NVidia is the golden child of the stock market right now.
People think NVidia and AI are synonymous with each other, and that there can be no AI without NVidia. Google proved this false when they trained their Gemini model on Google TPUs with no NVidia involvement at all in 2024.
The latest rounds of hyperscaler circular financing show they are all moving to fund only their own chips in their own cloud services now, none of them have done a circular financing round in the last 6 months where the GPU was anything from NVidia. Google has never done an open ended circular financing round - they have always specified their funds must be used for Google TPUs.
I'm going to lay out the bear case where even if NVidia continues its record unit sales, a normalization of pricing to historical norms - not even a bear case - could wipe out 80% of NVidia's profits.
In a true worst case scenario, the stock could have 90%+ of its value wiped out.
I address common bull thesis ideas, and also areas where bulls are flying completely blind.
This is a very risky stock, built on an AI trade that is only a few years old. There is still so much we don't know about the AI story going forward, and this stock is priced as if the future is certain at a $5T valuation.
Even if you don't agree, I hope everyone can learn something from this video.
