AI space. Everyone else seems to put their toes in the water in the hope of being able to get an edge by avoiding NVIDIA's monopoly prices, immediately gets burned by trash software quality and runs away screaming "never again".
I only dabble in AI stuff but have decades of experience doing quick surface-level quality checks of open source projects. I looked at some of AMD's ROCm repos late last year. Even basic stuff like the documentation for their RNG libraries didn't inspire confidence. READMEs had blatant typos in, everything gave off a feeling of immense lack of effort or care. Looking again today the ROCrand docs do seem improved, at least on the surface, I haven't tried it out for real.
But if we cast the net a little wider again, the same problems rear their ugly head. Flash Attention is a pretty important kernel to have if working with LLMs, maybe I'd like one of those for AMD hardware?
We're in luck! An official AMD repo with flash attention in it, great! Except.... the README says at the top:
Requirements: CUDA 11.4 and above. We recommend the Pytorch container from Nvidia, which has all the required tools to install FlashAttention.
Really? Ah, if we scroll down all the way to the bottom we can find a new section that says "AMD/ROCm: Prerequisite: MI200 & MI300 GPUs". Guys, why not just rewrite the README, literally the first thing you see, to put the most important information up front? Why not ensure it makes sense? It takes 10 seconds and is the kind of attention to detail that makes me think the rest of your work will be high quality too.
Checking the issue tracker we see people reporting that the fork is very out of date, and that some models just mysteriously don't work with it due to bugs. These issue reports go unanswered for months. And let's not even go there on the hardware compatibility front, everyone already knows what "AMD support" really means (not the AMD cards you might actually own) vs what "NVIDIA support" means (any device that supports the needed CUDA version, of any size).
I would never try to defend AMD with regards to them needing to catch up. Even talking with executives at AMD, neither would they. Nobody is trying to pull a fast one on this.
What has changed for certain, is their attitude and attention. I just got back from Dell Tech World. Dell was caught off-guard with this AI thing too. It is obvious the only thing that anyone is talking about now is "ai ai ai ai ai ai".
Give them a bit of time and I think they will start to become competitive over the next few years. It won't happen over night. You won't see README's fixed right away. But one thing that is for certain, they are all at least trying now, instead of pretending it doesn't exist.
Whether they will be successful or not, is yet to be seen. I wouldn't even know how to define successful. I don't think anyone is kidding themselves about Nvidia being dominant. But, I'm personally willing to bet on them selling a lot of hardware and working on their software story.
It's great that you're pushing AMD forward, no doubt about it! And I'm sure they'll make good progress now. Like I said, the ROCrand repository seems to be in much better shape now.
What is telling for me is that ROCm itself is on regular cadence updates. Not just small updates, but actual meaningful fixes and improvements.
Not only that, but it is all being done in the open, unlike their competition. Hotz demanded some documentation, they provided it and he still complained. Some people just can't find happiness.
Now, whether or not I am pushing them forward is yet to be seen, but at least I'm trying. By positioning myself as a new startup who's trying to help... that will easily garner all their support as well. As I said in another comment, why not let them try too?
First off, it’s a HW/SW solution and things like CUDA/NCCL/etc make a HUGE difference.
Second, the token/watt ratio of every other option is nearly an order of magnitude difference in real world tests. When you add in custom silicon like moronic Grok/Dojo and you see that there aren’t really any close competitors when using custom spins. That is money down the drain IMO. Best bet for most enterprises is to buy 25% AMD and 75% H100 if they can get it.
I think Blackwell is potentially a long term generational problem due to power limitations in most data centers for now.
Isn’t that like saying Apple’s iPads will only maintain a moat for a few more years because MS Surface tablets match in hardware and “only” lag in software? My general point is that the core software (and the software ecosystem built around it) is half of the product. NVIDIA isn’t going to stand still either.
You ignore a very important fact which goes above any cost and that is security and stability. A fast unstable or unsafe system belongs into the trash can in any enterprise.
B2C will first ask about security and stability.
Do you think AWS, Azure and GCP are the cheapest cloud offerings? Of course not, but why do they dominate cloud computing in B2C while price gouging everyone?
Because they offer something beyond price and that is security and stability as well as a reliable partner. They also offer support and capacity on a level which a startup CSP will never be able to offer.
This is also the reason why all AI accelerator competitors won't be a competition for Nvidia.
To beat Nvidia it's not only about beating CUDA, it's about beating Nvidia Enterprise AI suite with it's security offerings and support options. But enterprise business level SW is a level where AMD and others will never go to and will have to rely on Big Tech like MS, Amazon and so on to do that for them. But why should they if they have in-house solutions? Big CSPs developing their own AI accelerators shows you that they understand Nvidia's business model and are trying to compete head on because they understand that Nvidia is attacking them at enterprise level with AI enterprise solutions. And of course any enterprise using Nvidia enterprise SW will automatically use Nvidia HW.
Once SW is more spread than HW then it dictates where the direction goes. If MS releases Windows 12 only for ARM then Intel and AMD are immediately screwed and they can't do nothing about that. No enterprise in the world cares if their CAD system runs on x86 or ARM as long as it can be used for the intended use.
You make a lot of assumptions about what I understand.
If I am in charge of a data center I had better understand the impact of security and stability as well as the qualities of vendor relationships on my costs or I probably won’t be in that role very long.
