Multi billions are being written off:
1 Like
Is this potentially a buying opportunity?
1 Like
Potentially yes. But based on 2001, the pullback is a typical new-technology crash which has happened at least 5 times since the beginning of the Industrial Revolution and may have much further to go.
Wendy
4 Likes
Markets go down, they go down a lot. I have no idea where the bottom is and the best I can do is have ready a list of businesses that I would like to own or buy more of and at prices that make sense and where there is some margin of error. The best investors do the average thing when these moments of panic start to unfold, at least that’s what I try to remind myself.
2 Likes
In the dot com bust, the Nasdaq was off 76%, today it’s off about 5% from its peak. There were certainly bargains back in 2000, Amazon dropped 77%. On the other hand Cisco dropped 90%, and didn’t recover for over 25 years.
There’s a long way down yet, and it’s hard to tell who the survivors will be (assuming this will all turn out to be a revolutionizing thing rather than a passing fad - like blockchain, or the Metaverse, or NFTs, or wearable tech, or crypto replacing currency, or … )
6 Likes
It’s why I try to stay far away from businesses I don’t understand, can’t identify their moats, or ascertain their value. It’s been a hard learned lesson. But in the end, I’m not looking to guess at where the overall market will go. I don’t think most people get it right, either when to sell or when to get back in. For those that have that skill set, great, it’s just not a game I know how to play or serves my mindset. That said, it never feels great when those moments happen and the market always seems to come down at a faster pace than it rises.
1 Like
Don’t ask me. I know a lot more than you. So you won’t listen.
I can respect that, and never talk business again with you.
There is an old saying in CT that I started, “You can’t lose if you don’t play”. You are a gambler to begin with.
The most disturbing info is that Google missed their ad targets implying that AI is stealing from search. Could also be slowing economy and the bottom leg of the K spending less.
Most think the core companies are likely to succeed in AI. Most have profits and reasonable PEs. The others are at risk. Buyers must be selective.
3 Likes
Intel is interesting, having dropped almost 30% by midday. Can America afford to let one of its major chipmakers disappear?
There are those three magic words…Dollar cost averaging. I am tempted to buy a small amount of Intel once a month for the next 6 months and see what happens. What could possibly go wrong?
Wise words.
On the other hand, it seems increasingly clear to me that one of the big winners in this AI race is going to be Apple. The Mac Studio desktop can already run the DeepSeek V3 LLM model at 20token/sec without any cloud connection. The needed configuration costs about $10k, but that number will undoubted go down as Apple improves its chips.
Seriously, why deal with cloud connections and security concerns when you can have your own locally run AI.
And Apple doesn’t need to build data centers to win this race. Everyone else is burning money to develop the AI while is Apple is preparing the product that will be sold to the masses.
4 Likes
Intel is a major chipmaker only in that they make an awful lot of advanced chips, but only of their own design. They are not a major chip maker in that they do not have a variety of fabs, nor make a variety of chips. Unlike TSMC for example. Or Texas Instruments. Or many others.
Intel has only just started ambitions at becoming a contract chip fabricator of the likes of a TSMC. We don’t know if they will be successful at that. So if they fail at it I’m not entirely sure what we are losing.
Not really. My port was losing money earlier this year. With the AI boom it rocketed past Nasdaq composite. With today sell off it is still well above the averages.
The Massive AI sell off is just a bit of a correction. AI related stocks are VERY, VERY, VERY volatile.
These past six months TSLA went up to $453, down to $299, and now $397. A 34% drop and a 33% recovery. Most investors can’t stomach this level of volatility.
The Captain
3 Likes
No need to imply it. They straight up said that was happening. However, overall revenue was up 25% with increasing margins. That’s a pretty great quarter no matter how you slice it. Google Cloud revenues, which is the bubbly part everyone is worried about, were up over 100% with a reported half trillion dollar backlog.
The thing giving analysts vapors is that free cash flow was negative. That’s Not Good™ for obvious reasons. On the other hand, if you can grow revenues at 100% shouldn’t you be investing every thin dime you can find? If Cloud keeps growing at this rate it will be bigger than search by next year. I’m not saying it can do that, but that’s the scale of what we are looking at.
7 Likes
You don’t need Apple to run AI locally on your PC. You might need some additional hardware, like below. And sure, there are lots of reasons why you’d want to run AI locally. But there are lots of advantages of cloud AI too, especially for enterprise users which is where the money is.
2 Likes
I’m a long term holder of apple. I don’t know how big of a winner it will be in the AI race but I hope you are right. It is on the buy list and I have price targets where I intend to add tranches.
I think I remember reading somewhere the average peak to trough of a stock is 50% over a 12 month period. Volatility is simply the price of admission.
1 Like
Maybe. Google fell all over themselves to change the names to Gulf of 'Merica, etc. Maybe a lot of people were disgusted with them and switched to Duck Duck Go, like I did.
I don’t think this is accurate. I suspect Google Maps has a direct connection to the DB of the government agency that deals with names. And, of course, THE Guy tells the agency to make the change and this is automatically replicated to everyone that uses that DB for their mapping software. Of course, Google could manually adjust their software to reflect reality but why irritate THE Guy!
JimA
4 Likes
The PE may never return to 40.
I have not researched the numbers. Intel is deeper into the foundry business now.
I’ve never modeled 40 as a target to add shares. It’s provided numerous occasions over the last decade or so to buy at more attractive prices in line with its historical price to earnings multiple. Of course, there are other valuation methods that consider return on equity and Apple’s ability to take excess cash flow to buy its own shares at attractive prices, further enriching existing shareholders. Nothing better than a strong business with above average margins able to produce excess cash flows that can go back to shareholders in the form of dividends, cash on the books, or reduced share count.