Essentially, AI demand is so high that there is now demand for new tranches of worse products because we can’t increase the supply of good products in time. Same thing is happening with power turbines, with lots of lower-efficiency gensets hitting the market because there are buyers. I assume these stocks are getting gang banged by hedgies just to play the volatility rather than express any fundamental view of how long worse products will be valuable. If they really believed these will be big companies in 10 years, why is Nvidia’s P/E not at like 100?
Essentially, AI demand is so high that there is now demand for new tranches of worse products because we can’t increase the supply of good products in time. Same thing is happening with power turbines, with lots of lower-efficiency gensets hitting the market because there are buyers. I assume these stocks are getting gang banged by hedgies just to play the volatility rather than express any fundamental view of how long worse products will be valuable. If they really believed these will be big companies in 10 years, why is Nvidia’s P/E not at like 100?
I’ll be honest, even most of the terminology goes way over my head.
What are the key takeaways for our stocks and portfolios?
Good stuff as always