After spending a long time in crypto, when I see headlines like “Nvidia reclaims the title of the world’s most valuable company,” my first reaction is no longer excitement.
Nvidia rose 2.29% over the past two days, bringing its market cap back to $4.99 trillion. It looks impressive, but the stock is still 15% below its 52-week high. It overtook Apple again, helped by Apple’s 1.9% drop that day.
I also took a look through AMD’s earnings report.
Third-quarter revenue grew 45%, and data center revenue nearly doubled, making up 64% of total revenue. Companies are still buying chips in bulk for AI servers, and AMD rose 8% after hours. The market’s reward this time makes sense.
At the same time, Oracle is preparing to raise $20 billion, and Meta has also issued $20 billion in debt. The 10-year Treasury yield has already reached 4.95%. Borrowing is getting more expensive, yet tech companies keep increasing their AI investments.
Since entering crypto in 2019, I’ve seen this kind of thing plenty of times. When the market is good, companies raise money, expand, then raise more. The bigger the numbers get, the more exciting it all looks. But when money starts getting expensive and payback takes a little longer, a lot of the bills start coming due.
Tech giants have deep pockets, so it’s not fair to compare them with crypto projects. But now, a single AI investment can run into tens of billions of dollars. Someone has to make money from it eventually.
The case for buying chips has been made many times over. What hasn’t been proven is whether the people buying them are actually making money.
There’s nothing particularly wrong with AMD’s results this quarter. I can’t say how much further Nvidia can rise, either. At $4.99 trillion, I’m sitting this one out for now.
Nvidia rose 2.29% over the past two days, bringing its market cap back to $4.99 trillion. It looks impressive, but the stock is still 15% below its 52-week high. It overtook Apple again, helped by Apple’s 1.9% drop that day.
I also took a look through AMD’s earnings report.
Third-quarter revenue grew 45%, and data center revenue nearly doubled, making up 64% of total revenue. Companies are still buying chips in bulk for AI servers, and AMD rose 8% after hours. The market’s reward this time makes sense.
At the same time, Oracle is preparing to raise $20 billion, and Meta has also issued $20 billion in debt. The 10-year Treasury yield has already reached 4.95%. Borrowing is getting more expensive, yet tech companies keep increasing their AI investments.
Since entering crypto in 2019, I’ve seen this kind of thing plenty of times. When the market is good, companies raise money, expand, then raise more. The bigger the numbers get, the more exciting it all looks. But when money starts getting expensive and payback takes a little longer, a lot of the bills start coming due.
Tech giants have deep pockets, so it’s not fair to compare them with crypto projects. But now, a single AI investment can run into tens of billions of dollars. Someone has to make money from it eventually.
The case for buying chips has been made many times over. What hasn’t been proven is whether the people buying them are actually making money.
There’s nothing particularly wrong with AMD’s results this quarter. I can’t say how much further Nvidia can rise, either. At $4.99 trillion, I’m sitting this one out for now.
