September 4, 2024
Nvidia shares fell almost 10%, erasing $278.9 billion in value—the biggest single-day loss ever for a US stock. Is this the beginning of the end of the AI revolution, and is this a good opportunity for investors to start buying Nvidia’s stocks at a better price?
Nvidia invested a lot in AI and given that this bubble has begun to burst, it was only natural for NV to start feeling the repercussions. NV forgot its routes, which are graphics GPUs, and recently focused on providing hardware for data center platforms. I cannot blame them since the H100 Tensor Core GPU is way more expensive than the RTX 4090, but NV “forgot” to devote some time to updating its graphics GPU portfolio with new models, helping bring down the whole IT market. The RTX 4090, the first model of the series, was released on October 12, 2022, and it still doesn’t have a successor, with the RTX 5000 line expected to be released in 2025! This is one of the most extended periods for a GPU line! When no new GPU models are available, you cannot find the previous generation ones at better prices, which is what most users count on in these difficult times to update their systems. Without PC upgrades, the whole PC parts market is going down since there is no need to change parts like the PSU, the chassis, etc.
Moreover, with such high GPU prices, most users cannot afford to build a new and potent gaming system. I remember 10-15 years ago, a top-of-the-line GPU was around 500-600 euros/dollars, but through several GPU generations, we were accustomed, unfortunately, to seeing prices well exceeding 1000 euros/dollars. It is absurd to have to pay nowadays more than $1740 to get the “most affordable” RTX 4090, which is almost two years already in production! So, excuse me, but I won’t mind seeing NV get a backlash from the market and lose a massive value in its stocks. I hope this is a good lesson for its greedy management, which should start thinking of the average consumer who trusted NV and helped it become the largest GPU manufacturer.
