Nvidia's Bull Run Crashes: AI Computing Revolution Turns to Dust

This year, the AI chip giant NVIDIA has been extremely aggressive, single-handedly driving a major bull market in the US stock market. Will this company continue to create miracles and even change humanity in the future?

Recently, however, Wall Street has issued a pessimistic warning, believing that NVIDIA's bull market is about to collapse. Why is that? Are they trying to undermine their own stock market, or have they seen the real crisis behind the false prosperity?

NVIDIA has caught up with the wave of AI explosion in the United States. Of course, many people also say that this is a bubble, or that it is also a money-making tool for US finance.

Regardless, NVIDIA's performance in both performance and the stock market this year has been astonishing.

NVIDIA's financial report for the fiscal year 2024 shows that the company's total revenue reached $60.9 billion, a year-on-year increase of 126%, setting a historical record; net profit was $29.76 billion, a year-on-year increase of 581%.

This data is quite explosive, and the US stock market is in a state of jubilation. As of April 5th, NVIDIA's stock price has soared by 82.71% this year, with a market value of as high as $2.2 trillion.

Why is it that such a brilliant NVIDIA still has people pouring cold water at this time?

Of course, it is because NVIDIA's days ahead are not peaceful, and even the entire US stock market is not peaceful.

There are not only one or two people pouring cold water, and they are all top elites of Wall Street.

DA Davidson analyst Gil Luria believes that the huge increase of this chip manufacturer may soon come to an end.He also provided very precise forecast numbers, predicting that Nvidia's stock price will fall by a maximum of 20% by the end of this year.

Morningstar's equity strategist Brian Colello also gave a not-so-optimistic assessment, although he gave a neutral rating, but believes that Nvidia faces significant market and competitive risks.

Deutsche Bank pointed out in a recent report that Nvidia's stock price is already high and is expected to enter a down cycle soon, with a minimum decline of 3%.

We summarize some pessimistic forecasts about Nvidia on Wall Street, mainly focusing on three aspects.

First, the most important reason for Nvidia's explosive performance in the last fiscal year is that many of its major customers, such as Microsoft and Amazon, are hoarding its chips.

However, hoarding has ended, and these major customers may not make large-scale purchases in the next few years.

So, Nvidia's only way out is to develop new customers and markets, but small and medium-sized customers in the US AI industry simply cannot afford to purchase Nvidia's expensive chips in large quantities, which is why we see Huang Renxun quickly going to China.

This path is obviously not smooth, as there are competitors like Huawei in China.

Second, Nvidia is facing the risk of fierce competition. The company has attracted a lot of attention and also strong competitors.

Not to mention Huawei in China, just in the United States, chip giants like Intel and AMD have invested heavily in the development of new products, and even South Korea's Samsung has invested heavily in the AI chip field.The time for these giants to catch up won't be long. Nvidia's rise in recent years was largely due to chip giants focusing more on the vast consumer electronics market, where they once believed the demand for AI chips was not large enough.

In 2023, with the rise of AI applications such as ChatGPT, the battle for computing power became a focus, and the market began to panic and roll up AI computing power, hoarding AI chips.

Starting in 2024, chip giants such as Intel, AMD, and Samsung will obviously no longer allow Nvidia to monopolize this market.

It is clear that once entering the battlefield of giants, Nvidia is not enough to look at.

Third, the current US stock market bubble risk is very high, and Nvidia is difficult to support alone, and it is even difficult to be self-sufficient.

In addition to the above three reasons, some experts have seen the crisis from a higher dimension. Some people believe that the AI computing power revolution talked about by Huang Renxun is fundamentally boasting, and the so-called computing power revolution will eventually become a bubble.

Huang Renxun once said that in the next 10 years, Nvidia will increase the computing power of deep learning by a million times.

Tesla Musk quickly said that in the next one or two years, humans will shift from a shortage of chips to a shortage of electricity, because there is not enough electricity to operate so many chips.

OpenAI founder Sam Altman also issued a similar warning.

Huang Renxun himself admitted that the end of AI is photovoltaic and energy storage, if only considering that computers need to burn the energy of 14 Earths.Some argue that in terms of electricity, compared to the aging infrastructure in the United States, China clearly has an advantage. Thus, the artificial intelligence (AI) battle has not truly begun, and the U.S. is already at a disadvantage.

Setting aside whether AI computing power can increase a millionfold in 10 years, just considering the lack of electricity, the so-called AI computing power revolution will ultimately become an illusion.

In the past decade, the Fourth Industrial Revolution has been slow to arrive, and the pace of human technological evolution has been slowing down. The evolution of AI is far from being as revolutionary as some people imagine.