One Blogger Helped Spark NVIDIA's $600B Stock Collapse (marketwatch.com) 33
On January 24th Brooklyn blogger Jeffrey Emanuel made the case for shorting NVIDIA, remembers MarketWatch, "due to a number of shifting tides in the AI world, including the emergence of a China-based company called DeepSeek."
He published his 12,000-word post "on his personal blog and then shared it with the Value Investors Club website and across Reddit, X and other platforms." The next day he saw 35 people read his post. "But then the post started to go viral..." Well-known venture capitalist Chamath Palihapitiya shared Emanuel's post on Nvidia's short case with his 1.8 million X followers. Successful early stage investor Naval Ravikant shared the post with his 2.6 million followers... Morgan Brown, a vice president of product and growth at Dropbox, pointed to it in a thread that was viewed over 13 million times. Emanuel's own X post got nearly half a million views. He also quickly gained about 13,000 followers on the platform, going from about 2,000 to more than 15,000 followers...
[Emanuel] pointed to the fact that so many people in San Jose were reading his blog post. He theorized that many of them were Nvidia employees with thousands — or even millions — of dollars worth of Nvidia stock tied up in employee stock options. With that much money in a single asset, Emanuel speculated that many were already debating whether to hold the stock or sell it to lock in profits. He believes his blog post helped convince some of them to sell. "A lot of the sell pressure you saw on Monday morning wasn't necessarily what you might think. I believe a fair amount of that was from shares that had never been active because they had been sitting in workplace.schwab.com accounts..."
Emanuel stresses he's "the most bullish on AI," with MarketWatch emphasizing that "while the points Emanuel laid out in his blog post might be bearish for Nvidia, he still thinks they paint a positive future for AI." Nevertheless, Monday NVIDIA's market capitalization dropped $600 billion, which MarketWatch calls "the largest single-day market-cap drop to date for any company." What countless Wall Street firms and investment analysts had seemingly missed was being pointed out by some guy in his apartment.... Matt Levine, the prominent Bloomberg News financial columnist, noted the online chatter that claimed Emanuel's post "was an important catalyst" for the stock-market selloff and said it was a "candidate for the most impactful short research report ever." Emanuel spent the rest of the week booked solid as hedge funds paid him $1,000 per hour to speak on the phone and give his take on Nvidia and AI...
Emanuel wrote that the industry may be running low on quality data to train that AI — that is, a potential "data wall" is looming that could slow down AI scaling and reduce some of that need for training resources... Some of these companies, like Alphabet, have also been investing in building out their own semiconductor chips. For a while, Nvidia's hardware has been the best for training AI, but that might not be the case forever as more companies, such as Cerebras, build better hardware. And other GPU makers like AMD are updating their drivers software to be more competitive with Nvidia... Add all these things together — unsustainable spending and data-center building, less training data to work with, better competing hardware and more efficient AI — and you get a future where it's harder to imagine Nvidia's customers spending as much as they currently are on Nvidia hardware... "If you know that a company will only earn supersized returns for a couple years, you don't apply a multiple. You certainly don't put a 30-times multiple," Emanuel told MarketWatch.
The article notes that DeepSeek "is open-source and has been publishing technical papers out in the open for the past few months... The $5.6 million training-cost statistic that many investors cited for sparking the DeepSeek market panic was actually revealed in the V3 technical paper published on Dec. 26."
He published his 12,000-word post "on his personal blog and then shared it with the Value Investors Club website and across Reddit, X and other platforms." The next day he saw 35 people read his post. "But then the post started to go viral..." Well-known venture capitalist Chamath Palihapitiya shared Emanuel's post on Nvidia's short case with his 1.8 million X followers. Successful early stage investor Naval Ravikant shared the post with his 2.6 million followers... Morgan Brown, a vice president of product and growth at Dropbox, pointed to it in a thread that was viewed over 13 million times. Emanuel's own X post got nearly half a million views. He also quickly gained about 13,000 followers on the platform, going from about 2,000 to more than 15,000 followers...
[Emanuel] pointed to the fact that so many people in San Jose were reading his blog post. He theorized that many of them were Nvidia employees with thousands — or even millions — of dollars worth of Nvidia stock tied up in employee stock options. With that much money in a single asset, Emanuel speculated that many were already debating whether to hold the stock or sell it to lock in profits. He believes his blog post helped convince some of them to sell. "A lot of the sell pressure you saw on Monday morning wasn't necessarily what you might think. I believe a fair amount of that was from shares that had never been active because they had been sitting in workplace.schwab.com accounts..."
Emanuel stresses he's "the most bullish on AI," with MarketWatch emphasizing that "while the points Emanuel laid out in his blog post might be bearish for Nvidia, he still thinks they paint a positive future for AI." Nevertheless, Monday NVIDIA's market capitalization dropped $600 billion, which MarketWatch calls "the largest single-day market-cap drop to date for any company." What countless Wall Street firms and investment analysts had seemingly missed was being pointed out by some guy in his apartment.... Matt Levine, the prominent Bloomberg News financial columnist, noted the online chatter that claimed Emanuel's post "was an important catalyst" for the stock-market selloff and said it was a "candidate for the most impactful short research report ever." Emanuel spent the rest of the week booked solid as hedge funds paid him $1,000 per hour to speak on the phone and give his take on Nvidia and AI...