You, on the other hand, apparently have never managed an enterprise ISA transition, or even cross-compiled software. The idea that Microsoft would just do that and that it would work is naive in the extreme. CAD software is compiled first for an architecture, and then generally within an operating system. It is all interconnected and interdependent.
I don’t really see the software ecosystem catching up that quickly is the thing. Sure, we have some support for hardware like Google’s TPUs and Coral but the field’s practitioners and researchers are oftentimes so behind the curve of general systems work like dealing with the nuts and bolts of libraries and package management that anyone trying to compete against NVIDIA will need to spend a lot of time investing there rather than yet another group of ML engineers that shudder at the thought of packaging and distributing their software to the public and supporting frameworks for years with partnerships and continued investments doing a lot of work that’s basically toil and extremely undesirable for said ML engineers.
Isn't CUDA basically hidden behind pyrorch and others?
I know that it's touted as the key competitive advantage, but it seems to stem from the fact it actually works, unlike others.
Still great advantage, but not a lock in. If competitors get their act together, couldn't they just replace CUDA with another API, all hidden somewhere in the sw stack?
For training workloads? Yes. For inference? Nope. Their competition is very technically strong there. The lack of market attention (pun intended) is utterly baffling there. And before someone inevitably chimes in about CUDA - for inference you don’t need it. Ask Google for example.
The forward PE is not insanely high in today’s market, and this is the PE figure investors care about. It’s not “oh they sell a shit load of product” it’s “oh sell a shit load of product with ridiculous high margins and they’re growing rapidly YOY”. Will NVDA correct at some point? Of course.
It's more that a high P/E means that the company itself needs to make a lot more money for the long-term shareholders to not be holding an investment that doesn't pay off in the end. You can still make plenty of money speculating on it as it's going up (so long as you sell), or short-selling it as it's going down, but generally speaking it's a sign that the business is being valued the assumption that it will grow by a lot, which is riskier (for example, Tesla's valuation more or less requires that they eventually monopolise the car market or enter and dominate some similarly large market. You can make an assessment yourself as to whether that's likely to happen if you want to make a prediction for how Tesla's value is likely to change over the long term).
A company with a high P/E is by definition not making much money for its shareholders, relative to the size of their investment.
Unless you mean that the share price may appreciate. That's absolutely a thing, but it's a dangerous game. Of course plenty of people have made fortunes this way; people have also lost fortunes; I think the advice to steer away from such companies is basically a statement about risk.
Or it means that earnings are lagging the price increase. They just announced a 629% increase in earnings from a year ago (461% non-gaap) and it seems to be accelerating.
You need to “get it” because it’s really important.
We’re all in here arguing about PE ratios of tech companies reaching 100x. Is that too much? Who knows. For the best tech company in the world? What is the limit?
But for other companies like Tesla, their PE was once 1000x. That’s crazy town.
PE is the first number you should use for comparing two stocks to determine value vs risk.
People get too caught up on the listed/current PE, but what matters is forward PE. The stock market is about the future, and growth company PEs as listed are always going to be behind.
High PE companies arent making tons of money for their shareholders, thats what a high PE means. Theyre making less per dollar of share than the average company
Some people care about PE. Some people don’t. It’s just one metric that represents past performance. If it’s high, the market believes the stock price will go up.
No, P/E being high means the stock market thinks the company's income will grow by a lot in the future. The price may go up or down as those expectations for the future change (a high P/E stock can announce record profits and have the stock go down, if in fact the stock was being priced on the expectation that the profits would be higher than announced).
I know nothing about stocks. But if a similar situation were to happen again, how can you tell whether or not the surge in demand is already "priced in"?
Simply knowing that demand for a product has increased - even increased massively - surely can't tell you that the stock of the company that makes that product is going to increase in value, without also knowing whether or not that increase in demand is already reflected in the current price of the stock
As a rule of thumb it is never priced in when a company suddenly has tremendous acceleration in revenue and profit growth. Wall Street is good at forecasting businesses with a stable growth trajectory. Wall Street is way too conservative at inflection points because it’s too embarrassing to be wrong (in either direction).
Meme stocks are always priced in as well, since the investor speculation far outweighs any effects from irrelevant things such as how the company is actually doing in real life.
The easy answer here would be to look at analyst estimates. If you notice nvidia selling 20 billion in H100s and the consensus revenue is 10 billion, then it's probably not priced in.
But that's been known for months now. At one point a bloomberg podcast mentioned in passing that nVidia inventory now has a lead time measured in months. Which kinda sounds like the makings of a bullwhip effect induced bubble[0]. Everybody wants inventory now, so they put in massive orders, hopefully get some fraction of what they asked for, and if they happily get too much they can, in theory, easily sell their surplus into the market. Think about how many "AI platforms" boil down to "we have GPUs!"
_If_ this is the bullwhip scenario, then it's basically a gamble about how many million cards nVidia can ship before their own short supply bubble bursts. Or the AI bubble more generally.
Exactly. Very few people have actual, factual knowledge about whether Wall Street traders analysts are right or wrong about some company performance metric. They say "they know" but it's just hunches and gut feelings. The people who actually know for a fact are insiders and cannot legally trade on the knowledge. Everyone else are just gamblers who think they "have a system" that works.
The only answer anyone can give you with total truth is that there is no way to know for sure (without having very secretive insider knowledge, such as being a CEO who is about to make a big deal). There's a reason why managed funds in the long term don't outperform index funds.
Was there really anything "intimate" about the knowledge you possessed? You were on the other side of a large market with apparent high demand and a supply chain that can most easily be described as "extremely monopolized."
