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Comment by jvanderbot | Hacker News Reader

I never understood this reaction the market is having. It's like reading the tea leaves - effectively random and not helpful.

I think it makes more sense if someone thinks "Gen AI is just NVIDIA - and if china has Gen AI, then they must have their own NVIDIA" so they sell.

But it makes the most sense if someone thinks "Headlines link US lead in Gen AI and NVIDIA, bad headlines for Gen AI must mean bad news for NVIDIA".

And the theoretically ultimate market analysis guru probably thinks "Everyone is wrong about Gen AI and NVIDIA being intimately linked, but that will make them sell regarding this news, so I must also sell and buy back at bottom"

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> I never understood this reaction the market is having. It's like reading the tea leaves - effectively random and not helpful.

You're exactly right.

People in the US treat the market like the Oracle of Delphi. It's really just a bunch of people who don't have a grasp on things like AI or the tech industry at large placing wagers on who's gonna make the most money in those fields.

And you can apply that to most fields that publicly-traded companies operate in.

> And the theoretically ultimate market analysis guru probably thinks "Everyone is wrong about Gen AI and NVIDIA being intimately linked, but that will make them sell regarding this news, so I must also sell and buy back at bottom"

That's most likely exactly what's going on.

Markets aren't about intrinsic values, they're about predicting what everyone else is going to do. Couple that with the fact that credit is shackled to confidence, and so much of market valuations are based on available credit. One stiff breeze is all it takes to shake confidence, collapse credit, and spark a run on the market.

From the reporting, it seems like the large drop has much to do with the idea that DeepSeek has revealed how much can be accomplished without many billions in infrastructure spend, allocated largely to purchasing more NVIDIA chips, due to the perception that DeepSeek has spent relatively small amounts in the training of their models.

Isn’t it that the current market price of NVDA was based on the amount of chips they need to sell? Because to train and run models you need so many GPU’s. Now that deepseek is showing you need less GPU’s to train and run it, the value of NVDA lowers since they won’t sell as much.

yep all the valuations on built on their predictions for massive demand.

And the prediction that there is enough power to run all of those GPUs.

Wasn't deepseek trained on NVIDIA chips anyway??

All this proves is that there exist no non-NVIDIA solutions to the hottest new thing.

no it proves more than that; parent comment mentioned what that is ( and other comments below your original comment).

Parent's comment was changed enough that my comment is meaningless. They previously said that you don't need NVIDIA for deepseek. I'll leave mine alone.

So what? It doesn't mean Nvidia's stock will pump forever and ever

There are so many investors in the market that it's hard to figure out what or why anything happens.

But roughly, I suspect the main thing is "enough people thought NVDA was the only supplier for AI chips, and now they realize there's at least one other" that it slipped.

At this point, this reaction of the market means nothing. All these stocks were at an all time high, so the drop was inevitable. Tomorrow they can come up with a different spin and move the stock up again.

I wonder if someday AI can do a better job at pricing things like goods and company shares.

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