You forgot the bit where China undermines the whole business model by releasing open weight models.

They won't mind a hard crash, as long as they get richer on the way.

Nvidia has not been a buying opportunity for a while now. Training new models is the moat it possessed. The models are as good as they can be and have diminished returns beyond this. TPUs by google and CPUs by AMD are eating into their inference margins.

Micron is a different beast though.

Market is still up from 3 months ago

Good luck to the banks.

It had a big user base boost during the Cancel ChatGPT movement, but still not a viable business model, not at their current prices.

> Yeah I'm not sure how Anthropic is going to IPO at this rate...

There are plenty of suckers willing to gamble on a failing business (massive and rapidly growing debts, assets that can easily be cloned, no realistic path to profitability), so I don't think an IPO is off the table.

With more visits to the Vatican.

I don't know - I think open source will outcompete them. What's their moat?

Not sure if you're joking, but I go back and forth between this thought. Finance is not my forte, far from it for sure, but there's a part of me that hopes a collapse can at least open the door for future opportunity. A "reset" if you will. The younger generations are up against a massive wall when it comes to acquiring wealth (or even a reasonable means of living at this point), it would be nice to give them an equal chance. I know this is very likely a naive take, but it's the only hopeful aspect of a collapse I can accept.

You think a large scale market collapse would be good? Large scale job loss and bankruptcy?

At the very least we could buy hardware again at rational prices.

How does that compare to other tech companies?

As an example, Palantir has a similar cash flow / market cap ratio. I didn't check many others.

now that they have most of the internet corralled I don't see why they won't start charging for bandwidth

They're saying that it's trivial for Cloudflare to go up the stack (build Replit) while it's non-trivial for Replit to go down the stack (build Cloudflare).

During the dot-com boom, Cisco was the underlying infrastructure of the Internet. A lot of investors that believed themselves to be savvy bought Cisco stock. Their reasoning was that individual dot-com startups may go under, but the Internet itself was here to stay. In practice, the Cisco stock price peaked in March 2000, and anyone who invested at the peak would not have broken even (in nominal dollars, not real dollars) until December 2025.

The investors were right that the Internet would be important, and that Cisco would continue to be an important manufacturer of networking infrastructure. This just fundamentally did not matter because after the dot-com bubble popped, the market decided that Cisco simply wasn't worth the price it was selling at during the height of the bubble.

Lovable is one ChatGPT/Claude update away from extinction, IMO.

That analysis completely neglects growth.

Obviously you wouldn't pay 10x revenue if you expect revenue to be flat for the next 10 years.

No wonder that company no longer exists with a CEO that doesn't get that.

Disclaimer that I'm a long-term Cloudflare holder, and that I've also sold NET in the past year.

I empathize with this view, however it is very hard to value businesses that have extremely high margins, and who grow revenue very quickly on existing products while they're adding additional products.

I don't think NET is a steal at 39x revenue. But at no point in the last 5 years has NET been available to purchase for <15x revenue [1].

During that time, it has had Gross Margins in the exceptional range of 70%-75%, and YoY quarterly revenue growth in the similarly exceptional range of 25-40%, which has increased in our post-AI agent software economy.

If you're a Ben Graham acolyte, you would have sat out of NET since it's IPO. However, if you're a Charlie Munger/Buffet admirer who understands the pivotal role NET plays in the software ecosystem (i.e. it's inside your "circle of competence"), you'd do well to consider the Mungerism:

"Forget what you know about buying fair businesses at wonderful prices. Instead, buy wonderful businesses at fair prices."

That still leaves as an exercise to the reader what a "fair price" is for NET, but (to me, at least) it's clearly a wonderful business.

[1]: https://www.macrotrends.net/stocks/charts/NET/cloudflare/pri...

"In the short term the market is a popularity contest; in the long term it is a weighing machine." - Warren Buffett

Here's the valuation though. Percentage of total web traffic going through Cloudflare.

- 2016 ~3.9%

- 2017 ~5.3%

- 2018 ~6.6%

- 2019 ~7.6%

- 2020 ~11.2%

- 2021 ~15.4%

- 2022 ~19.4%

- 2023 ~18.0%

- 2024 ~18.9%

- 2025 ~19.2%

- 2026 (early) ~20.9% (with later snapshots higher, up to the mid-to-high 20s)

Combine that with consistently excellent execution and popularity, you get the valuation.

A tech stock paying dividends? It'll never happen.

I’m still crying about taking a Dropbox offer over Cloudflare’s pre-IPO in 2016.

Yeah we are actively building our own alternatives due to excessive CF bills

I'm not missing it, I assure you. The politics was just not a huge factor in any larger sense in my opinion. The GOP tie-up was ALSO a narrative. (Though obviously folks thought the President would help with de-regulation, etc)

In the end, States and their utility regulators have to be on board with large data center deployments. Some GOP-led states were often friendly to builders, but their citizens realized what was happening and the backlash was going to happen anyway because of electricity prices. It's just one more nail in the coffin from a cost-of-living perspective, and the utilities hadn't yet passed the costs on to their customers (but it will pop up soon).