> when redditors we're posting that "Nvidia is the best shorting opportunity" without any of the knowledge of the market.
It looks to me like it was done with real knowledge of the overall market outside of single pallet moves and understanding of the risky position Nvidia put themselves into to capitalize on this. The bet either paid off completely or it severely tanked the company while crippling their consumer product division.
Nvidia took a top heavy position and bet the farm that TSMC could and would keep up with their demand. Was that the bet you understood yourself to be taking when investing in them?
The 40k h100s have ballpark comparable transistor counts to their 1k gaming gpus. I didn't see concerns with production. The gains came from the massive margin increase.
Seeing pallets shipped out the door seems like a far cry from knowing something intimately. To know the business intimately would likely take knowledge of not only the AI industry but also understanding what customers are using these machines for, are the sales sustainable, etc...
Your anecdote is just survivorship bias and you are one of the survivors.
Curious if you've closed out your position yet? The tricky thing about the market is both entering and exiting at the correct time.
I have strong knowledge of this is space and don't invest in it exactly for that reason. LLMs are great, but the hype is greater, and I personally don't want to have my income and my investments correlated.
NVIDIA may be selling a lot, but their P/E ratio is nearly 80, so that price isn't fundamentals alone. All we need is this ages equivalent to "perceptrons can't XOR" and there will be a fast correction.
This could go on a long time and I wouldn't be surprised if NVIDIA doubled over the next few years. After all crypto is still doing well despite everyone more or less agreeing it's a scam. I can also imagine world were something is revealed in a few months and everyone flees from "AI".
The only thing I know about the stock market is arbitrage theory still holds, and the future value of any stock tends to be it's current price + risk free rate over time.
I saw NVIDIA as the next big thing due to AI 6 years ago back when their stock price was dictated by gaming and crypto. I was working for a hyperscaler and I was confident they were undervalued, along with Microsoft and AMD. And then I sold all 3 during COVID because I realized the exact problem you are saying - I had no idea when to sell and ultimately I was happy with my gains. Whoops I guess.
Now all serious investing money just goes into index funds and I don't have to worry.
Apple had a net income of ~$100B last year (and will in all likelihood have a similar amount this year) and a market cap of ~$3T.
Nvidia is likely to have a net income of around $50-60B this year and has a market cap of around $2.4T.
It doesn't take that much growth being priced in for the stock to suddenly seem reasonably priced.
Yeah buying NVDA right _now_ could be the equivalent of buying TSLA at $400.
Since literally everyone and their dog now knows AI is the next big thing and NVDA is selling all the shovels to the miners, the contrarian in me (don't believe reddit OR HN) suggests its a good time to stay away.
There should be growth stocks buried in the Russell 5000 somewhere that would be much better bets at this point.
I work at the intersection of power and AI. Buy utility stock. The bottleneck for AI expansion will not be installed GPUs, but the electricity they need to run. We are in an energy crisis and not many realize it yet. Virgina, Texas, Arizona and soon to be Ohio and Georgia are out of generation capacity and the data centers are like locusts.
This is very interesting to read. I am in Australia and quite interested in this investment thesis although I’m not an investment professional. What are the best things to read about the demand Supply mismatch?
Been on this thesis for the last few months. Any companies you think are interesting or have potential to grow during the energy crisis? Looking for more prospects to evaluate.
was it not fairly obvious that all the big software companies were going to ramp up on training AI models? the writing was on the wall, some people just didnt read it.
The million dollar question (or trillion dollar question I suppose) is for the upcoming quarters - will there be pallets of h100s waiting shipment, 2x pallets of h100s or 10x pallets of h100s... or have all the pallets are shipped for the time being.
Has demand saturated while downstream AI engineers tinker on actually profitable use cases or is it going to keep growing exponentially.
Probably most stock price models assume at minimum linear growth for the next 5-10 years. But if the future reality is that it nearly plateauing and will likely drop off...
The pentium II was 233 MHz, not 33, but sure. The problem is, if that metaphor holds, we're so vastly far away from "the future" that it's impossible to predict what it looks like. Just for example, NVIDIA's chips kinda suck for inference. Vastly overprovisioned.
It's like the folks who were saying "the internet is growing rapidly, Cisco powers the internet, therefore Cisco will grow as rapidly as the internet" in the late 90s. Oops.
I think the challenge is to determine whether or not AI applications are generalizably useful to all of society as general purpose PCs and smartphones or if they are more narrowly focused like crypto applications.
Is that not insider trading? I had opportunities to buy stock in companies that I knew my employer was about to do big business with, and could have profited handsomely, but was advised that it was at the very least against corporate guidelines
If you work for NVIDIA, it is insider trading. If you saw the pallets in a truck at a gas station, it’s not. In the wild, it’s no different from Wall Street making trades based on strip club attendance or by flying drones near Tesla factories.
It CAN be considered insider trading then. If you work for company A and are aware of a large monetary deal between company A & company B that is otherwise not known to the public, if you trade company B’s stock, not only can it be considered insider trading, it may even violate company A’s internal policies which can get you fired.
Not in the US. “Don’t trade on any information not known by everyone” is a much more strict version used in other countries. That stricter version destroys the incentive to short selling research firms.