Emanuel wrote that the industry may be running low on quality data to train that AI — that is, a potential "data wall" is looming that could slow down AI scaling and reduce some of that need for training resources... Some of these companies, like Alphabet, have also been investing in building out their own semiconductor chips. For a while, Nvidia's hardware has been the best for training AI, but that might not be the case forever as more companies, such as Cerebras, build better hardware. And other GPU makers like AMD are updating their drivers software to be more competitive with Nvidia... Add all these things together — unsustainable spending and data-center building, less training data to work with, better competing hardware and more efficient AI — and you get a future where it's harder to imagine Nvidia's customers spending as much as they currently are on Nvidia hardware... "If you know that a company will only earn supersized returns for a couple years, you don't apply a multiple. You certainly don't put a 30-times multiple," Emanuel told MarketWatch.
The article notes that DeepSeek "is open-source and has been publishing technical papers out in the open for the past few months... The $5.6 million training-cost statistic that many investors cited for sparking the DeepSeek market panic was actually revealed in the V3 technical paper published on Dec. 26."
NVIDIA is a great company (Score:5, Interesting)
...but the stock market is a bit like the gambling hall in an insane asylum
The run up in price was crazy, as was the crash
NVIDIA will be fine
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Re:NVIDIA is a great company (Score:4, Funny)
BTW, the question has not been begged, it has been raised. Begging the question means instead of answering it, you get on your knees and put your hands together like a supplicant, and beg to be told you won the argument without effort. For best effect, you must wear a monastic robe and be a second or third son of a local lord, with money to spend.
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the unsustainable greed of these these evil classist rich people is about to wreck our economy once again
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...but the stock market is a bit like the gambling hall in an insane asylum The run up in price was crazy, as was the crash NVIDIA will be fine
Wall Street has become, or may have always been, the new religion. Filled with crazy stories of great futures and huge promises, and for some reason we let these fuckers steer our entire economy based on their wild speculative fictions. Sometimes it even ends up working out. But mostly, they shuffle money in the name of whatever new god they are trying to prop up today and pray to almighty greed that it all works out. The only thing these bastards are missing are the robes and the stories of risen dead peop
Guy who posted is a quant (Score:4, Interesting)
Did he orchestrate this dip or did he do what hundreds or thousands of analysts couldn't do. Things that make you go hmmmm.
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It's very common to short a stock and then say why you shorted it to encourage others to do the same.
It is legal as long as you disclose your stake.
Some companies do this as their primary business, such as Muddy Waters Research [wikipedia.org].
You want a lot of short selling to push the price down, and then you cash in.
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This is just stupid (Score:4, Insightful)
Nvidia's position is entirely based on them being the only ones who can reliably supply the chips needed for what is the biggest leap in human industry since the
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It's high risk for an investor just getting in now. But for the company itself, and longtime shareholders, it only risks falling from hyper-profitable to extremely profitable. Even after the current mini-crash, the share price could drop a further
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The 600 billion dollar collapse was caused by the possibility that you could do AI computing an LLMs and machine learning without nvidia's chips.
Yes, and the fact that your post wasn't modded up showed us how deep people have buried their collective head in the sand.
Brooklyn Blogger & DeepSeek / David & Goli (Score:1)
It seems like the usual Wall Street consensus on NVIDIA got completely blindsided by... a blogger in Brooklyn and a Chinese AI company. Jeffrey Emanuel, working from his apartment, wrote a blog post questioning NVIDIA's valuation, and it *might* have actually contributed to a $600 billion drop in their market cap!
You have to admire the sheer audacity of it. Here's this guy, who used to be on Wall Street but now runs a side project transcribing YouTube videos, and he manages to see something that apparently
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Indeed. A stock can be obviously overvalued to anybody taking a disinterested view of the metrics. By the same token, a stock can *remain* overvalued by those metrics for many years.
If one is looking to make money trading stock, ideally one wants to sell once most of the value has been realized - stock staying at the same price isn't making money outside of dividends, well before the stock price drops.
So one ideally wants to trade out of a stock before a flat period hits, much less a drop. One wants to p
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I'd bet we aren't yet at peak stupidity.
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I'd bet we aren't yet at peak stupidity.
No, but I can see the top of the mountain from here. It looks like rot and smells vaguely of sulfur.
Stretching credibility (Score:2)
Did he post it on Shitter? Did anyone read past the second sentence ?
Since when was all data equal?
What exacly is "high quality data ?"
Can you find high quality data on reddit? Is that even possible ?
Good software = bad hardware??? (Score:3)
Look, I am not saying anything about the price of NVDIA. Perhaps it is overpriced and due a fall. Or perhaps now is a great buying opportunity. I do not know.
But will someone out there please explain to me why they think that better software will somehow reduce the demand for hardware? That is not how it works, according to about 80 years or so of business.
Better software may be able to function on poor hardware, but it works even better on good hardware. And in business 'even better' = the edge you need to beat your competitors. Nobody is going to say, meh, this is good enough using the crappy computer chips.
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In most cases, consumer software expands, via new features, to utilize all of the available hardware on customers' devices. With AI, the software runs on servers and I'm not sure there are a lot of features that can be added to something whose primary purpose is calculating and traversing statistical weights
Re:Good software = bad hardware??? (Score:5, Informative)
But will someone out there please explain to me why they think that better software will somehow reduce the demand for hardware? That is not how it works, according to about 80 years or so of business.
Better software may be able to function on poor hardware, but it works even better on good hardware.
More like 160 years: https://en.wikipedia.org/wiki/... [wikipedia.org]
Was Way Overpriced, Correction Was Inevitable (Score:4, Insightful)
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The market doesn't make as much sense as this article would have you believe.