So one thing that most people agree on is that Nvidia is the one benefitting from this Gold Rush ( AI Boom) being the most dominant player selling shovels ( GPU's).
But my thesis is that this AI Boom isn't sustainable for long since it is not only expensive to afford the infrastructure for machine learning( data centres etc) but also time consuming to train the machines with a googol of information.
Now, the problem is that currently there aren't meaningful profitable applications for these AI, especially generative AI which all the companies seem to be hopping on now just for the sake of it. It would make sense if they used this AI to enhance their products which many are but offerring generative AI as a service directly to the consumers still seems to be somewhat precarious. Most common people don't care about AI. The problem that most people are callous about is the over dependence of NVIDIA on this Generative AI Boom to the point where more than 60% of their revenue comes from the data centre/AI segment.
Once the AI Boom fizzles out in the future (which I think is still far away), their revenue will take a hit severely and you'll just get a bunch of analysts at wall street filled with gloom just because the revenue doesn't match their expectations. As a result, the stock would take a hit.
Remember, NVIDIA might still be incredibly profitable after that and bring in significant revenue especially through their leadership in the gaming segment. However it will lose its former glory and it's stock price would come crashing down. It needs to diversify soon and keep it as its top priority.
Please give me your two cents on this and correct me if I'm wrong .
NOTE: Do your own Research and Analysis before investing. Don't invest just on the basis of a reddit post. This isn't no investment advice.
Edit : The title may be a bit misleading, my apologies. I'm not saying NVIDIA as a company would crash, but its stock price will be severely affected once the AI Boom fizzles out and its revenue reduces , Although I don't think it'll happen in the near future.
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