An “insider” is an officer, director, 10% stockholder and anyone who possesses inside information because of his or her relationship with the Company or with an officer, director or principal stockholder of the Company. Rule 10b-5’s application goes considerably beyond just officers, directors and principal stockholders. This rule also covers any employee who has obtained material non-public corporate information, as well as any person who has received a “tip” from an Insider of the Company concerning information about the Company that is material and nonpublic, and trades (i.e. purchase or sells) the Company’s stock or other securities.
This policy also applies to your family members who reside with you, anyone else who lives in your household, and family members who do not live in your household but whose securities transactions are directed by you or are subject to your influence or control, as well as trusts or other entities for which you make investment decisions.
I heard about similar NVDA order backlogs when doing a 'I did this build with your salesman and the card doesn't fix, please let me get one that does' of a video card at Micro center during one of the crypto pumps.
The employee claimed a 6-12 month backorder on high end cards.
I didn't do anything with that info, but I'd I had, would not be insider trading.
Knowing things about another company that your company has a relationship with is not included in any of that. Those are all rules about tips from employees of the company with the security being traded.
As usual, the answer is “it depends”. Observing too many people are buying the same product at a supermarket, is not insider trading. Observing product sitting on shelves for far too long, again not insider trading. Hearing your supervisor say that they’re hearing a product will no longer be stocked after the current contract is up, definitely insider trading.
if "pallets of H100s shipping that were worth 100s of millions each pallet." and "12+ months of back orders with Nvidia alone" are not public information, then in my mind that is insider trading, especially those backorders.
They're not talking about their employer's actions moving the stock price, they're talking about the basic industry knowledge that everyone else is doing the same thing. I (probably) don't work at the same company and I had access to exactly the same information.
The market is too fickle to rely on your own experience and knowledge. Remember, there's plenty of experts in the tech industry whose sole job is to trade tech stocks, this information is baked into the market. It's far more likely that you were lucky, rather than had some super special inside knowledge compared to others. The only (semi)reliable stock is an index.
It is possible to do well, even with insufficient information. Look at jet aircraft that are routinely landed without the ability to see the runway -- long before GPS was available. This is called flying with instrument flight rules.
Everyone only has a fraction of all the information. And you have to be satisfied with big returns in which you wonder, "how much of that was luck?" And, the occasional big losers. I can say I don't have 'the formula', but I'm returning 15% for over 20 years... knowing there is a ton I don't know. Which is something you find out when you are a patent attorney, and innovations come out of nowhere while MOST 'innovations' also lead nowhere.
Not insider trading from SEC. You can absolutely use material non-public information your own company collects. The entire short selling industry is based on this.
It might be a violation of your company’s policy, but unless your company has been given explicit access to material non-public info of nvidia (e.g. you work for their accounting firm), there is no SEC risk here.
NEVER assume that information learned because of your job is shielded from insider trading, even for a completely different company. From ten years ago, here are two data analysts from Capital One who thought they could use the data from credit card transactions to jump the gun on quarterly earnings reports for retail stores. Never traded Capital One stock. Didn't matter - SEC hammered them.
I usually side with the SEC, but this is so devoid of information in a way.
Should the SEC come after someone then, if they stood outside major retail outlets across a city, surveyed buyers, and made profitable buying schemes that way?
How about analyzing satellite images of warehouse shipments? (which is a thing that is being done today)
Not everyone has access to either of those things, yet as far as I am aware, the SEC does not consider that illegal.
Why would aggregating credit card transactions be any different, honestly? Capital One already uses that information to direct its own business, much the same way.
I wish this SEC would have made it clear why this was a problem.
The only leg the SEC had to stand on in this complaint is a very specific clause from the employee agreement that says not to use this information for trading.
No, it has to be explicitly outlined in the employee agreement if you’re not allowed to share some of the information. “Duty of confidentiality” is not a magic thing that just exists.
All of the cases where people have been busted (e.g. the capital one credit card transactions) are because the SEC has an exact quote from the employee agreement that says something like “don’t use this mega database to do trading”.
If your employee agreement doesn’t have something explicitly barring you from noticing racks of incoming inventory and using that information, then it’s not insider trading.
You are wrong. The duty of trust doesn't even require a formal contract, girlfriend/boyfriend qualifies for example. Also see point 4 from https://www.bloomberg.com/opinion/articles/2022-01-26/watch-... for example where there is no discussion of explicit duty of confidentiality; it is presumed in an employment relationship.
"My company bought their product" does not sound like material non-public information. It certainly doesn't sound material (and for this reason I also think it was sheer dumb luck that the investment paid off so handsomely, rather than intimate knowledge of the business).
It's absolutely treated as insider info by policy where I work. It might not rise to SEC enforcement action, but if caught you probably won't have a job anymore...
Why would your employer care what you invested in? How would they be impacted if you bought or sold public stock of someone they interact with? Would they care if you traded Google, Apple, Microsoft or Oracle?
One possible explanation is that we require this of our vendors and suppliers, and the easiest way to achieve that is by making it reciprocal.
The actual policy wording:
> No Third-Party Trading or Tipping. Do not trade in the securities of another company when aware of material nonpublic information about that company in connection with your work at ******. This includes trading in the stock of ****** suppliers, manufacturers, vendors, or customers, such as cellular network carriers or other channel partners. You must also not tip material nonpublic information about another company.
This can be good advice, except that it tends to create a correlation between one's portfolio (unless you're shorting) and one's profession. So if your industry tanks, you could find yourself laid off and with a slashed portfolio.
