I think that is a smoke bomb, anyone with a portfolio should diversify. People who really believe in the earning power of AI will not simply leave and run elsewhere, because until the bubble bursts, there is no vehicle that will run as hot and as fast as AI. Sad to say but AI in its mass market form is a gimmick and speculation is what is lettig it run. As it is, money that ran out from AI likely will wait to come back in soon enough.
I believe the momentum from expectations of US feds increasing rates are helping to add winds to the banks' sails. How much of a factor is it to their unrelenting upwards momentum though? I am concerned that Warsh is not an honest operator and everyone is gambling on defective information. How does he keep saying he wants to fight inflation, not make a move, and yet the market keeps insisting it will happen.
So many companies just dive into AI but dont know what they are getting into... just blindly having your workers use AI is going to incur huge costs without an equal increase in productivity. Leadership should learn what can work in favour of their industry before taking the leap. Then before full implementation, the enployees should be sent for training too.
AI is interesting to say the least. I saw the news that a youngster running his hedge fund (Situational Awareness - total holdings of 45 billion) had to do a fire sales of his AI holdings to cover the recent smack down that AI adjacent shares got. And because Sandisk was one of his larger holdings, that is why they took a big hit when he sold off at a haircut. But interesting to note that his track record from AI was huge (but unsurprising), 1000% last year, and 300% earlier this year.
Any orcl fans out there still refusing to accept that it is flaming out hard and that Larry is just using it as a money printer for himself now. There is absolutely no basis for his constant dividend declarations when they are struggling so hard and constantly need investors to fund their rubbish
I feel that aapl lucked their way into avoiding the fall into the AI hole. They likely saw it was the next big thing, tried to do something (like most of their side quests) then bombed out. Thing is, aapl always retreats to what is safe, so they made the call to put a stop to whatever in house project they had, then started onboarding from external companies. Once you avoid the pressure of having to constantly be the number one AI model, you don't have to sell your house, and can better focus your efforts elsewhere
The problem with this AI boom is that everyone wants to cash in, but the bubble's existence cannot be ignored. Players like SK Hynix can throw their hands up and say they are not the root of the problem and they are just creating parts that are in demand, but they too are throttling the production numbers for fear that the bubble collapses and they are caught with an oversupply that has to be sold at bad prices. While these companies gamble, mass market users are left holding the bag of poo... Want new GPU or memory for your computer? Get ready to shell out multiple times what you would have expected to pay a couple of years ago.
Even gambling on AI is not a sure win, look at Google, constantly spending money even s a highly successful juggernaut, it is still struggling to convince investors, having to constantly sell shares and debt. Look at Larry and our dear Orcl, trying to make a big play to build out AI centres and getting burned, then constantly selling more debt to finance the projects and firing workers. Very morbid and gross
Honestly AMD is not a hard call to make, timing it would be tricky if you want to maximise profit. Do you take profit at the various highs, then catch a ride back in when it dips, do you just wait until it goes to the peak before the AI bubble bursts...