States that were led by Democrats were already pushing back for their own regulatory regimes for energy cost recovery, etc. Data centers were wildly unpopular at a STATE level, so it didn't really matter what was going to happen at the federal level.

Safe and good are doing a lot of work there. Nuclear power is only safe and good if the right safety measures are put into place for it to operate safely. AI, or the data center build-out might warrant similar consideration potentially?

Happily I think the power market in the US will do most of the regulating for the industry. AI is not bringing costs down for most people at the moment, or perceived to be helping people in a big way. Until there is an understanding of how it will work within society or a bit of trust built up with an industry that has mostly said "shut up and take it" I think it's reasonable to expect some conversation without jumping to "these folks are all populist stupid politicians". (In my opinion, populist, stupid politicians could be used to describe both parties so what is really changing?)

I was going to say that Democrats have no power to uphold laws, that's up to the executive and the national executive hasn't changed.

On the other hand a number of governors have changed (Texas in particular just went to a Democrat, and there are SpaceX interests there). They by definition can't prosecute on a federal level but they do hold some enforcement power.

So now there is a new Cold War arms race and the us again has to develop something stupidly dangerous for „its own safety“?

I’m convinced the best thing that happened in the nuclear arms race is the beginning of a dialogue that resulted in the start and salt treaties.

Ai obviously needs something similar.

US just elected a bunch of people who ran on program "hurt US ai companies and help the chinese ones"

I've seen this movie. I think it was called "The Bus That Couldn't Slow Down". It had Keanu Reaves and Sandra Bullock. IIRC it didn't end well for the bus.

I expect more action on the state & local front than federally

I'm starting to use it quite heavily and extremely productively for non R&D and non SWE work. It has transformed one aspect of my business, and that won't change -- this type of usage is highly productive, and only likely to grow.

No they aren’t.

Doom scrolling is nothing good for society and it’s with us only because extremely well funded organisations make money from it, and has weaponised it against the general population.

I am a high voltage tester and know electricity very well.

You should watch: https://hackertube.org/watch/t-8TDOFqkQA

What kind of dogshit take is this? AI datacenters are a very different breed of facility in terms of their effect on their surrounding communities. Colossus is literally poisoning South Memphis.

All those people vote.

Great comments to use as example of Poe's law.

If your industry pisses off "most normal people," then maybe it's not a problem with normal people, but... it's a problem with your industry.

Industry exists within the context of society. It would be great if SV tech bros could understand this reality.

Nvidia got my money,

Micron a little as well,

AI corps with their hands out ?

they can go to hell. :}

Nice infill. Well done.

Someone hack out a libreOffice plugin called "poetry bucket" that lets you paint over, or into a document.

By someone, I mean, one of you AI agents out there.

Github in 12 hours.

See you at the pub.

> This is clearly voter sentiment about AI in general and big tech in general.

There is growing public sentiment about AI & Tech, but per exit polls that wasn't a Top 3 reason swing voters went blue (Economy, Wars, Corruption). Today's market correction is being driven by the majority in both houses of congress flipping blue. Trump and most Republican legislators were seen as broadly supporting AI / Tech and most Democrats are seen as being less supportive.

AI / Tech-friendly legislation is now likely to face a slower, more difficult path through committee and passage. IMHO, the actual impact of the political change is nowhere near 5% of company value, but outsized swings tend to happen on any adverse news when the market is already fearful they've bought into a high-priced bubble far in advance of actual earnings.

My definition for an Agent is "a marketing term for long running LLM Chat sessions that has increased access to use your computer to complete tasks it cannot otherwise do by itself".

That's my attempt at a universal definition for technical and non-technical users. How does it compare?

So in other words the industry will have to survive without taxpayer funded welfare handouts. Got it.

AI progress doesn't require doing it full ahead right now. Beyond the risks of getting out of control, you get bubbles if hype goes beyond economic reality. AI should be done more slowly with regulation and slower build out. Better to do it slowly than wreck the world with unexamined consequences.

It's only "progress" if it's making the world a better place. I have not seen LLMs do that at all. It only made everything worse.

Introducing moral hazard for AI investors is a bad way to spur on AI progress.

It's _your_ future perhaps. Not _the_ future.

We curtail literally millions of these "futures" every day around the world. They are called children. They are the literal future of humanity.

People need a reason to route.

With the housing bubble, it was because people owned multiple homes then struggled to pay two mortgages as economic conditions degraded, and banks were willing to absorb losses if the homes were sold below the cost of the mortgage.

What is encouraging people to route from the stock market? Bond yields aren't high enough yet to encourage people to retreat from stocks, and there's no other alternative investments. Plus, so much of the S&P is held in 401ks. And I agree, economic hardship is not widespread enough for people with significant investment holdings to start selling them off to live. Those who are struggling are those who used to be struggling too (thus, no extra money for investments).

There are also a lot of set it and forget it index investors that won't buy a dip, but won't sell either (unless they experience those serious financial hardships). That's the group I'm in.

Bought a bunch of dips in the last 5 years until I had to sell all of them at one point, because they kept dipping.

I already called it right.

Just like the last time before the 2022 market crash [0] and that was before you created your account.

[0] https://news.ycombinator.com/item?id=29508238