Exactly. I invested in NVDA when it was $21.85, after I saw a demo of Deep Learning for the first time. This was long before LLMs and generative AI. I was blown away by how you can upload any random image and it would tell you what is in the image. Then I learned about NVDA and CUDA and how DNNs leverage them and decided it would be a good investment.
I agree. The OP is scary. Always run away when Internet stranger tells you about their stock market success. It is the same as a cab driver telling you about DotCom stocks in the late 1990s!
I agree here. Bought some well over a decade ago because of their dominance in gpus. Bought some more around 2017 after my company wanted to get access to some gpus on AWS and we couldnt because AWS couldn't get their hands on enough- and the crypto boom was driving demand. Bought some more again about a year ago when I saw companies large and small on the ai train- is not just openai and Goog/fb/apple.
Even if the stock falls 3/4 I've had an incredible return and I just don't see the ai hype dying down soon, though im always trying to feel out that inflection point. I'm not super stoked about the ability of AI to really be monetized that well in its current form, but I'm happy to be invested in the picks and shovel business behind it.
Redditors mostly only look at all technology through the eyes of gaming and nothing else. So because Nvidia cards were relatively cheap compared to the last few years because of cryptomining, of course Nvidia is in dire straits and will be left to the mercy of the almighty gamer.
The en-vogue group think on Reddit now is to show total disdain towards all AI, and insist that the 'AI PC' is solely a marketing tactic for Intel, Dell and Microsoft to sell more computers, mostly because it really seems most people on reddit don't do any work to appreciate the benefits AI can provide to productive people.
That is great way to loose tons of money. Being in a winning trade doesn't make you genius. Price matters. Geo matters. Policy matters. Many other things matter.
I had heavily pondered investing in Nvidia in 2014 when I thought deep learning was really becoming interesting (90+% of my other investments are in index funds) in some sense, I had some expert knowledge of the field. However, I thought that margins would compress because AMD, Intel, and perhaps other firms would get involved... Boy was I wrong.
Although not using real money, I went 90% in to IOMG in a high school virtual portfolio assignment when I was selling Zip drives as fast as they could be produced.
The problem then becomes getting out before the rest of the market and before the good times stop.
Like a party, perhaps one should sell while everyone is still having a good time.
I'll do it one better. As a gamer when I was younger, I knew they were the future. I asked for shares for my bday at the time and got them at least at $22.88 a share as that's as far back as my records go.
When I read that undeniably impressive anecdote, what really stands out is not the shares or the money - it's the incredible childhood you had, the smart and organised parents who raised you in a way that you'd even understand those notions at a young age, and be in a position to enable them.
The way I was raised, I could top my schoolmates academically no problem, but the concepts and methods for creating monetary wealth - beyond "I need to somehow scrape together enough to pay for the next week's needs" - weren't even part of my (or my family's) universe, until I gradually learned them by accretion from decades of my own adulthood.
Hah, as a starving student I knew 3d gaming was the future, and thus scrounged $1.5k to invest into TDFX. Next, they sold all assets to NVDA and dissolved the company [1].
I think you made a good bet, but it's important to recognize it was a bet. Believing something is true, and then turning out to be correct, isn't the same as knowing something. The future is not knowable - it's only varying degrees of predictable.
While I appreciate your inputs for those reading this please do not take this as good investment advice. A lot of things need to align for you to benefit from even the specialized knowledge here.
Unlike the OP who used insider knowledge (for being a customer of Nvidia) I went against the HN crowd more than twice with buying META at $89 [0] and GOOG at an average of down to $93 [1]
so many folks here have industry knowledge that is as valuable as insider knowledge yet they don't have fortitude to act on it. Instead, they dismiss their own intuition and listen to reddit/social hivemind.
Total crap. Doesn't pass the smell test when 99% of people say this.
Would you buy a lemon for 2.336T? No? Probably not. What do you specifically value Nvidia at? Not the share price. Your own calculation. You, AnotherGoodName, are going to buy Nvidia outright. You're basically Elon Musk, and you think you can create better AI chips.
You don't know what that number is? Then you don't intimately know the value of the company.
Knowing tech intimately means nothing.
You know how much a banana costs, right? You probably wouldn't buy one for $10.
> You don't know what that number is? Then you don't intimately know the value of the company.
Unless he's an insider. (Which he admitted)
> Knowing tech intimately means nothing.
Exactly. Everyone's an expert in a bull market or when the stock runs without a down turn.
HN is an indicator to be bearish when euphoric posts like this are around. We'll start to see the short term dumping of $NVDA when we hit higher prices and the increased geo-political risk with China and Taiwan or a surprise declaration of war.
Or people with strong knowledge you trust. There's a somewhat famous legend of a trade Peter Lynch did based, in some part, upon his wife commenting on buying pantyhose at the supermarket. I'll let you read for yourself -
"I had a great luck company called Hanes. They test marketed a product called L'Eggs in Boston and I think in Columbus, Ohio, maybe three or four markets. And Carolyn, ah, brought this product home and she was buying and she said, "It's great." And she almost got a black belt in shopping. She's a very good shopper. If we hadn't had these three kids, she now -- when Beth finally goes off to college, I think we'll be able to resume her training. But she's a very good shopper and she would buy these things. She said, "They're really great."
