Comment on The air begins to leak out of the overinflated AI bubble
sugar_in_your_tea@sh.itjust.works 1 week agoA lot of Nvidia’s stock price is based on AI demand. If that evaporates, Nvidia’s stock price would drop back to where it was before AI became a major profit driver. The big players will fight to keep AI business going, so I think we’d be in for a pretty soft landing there.
helenslunch@feddit.nl 1 week ago
I didn’t say anything about their stock price…
sugar_in_your_tea@sh.itjust.works 1 week ago
“Bubbles” are typically defined by stock/commodities prices. The 2000 dotcom bubble was defined by investor losses, the 2008 housing bubble was defined by housing price drops, etc. So an AI “bubble” will be quantified by stock prices of AI-related companies, like Nvidia.
I think the stock price will be at least partially supported by spending by the big tech companies trying to keep AI relevant. So I expect less of a “pop” and more of a gradual deflation.
helenslunch@feddit.nl 1 week ago
Incorrect. It’s defined by profits and losses, which the losses typically precede drop in stock values.
sugar_in_your_tea@sh.itjust.works 1 week ago
I think the opposite is true. Stock values factor in expected future earnings, so if the market seems to be shifting, the stock price will generally drop before the disappointing earnings report comes in.