📰 Why has Firmus’s failed IPO made AI infrastructure valuations more cautious?
Firmus, a company that leases AI computing power, ran into trouble with its IPO, and its share price plunged by more than 50%. It’s not the first AI unicorn to have a lukewarm debut on the stock market, but Firmus’s problems—overvaluation and weaker-than-expected demand—are certainly a warning sign. The “neocloud” sector is facing a tough battle, as investors take a fresh look at AI infrastructure companies claiming they can disrupt the industry.
Why does this news matter?
The real reason Firmus’s IPO failed isn’t weak demand for AI—it’s that investors have become more selective. AI investment in 2024 has been a roller coaster. At the start of the year, VCs were scrambling to invest in projects valued at tens of billions, but regulators are now watching closely. Firmus failed to prove that leasing computing power was more cost-effective than buying servers outright. Put simply, the “moats” around AI infrastructure are getting shallower, and investors are starting to calculate the return on every dollar invested.
As for the market impact, BTC at $82.7K and ETH at $2.56K have barely reacted. This suggests that the BTC and ETH markets have their own rhythm and aren’t easily affected by an IPO in a single industry. But over the long term, if AI infrastructure companies continue to have failed IPOs, some speculative capital could shift away from tech stocks. Historically, something similar happened when the dot-com bubble burst in 2000—many concept stocks hit their daily price limits as soon as they went public.
How to approach the market
💡 This round of valuation adjustments in AI infrastructure probably won’t end with Firmus. If $ETH can hold the $2.3K level, it means risk appetite is still intact. But if it falls below $2.2K, we’ll need to worry that capital may continue to flee growth sectors like this. Companies like Firmus still have a chance if they slash their valuations to below 30 times sales, but for now, investing is a bet on the direction of the market, and the risk is high.
This assessment no longer applies if regulators suddenly tighten restrictions on AI computing power exports.
This article is not sponsored by any project. The author does not hold any of the assets mentioned.
$BTC $ETH #BTC #ETH
⚠️ This is not investment advice. Predictions are for reference only.
Firmus, a company that leases AI computing power, ran into trouble with its IPO, and its share price plunged by more than 50%. It’s not the first AI unicorn to have a lukewarm debut on the stock market, but Firmus’s problems—overvaluation and weaker-than-expected demand—are certainly a warning sign. The “neocloud” sector is facing a tough battle, as investors take a fresh look at AI infrastructure companies claiming they can disrupt the industry.
Why does this news matter?
The real reason Firmus’s IPO failed isn’t weak demand for AI—it’s that investors have become more selective. AI investment in 2024 has been a roller coaster. At the start of the year, VCs were scrambling to invest in projects valued at tens of billions, but regulators are now watching closely. Firmus failed to prove that leasing computing power was more cost-effective than buying servers outright. Put simply, the “moats” around AI infrastructure are getting shallower, and investors are starting to calculate the return on every dollar invested.
As for the market impact, BTC at $82.7K and ETH at $2.56K have barely reacted. This suggests that the BTC and ETH markets have their own rhythm and aren’t easily affected by an IPO in a single industry. But over the long term, if AI infrastructure companies continue to have failed IPOs, some speculative capital could shift away from tech stocks. Historically, something similar happened when the dot-com bubble burst in 2000—many concept stocks hit their daily price limits as soon as they went public.
How to approach the market
💡 This round of valuation adjustments in AI infrastructure probably won’t end with Firmus. If $ETH can hold the $2.3K level, it means risk appetite is still intact. But if it falls below $2.2K, we’ll need to worry that capital may continue to flee growth sectors like this. Companies like Firmus still have a chance if they slash their valuations to below 30 times sales, but for now, investing is a bet on the direction of the market, and the risk is high.
This assessment no longer applies if regulators suddenly tighten restrictions on AI computing power exports.
This article is not sponsored by any project. The author does not hold any of the assets mentioned.
$BTC $ETH #BTC #ETH
⚠️ This is not investment advice. Predictions are for reference only.