And I did a little bit of research. I found out the average woman goes to the supermarket or a drugstore once a week. And they go a woman's specialty store or department store once every six weeks. And all the good hosiery, all the good pantyhose is being sold in department stores. They were selling junk in the supermarkets. They were selling junk in the drugstores. So this company came up with a product. They rack-jobbed it, they had all the sizes, all the fits, a down they never advertised price. They just advertised "This fits. You'll enjoy it." And it was a huge success and it became my biggest position and I always worried somebody'd come out with a competitive product, and about a year-and-a-half they were on the market another large company called Kaiser-Roth came out with a product called No Nonsense.
They put it right next to L'eggs in the supermarket, right next to L'eggs in the drugstore. I said, "Wow, I gotta figure this one out." So I remember buying -- I bought 48 different pairs at the supermarket, colors, shapes, and sizes. They must have wondered what kind of house I had at home when I got to the register. They just let me buy it. So I brought it into the office. I gave it to everybody. I said, "Try this out and come back and see what's the story with No Nonsense." And people came back to me in a couple weeks and said, "It's not as good." That's what fundamental research is. So I held onto Hanes and it was a huge stock and it was bought out by Consolidated Foods, which is now called Sara Lee, and it's been a great division of that company. It might have been a thirty bagger instead of a ten bagger, if it hadn't been bought out."
He talks about this more in One Up On Wallstreet about how an observant retail investor who goes to the supermarket or department store or fast food chains, or in your example a loading dock, every week is actually more in touch with what's happening in some businesses than some institutional investors.
The service here has really gone down over the years, product sucks everyone is switching to the competitor, friends can't stop raving about this new product.
I don't know how well that advice holds up in today's market but it's a fun idea, maybe just for the play-money account.
By definition, by the time someone has time to phrase it and broadcast it on a public forum, it’s already priced in.
And corollary, if just a thousand dollars can be made from influencing people on Reddit, then thinking how many people you can pay to create fake interest on Reddit. Now do the calculation for $10k and $100k.
I always invest based on a d20. Back when BTC was $1 I rolled one and got a natural 20 so I knew it would take off. I put my life savings into it and cashed out last year. Now I own three yachts and two islands and have the whole day free to troll on HN.
We all understand that this cannot and will not continue, right? One of two things happens:
1. The AI boom goes bust. Nvidia sales and/or margins crater. The stock craters with it.
2. The AI boom is the real deal. Companies aren’t stupid and won’t keep paying Nvidia these prices forever. Pretty soon hardware and software architectures are standardized enough that anyone who can get onboard with TSMC, Samsung, or Intel can churn out hardware optimized for the right few functions and sell for a faction of the price. Nvidia can still be an innovator but they won’t be able to sell “bread and butter” products at these prices. Sales and/or margins crater, as does the stock.
NVIDIA got lucky that modern computer architecture happens to favor GPUs for AI workloads. They won't be able to milk it for long, but they for sure have the money to pivot. Question is whether they will put that money to good use or not.
I also think NVDA is overvalued, but timing is everything. They could stay overvalued for years before coming back down. "The market can remain irrational longer than you can remain solvent" and all that.
Not GP, but that's exactly what I'm doing. Sold NVIDIA recently at 869 USD (having bought it at 453 USD), and invested profits in Intel :) We'll see how that plays out in a year or two.
$869 sale means you sold between March 2024 and last week. Let’s game this out:
100 shares of NVDA at 453 pared down to just profits from 869 sale would mean holding about 48 shares and selling 52 shares. After today’s after hours movement your invested profit would be worth about $48k, or about $6300 more than when you cashed out your initial investment ($41712).
You take that same $41712 and buy INTC between March and now. If it was bought in March then you’re in for something like $43/share or 970 shares. Intel has been sliding since April and is now at $31. Your profit from NVDA has shrunk by nearly 30%. In the worst case (you bought in March rather than April), you’ve given up near $19k in profit by following your convictions. Your gains have gone from 115% (had you held) to potentially as low as 70%. I guess it’s all house money anyways though, right?
You're talking about this with benefit of hindsight. When I was selling at $869 I would not know how it will go. And, as a matter of fact, a week or two after I sold NVDA dipped to $700, although temporarily. So, it's just a matter of personal risk tolerance, I guess.
I have a 6 figure profit in NVDA shares right now. Cost basis is something like $100. I have considered selling( or at what price I would sell). The problem I have is what could I possibly buy with that profit? Intel hasn't shown that they have a real plan. The move in META seems to have already happened. I don't trust that Alphabet has any idea what they're doing. I could buy more Microsoft or Amazon shares I guess. I wouldn't throw money at these software stocks like Snowflake or the SNOWs of the world. AAPL might be a play if I have the conviction that Tim Cook has an AI plan in place.
In the end I'd probably just take the easy way out and go buy VTSAX and chill.
really? intel a sideways stock from the 70s is the best long you found in the entire planet? out of all the financial instruments and all the markets and all the categories u actually believe that’s the best pain to gain ratio play
They have their own fabs, a new GPU line, and they're national security critical. they also make pretty good CPUs even if they aren't the best value/$.
Intel literally cant fail because of national security. The government will continuously bail them out which I think is a pretty big advantage, giving them time to figure something out. Theyre cheap as fuck too so tons of upside
Well, I'm betting on Gelsinger's plan to launch Intel 18A process, and regaining process lead - this should bring Intel's stock price from current $31 to at least $70. Also, it's a hedge against China invading Taiwan and blowing up TSMC, in which case it would probably skyrocket to $100+. In the meantime Intel pays nice dividends.
MSFT went sideways for like a decade too. Who knows... Intel is doing something the others aren't with building its own fabs. Which arguably carries a lot of risk but it could pay off.
