Caution on Nvidia's AI Hype and Potential Capital Destruction

3 months ago

Sven Carlin, Ph.D.

"Investors, stocks are still going up on the AI exuberance. Nvidia is up 77% over the last 6 months, but I don't fear a crash. Everybody thinks even if it crashes, then it goes higher because that's how usually stocks do, always go up. I might disagree because AI might disrupt itself. We are already seeing layoffs. You don't have just a crash and then a recovery. There is no recovery. Does only destruction and that's exorberated by the current capex and buybacks."

The speaker offers a cautionary view on Nvidia, highlighting its recent impressive gains amid the AI boom while warning that the current exuberance and high capex and buyback activities might lead to capital destruction rather than a smooth recovery.

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