Ouch! With about 75 min of trading left - AI names
Super Micro (SMCI) down > 19%
Astera Labs (ALAB) down > 13%
SMCI has been on a terrific run during 2024 - rising from under $300/sh to over $1125/sh in mid-March 2024. With today’s hit, currently below $500/sh. Riding coat-tails has its risks.
ALAB is a 2024 IPO
Riding coat-tails has its risks.
No position in either. But will likely add SMCI to my watchlist (ALAB is on my watch-list, but I was reluctant to pull trigger on a 2024 IPO during the initial months)
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If you are going for AI, go for the best. Separately, I would wait for the trough of disillusionment. We are not yet there. If you are not familiar look for Gartner’s Hype cycle.
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@Kingran - so you think the market is currently at Step 2 of the Hype cycle? I guess I could see that … especially with the Nvidia delay likely to push some AI developments back a little.
Yes we are in step 2. With the new administration there will be lot of consolidation and few players will emerge out. My preference is to wait…
PS: When you get old, you wait for everything
Nvidia is scheduled to report earnings Aug 28. Expected to be up 30%.
The norm is late in the earnings cycle investors begin to worry that tech stocks are fully valued or over valued. Volatility increases and stocks trade over a narrow range. They are reluctant to bid prices to new highs.
For Nvidia, earnings usually cause prices to stairstep back to previous high and then grow from there. Likely to continue as long as they continue to grow earnings. But when or if they miss watch out below.
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$PATH, UI Path, There are sales execution issues, growth faltered last quarter. If they can steady their GTM and get their sales growth back, today’s price may be a good one.
The stock is < 5x sales, so the valuation is not that demanding.
@pauleckler - I think a lot in AI rides on Nvidia’s results and their comments on the near term. Yes, I do think there are multiple options
- Good results Up
- Good results Down (market wanted Great results)
- Great results Up
- Great results sideways
- Good results, meh outlook Down
- Good results, ok outlook Up or Down
- Good results, positive outlook, Up
- Less -than-good results Down (in most cases)
Have taken steps to prepare myself by dumping higher priced NVDA shares, and figure out a strategy as earnings draw closer.
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For Nvidia the knives seem to have stopped falling. Up 10% from the bottom last week. 93 bottom to 104 today.
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@pauleckler - With NVDA having not reported their quarterly results, I don’t think we know for sure. Is NVDA current pull-back related to Blackwell delays? If so, what is the market expectation of delay vs what is NVDA’s anticipation of the delay? Using SMCI as an example, their highs were back in March 2024. It looks like there were several brief claw-back attempts thru July 2024, prior to the collapse upon reporting their quarterly results.
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Or is the recent drop of Nvidia shares the usual hedge fund//short seller routine used to drive down prices.
As we approach earnings company goes through a silent period when they cannot respond – to news or rumor.
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Not just $NVDA but overall market (except few areas like REIT’s) have suffered lot of technical damage. The next 4 to 8 weeks it is going to be choppy, i.e., moving up and down, consolidating. Then you have elections. I think until a new administration is in, the markets are going to be lackluster.
While fundamentals are important but the market environment is also important. So, I would not be surprised if $NVDA fails to rally on good news, or even falls on good earnings, because the expectations are so high.
It is bit late for me, as I have invested fully and some more just before the market melt-down (you suck $IWM), wherever you can, you should reduce exposure a bit and keep some dry cash available. This was always my mantra, whenever I move away from that market punishes me, still I am not learning that lesson. 
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So far the higher average volume is all on down days and the up days had relatively lower volume. I would like to see a up day with significant high volume, this means the buyers are coming in and they want to get in. What we are seeing is, on every rally the sellers are coming in and selling. Not strong.
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With NVDA’s share split, there’s probably more retail/individual investor involved too. I mean, start of 2024, it was trading close to $475 - $480-a-piece (pre-split). So likely, a lot more smaller players involved at these levels than before.
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I don’t think anyone knows outside the company but shorts and traders are certainly very good at spreading wild rumors to drive down prices. And during the silent period company cannot respond.
It’s a risk. Flip a coin.
I think this says investors worry that Nvidia may be fully valued or over valued and are reluctant to bid the price higher. When or if good earning numbers arrive, I think that will changed. But for now trading over a narrow range would be normal. Up trend is encouraging. They are the leader in the industry and likely to deliver good numbers but yes its a risk.
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Been on the road the last week or so. During that time, SMCI has more than recovered from its Aug 7th plunge. Shares trading over $600/sh again.
@pauleckler - Good call on NVDA making a near term bottom. NVDA share price has bounced nicely in that same time-frame.
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