3. To justify current valuation revenues must continue to grow next 4-5 years until plateauing while Nvidia profit margin gradually declines to something normal, like 30%.
High growth is fragile. The value of Nvidia has dropped 50% multiple times in the past. Recression, or temporary oversupply, anything can mess it.
You mean the same companies who are paying AWS, Azure and GCP a lot of money for decades despite there being cheap alternatives? Or which customers do you talk about?
My company uses Azure for years. I don't expect them to change that anytime soon, I mean we're a SAP customer for 40+ years and SAP is Germany's No. 1 price gouging company. We use MS products for decades as well despite them being more expensive every year and I still do more or less the same in Excel today as I did years ago.
I think you have a misunderstanding of how B2C works and especially when we talk about enterprise level SW solutions. No CEO in their mind is switching business operation SW if a competitor is on sale lol.
This thought is strange. This very moment is the moment of success. Perhaps it can grow more, who knows, but a maximum declines on either side, that's literally what a maximum is.
Saying it won't last should not be profound because that fact should be self-evident. The only reason it becomes profound is because a lot of people are just that stupid.
What is happening is that every government on the planet is forced to procure local DC compute capacity to protect national sovereignty. The US ensured this with SWIFT deplatforming Russia.
And there is nobody else they can buy from on their timelines.
I noticed that your post failed to include important details such as when option 1 or 2 will happen or how option 2 will be implemented. I don’t disagree, I’m just pointing out that your post is worse than useless blathering, it’s useless noise.
There is also third option - which I'm not saying I think happens, but if AGI was to happen then there is possibility of just few winners taking it all. Whoever gets there first would simply snowball away. It would be end game of capitalism.
It takes years to build a new fab. The market has no patience for that.
Intel is the cheapest tech company by a huge margin if look at book value.
Those fabs are expensive, but even if nobody wants Intel processors anymore, they could even manufacture Ryzen's.
The downside is that it takes 3-5 years to make profit on a fab, it's easier to be NVidia in that sense, but I wonder if it's sustainable in the long run.
They would need a culture change. Starting with a mostly independent Skunk Works division and a rethink of their software stack. I wouldn't bet on any of that happening.
Not convinced Intel can turn this around. Both on server and consumer side they've been losing share to AMD for like 7 years straight...cross generations, cross platform...just everywhere with amazing consistency. And if half of the AMD roadmaps/rumours are true then the next couple years will be worse.
...so yeah some casual R&D isn't gonna cut it...they need to pull a rabbit out of a hat urgently.
NVIDIA’s announcement included the declaration of a new Industrial Revolution based on AI. We’re coming to peak hype any month now. What will they ride when that wave(/bubble) dissipates?
(Microsoft announcing a few days ago that they have taken the lead in a new computing paradigm with their AI-infested devices was genuinely fascinating to me in that respect. The actual AI stuff that got added, I was like, (a) perhaps marginally useful for certain folks but (b) I don’t want any of it, and (c) it’s just literally the same stuff pushed for the past two years, only now with the same breathlessness as when people were genuinely wondering if ChatGPT was sentient (lol). Like, the huge pushback iTerm2’s creator got over adding an AI facility to its latest release puzzled some folks, but it really does feel like people are sick of the AI hype. AI evangelists are going to induce another AI winter if they don’t pump the brakes and start managing expectations better.)
Google announced 2 weeks ago that its Q1 capex for datacenters and servers was $12B. This was up 100% y/y. Goog also expects for this capex spend to be ongoing... A healthy chunk of that is all going to Nvda
in the past - Industrial Revolution - when somebody started producing something profitable others would start similar production too. In our post-Industrial age software provides the moat protecting your hardware margin. The IBM's PC cloning was the perfect illustration when such a moat wasn't utilized. Everybody learned the lesson, pushed for DMCA and the likes and here we're.
Speaking about how high is the specific moat here - NVDA had great foresight starting to develop their CUDA almost 20 years ago. I at the time was thinking - the HPC market couldn't be that big to support that investment. Well, when 10 year ago the GPU deep learning arrived with AlexNet the CUDA was ready for that Valkyrie ride we've been seeing since then while all the other players are only starting to wake up at best.
That is on supply side. On the demand side - if any projections about AI even in nanobots in your blood come even partially true - we have decades of AI technology growth ahead, and like with other foundational technologies of our civilization - electricity and the internet and the space (guess who is going to mine He3 on the Moon?) - it will be everywhere. NVDA probably like any other company will stagnate and become MBA heaven like say IBM or even rot and perish and/or somebody will come up with completely different technology for AI leaving NVDA in the dust, yet it is hard to see how it can take less than coupe of decades (i.e. hardly can happen until Jensen leaves). (i'm long if any asks :)
> in the past - Industrial Revolution - when somebody started producing something profitable others would start similar production too.
Minor correction. They stole the technology.
When British invented textile mills they had strict law against exporting the designs. Cotton was bought from the US to Britain and made into textiles.
Samuel Slater is considered the Father of the American Industrial Revolution was called "Slater the Traitor" in Britain. He memorized the textile factory machinery designs when he worked as an apprentice, then moved to the US.
Americans, Japanese, Chinese industrialization follows the same proud tradition. You steal when you can't get it any other way.
