This sub has been dominated by doomers lately. It's been so annoying so yeah I'm gonna rub it in.
Yesterday the US economy was poised to go off a cliff due to tariffs. Today the tariffs have been delayed by at least 90 days. The stock market just shot up 8.5% last I checked.
The reality is events happen faster than anyone can respond to. You cannot predict the future. I personally have a broadly diversified portfolio, including international exposure. I had that pre-Trump-2.0. I still have it. I'm still buying at the same intervals I was before.
Who knows what's going to happen next. But as always, time in the market beats timing the market.
Trump orders creation of US sovereign wealth fund, says it could buy TikTok
Any thoughts as to what would be the impact of such a Sovereign fund on the broader market? Especially if the fund is going to compete with the private companies it terms of acquisitions. Seems like the opposite of small government.
The markets are overreacting to the DeepSeek news.
Nvidia and big tech stocks losing a trillion dollars in value is not realistic.
I personally am buying more NVDA stock off the dip.
So what is going on?
The reason for the drop: Investors think DeepSeek threatens to disrupt the US big tech dominance by enabling smaller companies and cost-sensitive enterprises with an open source and low cost, high performance model.
Here is why I think fears are overblown.
Companies like Nvidia, Microsoft, and other big tech firms have massive war chests to outspend competitors. Nvidia alone spent nearly $9 billion on R&D in 2024 and can quickly adapt to new threats by enhancing its offerings or lowering costs if necessary.Nvidia’s dominance isn’t just about hardware—it’s deeply tied to its software ecosystem, particularly CUDA, which is the gold standard for AI and machine learning development. This ecosystem is entrenched in research labs, enterprises, and cloud platforms worldwide.People have to understand the risk that comes with DeepSeek coming out of China. There will be major adoption barriers from key markets as folks worry about data security, sanctions, government overreach etc.US just announced $500b to AI infrastructure via Stargate. The government has substantial resourcing to subsidize or lower barriers for brands like Nvidia.Critiques tend to fall into two camps…
Nvidias margins are going to be erodedTo this I think we have to acknowledge that while lower margins and demand would impact the stock both of these are speculative.
Increased efficiency typically increases demand. And Nvidias customers are pretty entrenched, it’s def not certain they will bleed customers.
On top of that Nvidia’s profitability isn’t solely tied to selling GPUs. Its software stack (e.g., CUDA), enterprise services, and licensing deals contribute significantly. These high-margin revenue streams I would guess are going to remain solid even if hardware pricing pressures increase.
2. Open source has a number of relative advantages
I think open source is heavily favorited by startups and indie developers (Open source is strongly favored by Reddit specifically). But the enterprise buyer doesn’t typically lean this way.
Open-source solutions require significant internal expertise for implementation, maintenance, and troubleshooting. Large enterprises often prefer Nvidia’s support and commercial-grade stack because they get a dedicated team for ongoing updates, security patches, and scalability.