think this was mostly spot on as things have nuked pretty hard since then
wanted to jot down some longer thoughts on the "AI trade" in general:
want to preface this by saying I don't think the "AI trade" is dead. AI, robotics, and space are clearly a big part of the future and so it is crazy to think the entire trade is completely finished
with that being said, I think there is still a lot of complacency within the whole trade right now
and this is from someone who still holds a good chunk of AI stocks
a lot of the posts I see about these stocks that have nuked (memory, neocloud, power, other "bottlenecks") are
"this price doesn't make sense, the numbers are so good!"
"the forward PE is so low!"
"their 2027 ARR is equal to their marketcap!"
"YoY growth is 400%!"
"this stock is the cheapest it has ever been based on X metric"
"they can buy their entire stock's marketcap with their revenue!"
and while all that might be true, it still sounds all too like the typical things you hear during complacency/anxiety/denial phases of market cycles
people are still too hopeful that pure math means the charts somehow cannot physically go lower
micron is still up almost 3x on the year. sandisk is still up almost 6x on the year. these charts can fall a lot lower AND still be up massively on the year
even in tradfi, I still believe price drives narrative not the other way around
if memory stocks drop another 50% from here, people will say "oh it dropped this much despite a forward PE of 3 because china is inventing new memory"
it is always easy to explain why price moved a certain way in hindsight because there an unlimited number of narratives that can be assigned to a chart no matter which way it moves
based on the above I still think there is further to fall. I'm not capitulating on everything I hold, as I think further drops are just buying opportunities rather than the entire trade being over
but I think people who are overexposed or overleveraged and relying on 2027 revenue numbers to somehow form a magical unbreakable price barrier will be shocked at how far things can drop
either way I hope we bottom soon as I'm always a bull at heart and don't enjoy seeing prices go down
why are people shocked than ansem takes undisclosed paid deals 😆
i don’t think this man has shilled a single thing below $10b that wasn’t a paid shill in years lol
beijing has some great stuff to see, but man getting around the city is horrible
traffic is insane. just took us 45 minutes to drive 4 miles
would advise anyone visiting to tick off all the must-see places and try all the great food within 3-4 days and move on to elsewhere
made some profit on HYPE and ZEC recently but man I got absolutely shafted on AMZN and GOOG
bought both for earnings and sold both at a loss after they nuked. just for amazon to giga-reversal to what would have been great profit
google still at the price I sold for now...
markets usually dislike uncertainty more than they dislike bad news
once something has happened, even if it is "bad", it can instantly start to be digested by the market
uncertainty cannot be digested by the market as by definition it isn't yet clear what will actually occur
resolution of uncertainty is almost always better — even if said resolution is deemed "negative" for the market
(eg. people saying dem sweep is bad for AI trade. but what is even worse for the AI trade is an uncertain overhang of what will happen pre/during/post midterms — something which is now in the process of being resolved)
not saying this is the bottom, but did these people not look at the BTC $15k bottom in 2022?
btc sat at $15-16k level for 3 MONTHS before starting its move to 125k
just because price sits at a certain level for a period of time doesn't mean it is guaranteed to go lower
base case still looking to play out for $NBIS (swipe the July lows at $135-145)
Elon’s posts about neoclouds dying obviously has an agenda considering it coincides with SpaceX looking to become the biggest player in the neocloud space
but is he wrong? it isn’t incorrect to point out that every neocloud relies a lot on financing of some kind, and without access to financing the entire business model collapses
but it is also obvious that not every neocloud is the same. if the entire business model was cooked no matter what, then SpaceX also wouldn’t be doing it
multiple things can be true:
- Elon wants SpaceX to become the only, or at least the majorly dominant, compute provider. and so is incentivised to see other providers fail
- the neocloud business is at risk from a financing perspective. those who cannot overcome this risk/challenge will fail
- not every existing neocloud operates the same. they have different liabilities, debts, access to capital, management teams, foundations for expansion, access to power/land etc. if one neocloud business collapses it doesn’t mean every single other one also will
- compute is still in demand and that demand isn’t expected to go away yet. GPU prices are still going up (even GPUs from generations ago)
unfortunately I do think this is bearish for ALL neoclouds (except SpaceX) in at least the short term, hence my base case is another leg lower from here
the path forward to me is simple: every neocloud whether NBIS IREN CRWV or others, will need to convince the market that THEIR business model is the one that can work and will survive. if they can convince the market of this, then their share price will reflect that
but as it stands the market is not convinced on any of them hence share prices getting nuked
no of course the $4m microcap shitter with $200k in liquidity isn't candling just because we are showing it on stream right now
seen a few people point it out now, but it is pretty depressing how this entire "bull run" in crypto since August has just been 5 daily candles for BTC
the other 63 daily candles in this time period have just been chop
every alt also topped in September and has just been mostly down only since then
wanted to jot down some longer thoughts on the "AI trade" in general:
want to preface this by saying I don't think the "AI trade" is dead. AI, robotics, and space are clearly a big part of the future and so it is crazy to think the entire trade is completely finished
with that being said, I think there is still a lot of complacency within the whole trade right now
and this is from someone who still holds a good chunk of AI stocks
a lot of the posts I see about these stocks that have nuked (memory, neocloud, power, other "bottlenecks") are
"this price doesn't make sense, the numbers are so good!"
"the forward PE is so low!"
"their 2027 ARR is equal to their marketcap!"
"YoY growth is 400%!"
"this stock is the cheapest it has ever been based on X metric"
"they can buy their entire stock's marketcap with their revenue!"
and while all that might be true, it still sounds all too like the typical things you hear during complacency/anxiety/denial phases of market cycles
people are still too hopeful that pure math means the charts somehow cannot physically go lower
micron is still up almost 3x on the year. sandisk is still up almost 6x on the year. these charts can fall a lot lower AND still be up massively on the year
even in tradfi, I still believe price drives narrative not the other way around
if memory stocks drop another 50% from here, people will say "oh it dropped this much despite a forward PE of 3 because china is inventing new memory"
it is always easy to explain why price moved a certain way in hindsight because there an unlimited number of narratives that can be assigned to a chart no matter which way it moves
based on the above I still think there is further to fall. I'm not capitulating on everything I hold, as I think further drops are just buying opportunities rather than the entire trade being over
but I think people who are overexposed or overleveraged and relying on 2027 revenue numbers to somehow form a magical unbreakable price barrier will be shocked at how far things can drop
either way I hope we bottom soon as I'm always a bull at heart and don't enjoy seeing prices go down
would advise to stay off-chain for this period
every single bad actor/insider/deployer on-chain is now incentivised to rug, bundle, and scam as hard as they can for these two weeks
you already know the "winners" of this competition will be the same people already on pumpfun's payroll
still on for this base case for $NBIS
don't see how it doesn't at least swipe the July lows
as mentioned here, my base case is still that the July lows get swept and we tap the Oct 2025 highs
with how weak neoclouds are I can’t see this 160-170 level being the bottom sadly
need one more panic move down pre-earnings and then we might bottom
$NBIS