I think the difference here is that in both of those previous crashes, the entire market was involved. For AI, only a small number of companies have the resources to really get involved. If this collapses, most people will shrug and go back to whatever they were doing.
This is true. The 2008 crisis was about banks. Banks are linked to everything. Most companies aren’t that deep into an AI transition. They can still shrug it off and go back to what they were doing.
The big tech companies are fucked. The Saudis who just bought EA are fucked (their plan was to reduce costs by making games with a lot of AI tools). Nvidia is really fucked. The rest? They may have to reverse some plans, but they can shrug it off.
First, stocks tend to be highly correlated with “the market” (see financial “β”/“beta coefficient”). For example, look at, say, The Home Depot or Ford Motors. From January 2000 to January 2003 (spanning the dot com bubble) they each lost about a third of their value, yet these are not “dot com”-centric companies.
Second, the promise of AI is that it will help every company that has desk jobs. So every company has this expectation now priced into their stock, and if the bottom falls out, well…
Not an analyst/I don’t pick stocks, but just my 2¢.
I think the difference here is that in both of those previous crashes, the entire market was involved. For AI, only a small number of companies have the resources to really get involved. If this collapses, most people will shrug and go back to whatever they were doing.
This is true. The 2008 crisis was about banks. Banks are linked to everything. Most companies aren’t that deep into an AI transition. They can still shrug it off and go back to what they were doing.
The big tech companies are fucked. The Saudis who just bought EA are fucked (their plan was to reduce costs by making games with a lot of AI tools). Nvidia is really fucked. The rest? They may have to reverse some plans, but they can shrug it off.
Me and my 5 shares of AMD I bought for like 10 bucks.
Ty Su bae
Not sure I agree.
First, stocks tend to be highly correlated with “the market” (see financial “β”/“beta coefficient”). For example, look at, say, The Home Depot or Ford Motors. From January 2000 to January 2003 (spanning the dot com bubble) they each lost about a third of their value, yet these are not “dot com”-centric companies.
Second, the promise of AI is that it will help every company that has desk jobs. So every company has this expectation now priced into their stock, and if the bottom falls out, well…
Not an analyst/I don’t pick stocks, but just my 2¢.