anyone who wants to brainstorm with me on the next semiconductor plays, long or short, lets boogie.

No idea what the play is, but I don't know if there's enough time for the AI bubble to visibly burst.

What I mean with that is that the related sectors might not take a major dip. Random speculative shit just gets nuked, there might be some hits off VC capital and the old solid players will just keep getting bigger. The whole thing is also more intertwined than usual. The big AI companies have so much loose capital that they're investing in AI, either their own projects or promising start-ups.

The elements that caused the dot-com bubble aren't there. The domino effect of drying VC capital, forced liquidation of smaller players and lowered valuation of solid players with few of them getting nuked can't really happen anymore. Off just market cap the smaller players aren't as relevant and most of the mid sized ones don't rely on VC capital. The big players are now huge.

It took something like 15 years for Nasdaq Composite to fully recover from dot-com. I don't think there's room for more than maybe 6-12 months now and the "crash" today is maybe in the 25-33% region. To a degree most things are overvalued, but if they're solid then by todays logic that's where money goes to rest. Tech as a sector is just too big for a correction.

No idea about the short term movements though. I don't follow that closely enough to be of any use.

honestly if someone who doesnt get paid to know stuff like this has a strong opinion, im skeptical. because youre right, its incredibly convoluted and interconnected and there are a lot of checks and balances in place to keep a repeat performance from happening.

but whats interesting is how a few monolithic stocks prop up all these indices. i expect thats kinda new in a few ways, none the least of which is how a lot of them have value that consistently defies price discovery because of speculation.

for example; nvda is 7% of the NQ value last i checked and almost 5% of ES.

and amd and intel are desperate to come out with rival chips for machine learning. AND we have brand new domestic fabrication plants that are operating at greater output efficiency than the ones in taiwan.

so yeah i think maybe trotting out the 'ai bubble' comment was sloppy in as much theres a ton of potential volatility built into the indices right now and that potential for sudden violence doesnt even need to be predicated on malfeasance or greed or whatever.

Yea something like top 10 stocks are 50% of the NQ. Of the top 20 there's 5ish that're not directly "betting" on AI.

AI is a kinda weird semantic concept. It's underused and overused at same time. It's similarly used in marketing for consumers and investors. And it's value/direction as clickbait is whatever. AI effect is quite real. Once something becomes common tech it's not AI anymore. By remotely static definition we don't have Internet or anything that can interact with it without AI.

Machine learning is not going anywhere and we're not stopping using chips anytime soon. It's possible that LLM and/or generative AI isn't cost-effective, doesn't cover the R&D in isolation or they will be replaced by different forms of AI. I just don't think it matters. The current players are in the best position to develop the more efficient tech and/or replacements. And most importantly the biggest players just aren't reliant on the success of LLM/GenAI.

I didn't really even know what ai-bubble meant this time so a quick google gave me a random mashable article...

https://mashable.com/article/ai-stock-bubble-burst

...so apparently it took a month from NQ's high in July to dip 15ish points in August and that was enough to start taking victory laps for calling out the burst of the bubble. In October we were back at July numbers. That's nothing. It's just money doing its thing.

There's some macro stuff that I haven't looked into lately. QT/QE trends and specifics mostly. NQ loosely followed those before, 23-24 it started going against the trend. My first guess is that the bears and bulls are just fucking in the same pool now.

Also from central bank fuckery in recent times when in 2020 there was a literal plague projection, it took NQ 3 months to get back to ATH.