The AI bubble is facinating. This really is an incredible time we’re living in.
One thing that’s interesting is the high-flyers vulnerability. Nvidia,AMD,Intel. Many of these companies producing parts could encounter a serious issue that may destroy their valuations.
If competitors from China,India,Indonesia see this incredible demand/profits what seems to follow typically is that competition appears. Normally and typically it’s unexpected and from out of nowhere. If this happens and these companies undercut the GPU and Memory market by 75percent while only being 10 percent worse than say Nvidia, this would destroy their current valuation and monopoly based position.
This can happen, it has happened before with AMD - Intel. Worse yet say China claims Taiwans products as their intellectual property. Both countries already claim they are China but one is far more powerful and has every incentive to claim these products for themselves.
Many of these companies that bought those nvidia chips, micron memories would been in quite a pinch if that happened wouldn’t they?
While everyone is concerned about AI and a job and whether it’s ever going to produce profit, I think the real risk to this AI Bubble is real competition that would immediately destroy the current mote for many of these companies
These companies btw will still be profitable but I warn of investor risk and overconfidence that competition couldn’t possibly appear that would undercut them
Many things can happen, be aware that risks do exist and these companies are at peak valuations based on a premise of supply and demand which is typically cyclical