daedrdev parent
Stocks are down because the president of the US has entered a costly trade war, actually.
What do you make of something like Reddit (RDDT, down -15% at this moment)?
It's unaffected by tariffs, but its insane valuation is driven by the narrative that Reddit posts can be used to train AI. Without that narrative, you have a semi-toxic collection of forums and the valuation would probably be somewhere in the millions at best, not the current $20 BB.
Reddit is an ad-driven business. Ad revenues decline when economy shrinks.
When a correction happens, everyone with short-term funds pulls them out. Doesn't matter if the issue has a direct connection to the stock or "makes sense" at all.
Loss-making businesses money can be expected to fail more often when a recession occurs, which looks increasingly likely. After all if they can't make any money today how will they make a profit if add spend is down by 30%?
The companies that might acquire Reddit are affected by tariffs.
I mean, not to say that you might not have some explanatory power here, but the market is complex and difficult to untangle, and at least some analysts are predicting recession which will certainly have effects on Reddit even if it's not directly affected by tariffs. We can all cherry-pick individual stocks.
No disagreement from me there. But for the year to date the Nasdaq composite is down less than 4%, whereas NVIDIA is down 20%.
Nvidia is up 24% in last 1 year compared to <10% for Nasdaq or S&P. Cherry picking the point to compare to is bad.
It's not cherry picking to use recent data to dispute a claim about recent events. YTD might not be the best choice but its better than 1Y. 1M or Feb 20th-now give similar though not as quite as extreme differences (∨7-8% SPY vs ∨20-23% NVDA).
Feb 3 to current is -8% for Nvidia and -10% for Nasdaq. Arbitrary point will give arbitrary results. Also Amazon which is least associated with gen AI in big tech is down 20% at that time.
They aren't arbitrary. I picked the dates I did because they coincide with the widespread narrative of selloffs from tariffs and they are decent bounds on a period of stability for both.
Amazon is especially vulnerable to tariffs. To be clear, I'm not really staking out a hard position on gen AI being the one true cause here, I just don't find "it's just part of the overall tariff driven market decline" to be very convincing.
I'm definitely betting the AI bubble is going to burst but NVIDIA isn't the company that will go down with it, they actually have a real business that is not just AI hype behind it. The insane valuation they have now might not hold but I doubt they are at any risk of disappearing.
they also 10xed their revenue. 24 seems low for someone that pulled that off.
Because of deepseek right? Saying it's the end of AI because of another AI is difficult to swallow
A highly unpredictable trade war, as well as rattling every international ally, convincing nations across the world to choose other military platforms than ours because Trump could just turn it off at a whim, increasing risk of political instability leading nations to turn to other nations for investment. Our economy is a ticking time bomb under Trump.
The stock market is not the economy. International allies purchasing decisions is not the economy.
Which part of the economy are you taking inspiration from?
Indeed, it's the terrible outlook on the economy that is leading the stock market down. The US is barreling towards recession, the continued flip flop on tariffs has cause business investment and projects to be frozen while everyone waits for certainty since they can't risk getting nuked by tariffs, the rapid and deep decline in trust of US made goods will ruin our exports and military base.