This likely has more staying power than the crypto boom that fueled AMD's GPUs to enormous heights but when that crashed AMD ended up holding a lot of stock it couldn't shift and had an enormous right down of inventory. This AI bubble could be burst by a better cheaper product more dedicated to the task or a realisation that the issues with AI just can't be solved and a cooling off of the market hype.
What I fear is that Nvidia sees no value in its basic graphics cards any more or wants a lot more for them because they could sell that wafer space to businesses for more $. Its been getting crazy expensive for decent GPUs for a while for gaming and I can't see the next generation doing anything but being much higher due to the AI boom.
The actually applications of it (they do exist and they are valuable) pale in comparison and value to what it's valuation is based on, it's future promise.
When the people who say things like "AI is going to replace all accountants!" stop speaking the the future tense, it's value will be justified. For now, it's OpenAI spending billions developing a product they hope will make trillions and Nvidia is happy to sit in the background selling billions of dollars in compute.
In many cases there's no obvious way to collect additional revenue for AI features either. For example, Google now has an AI box in their search but will this translate to more ad revenue?
Right now I’d say it’s 5% functionality and 95% marketing hype for companies that want investors to believe they are innovative. For the most part these companies are just incorporating chat bots and inaccurate abstraction layers into their platforms and calling it the greatest transformation in history. What feels off to me is that most of these people don’t have great track record with these types of predictions and are historically trend followers.
Yes, and the cognitive dissonance induced by comparing the actual applications of it to what the evangelists and marketeers say about it is extraordinary. The rhetorical gap widens apace.
> This AI bubble could be burst by a better cheaper product more dedicated to the task
True, but currently, no one can match the offering of NVidia, they are the sole pioneer in this market. AMD is yet to show any viable option (both on the HW and SW layers).
And they only have ~18 months of absurd profits from just a couple of customers (Meta and Microsoft/OpenAI) who are likely to realize they don't have the revenue to support 10 figure CapEx and will chose to develop their own chips, cutting NVIDIA out of the loop.
I foresee Nvidia stock playing out like a softer version of iomega that will still have consumer demand, but not as much temporary demand from the megacorps.
What about the 1000s of companies outside of Big Tech who are interested in AI. Where will they get their AI compute?
I tell you where, from Nvidia direclty or from a CSP renting it to them. Oh wait, aren't MS, Amazon and Google such CSP? Oh right! Could that mean that Nvidia sells GPUs to CSPs which then rent it to customers or rather companies which aren't CSPs? So how do these other companies use Nvidia's GPUs from renting? Let me guess, maybe Nvidia Enterprise AI SW suite? Bingo!
And how does Nvidia benefit from these other companies? Or right, Nvidia gets $4500 license fee per GPU if a company uses Nvidia Enterprise AI solution. Oh wait, does that mean that Nvidia might be into building a SaaS business? Correct, but psst... nobody listens to Nvidia management so only few have a clue. Clearly, Nvidia is earning money only from HW to use it for hobbies like Clara, Isaac, DriveSim, Omniverse and many more... GTC was way more about SW development than HW but that was just show to keep people entertained. Nvidia also is a nice HW company employing more SW engineers than HW engineers so that SW engineers also get a chance for work.
The race to build their own chips vs buy nvidia… I imagine they do both. Any nvidia they leave lying around the others will buy and start training models with. Arms race basically and you don’t want your enemy buying the alternative.
Nvidia, being the 3rd most valued company in the world right now, couldn't get bought by any of its customers until after it's no longer relevant to leading the AI race and has been devalued accordingly.
They are making 78% of margin on those chips - I would think that that leaves a lot of bargaining power to TSMC. They would loose much less than Nvidia.
Nvidia may be working with Samsung, but they don't have any alternative for now.
So my understanding is, that TSMC currently has the monopoly on producing Nvidia chips, and Nvidia obviously has the monopoly on selling those chips.
And somehow, Nvidia is extracting 99% of profits from that situation, while TSMC is getting close to nothing. My understanding of game theory is that it should be way closer to an even split.
Could you elaborate on why the prices are defined by AMD margins ? I'm obviously missing something, but can't see what.
The way that could play out is that Nvidia wouldn't buy directly from them, but somebody else purchases cheaper from TSMC and then Nvidia buys from them.
So TSMC would have to increase prices for everyone, but then for some it would be too expensive and so they would lose those customers.
Nvidia engineers work shoulder to shoulder with TSMC to squeeze everything from the architecture even before the fab is build. TSMC makes custom job for their best customers.
For old established process it's possible to send design and get functioning chips without a huge R&D hassle and loss of performance.
Imo this depends on whether the limiting factor is demand or production.
If it's production capacity, then if in a year they're able to get TSMC to make them twice as many chips, they could likely increase their growth rate?
I'd be sweating if I were any of TSMCs other customers right now and trying to renew my contract. Idk what the ratio is in size between an H100 and an M3, but I doubt it's anywhere near proportional to how much nvidia is willing to offer TSMC.
Imagine the vindication Jensen is feeling at this point. Not even about the money, just about being so completely right after 20 years of hard work and a vision.
I saw pallets of h100s shipping that were worth 100s of millions each pallet (each card is $40k and you can fit a lot on a pallet) as someone working for a company buying these and knowing that many other companies were doing the same (we have 12+ months of back orders with nvidia alone).
I invested last year at ~$250 when redditors we're posting that "Nvidia is the best shorting opportunity" without any of the knowledge of the market.
It looks like it's now going above $1000 and still going up.
Invest in things you know intimately folks. Also do the opposite of Reddit.