Not mentioned in the article but TSMC (company that actually manufactures the chips for everyone (except intel who manufacture their own designs)) has lost nearly 17% of it’s stock price over the past month, 7% in the last week.
All of these companies were being valued based on the assumption that the number of GPU data centers being built would increase as time went on. Essentially that the demand for the these various products would not just stay as high as it is, but keep getting higher.
This is just a bunch of analysts saying “ok, well, maybe the number of data centers being built will not increase drastically, and the demand for these products will stay the same”. The real blood bath comes if they start saying “there will be less datacenters constructed next year than there are currently under construction.”
The current shift in sentiment probably comes from the “disappointing” info from the companies that would be buying all the compute from the data-centers. Google missing ad revenue growth targets due to Gemini cannibalize search. Anthropic preparing to IPO and being forced to show less than stellar financials.
I suspect that this down turn is temporary and Valuations will rise angain and we will see another big crash before this hype cycle truly dies.
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It was a down week, but not unheard of and markets are still up a solid amount going back a year. Retirement accounts are still ahead of 6 months ago most likely, so have some perspective. Prices were too high as it was so maybe more correction, but then funds are on sale each time paycheck buys some shares. Here’s one from three years ago but sounds like could be today, a fan of the blog and want others to do better too! mrmoneymustache.com/2023/09/04/interest-rates/ Also mrmoneymustache.com/2026/09/25/will-the-ai-bubble-destroy-our-retirement/
POP! Goes the bubble.
How can they be losing money when prices are higher than ever
New information has come to light that makes them believe that the growth they expected would occur in the future will be smaller than they previously thought. So they haven’t lost any money, except for the people who were betting on the potential future growth being higher.
Stocks are based on emotions rather than success or failure.
I’m talking about the prices of the product they are selling.
They don’t price their based on cost + profit. They price their product based on what analysts think the market will bear.
And for your original question: “How can they be losing money when prices are higher than ever”
They didn’t lose money. In Q3 of 2026 they beat earnings estimates by 27%, and missed revenue by 0.25%. The stonk dropped because its price was based on analysts’ guesses on what it would do in the future, and they’ve revised that estimate down based on Intel’s earnings report and what they think the AI market is going to look like. And so the stonk price collapsed all the way back to where it was in…April of this year.
The materials are also surely more expensive.
If their projections are lower and deemed to be realistic compared to other stocks then people willmove to the other under the assumption it will perform better.
I’m annoyed when a bloodbath on Wall Street is reported and 1.) the blood in question is metaphorical; 2.) it’s the retirement funds of average people that suffer because those who make a living gambling on these stocks have a lot more flexibility to dance around changing market conditions (and take tax write offs if they do manage to lose money).
I guess we’re trying to make it so that, like the car industry, domestic companies only make super expensive products at high margins, and the only affordable products come from China, which we will tariff to oblivion, leaving the populace with no options.
We don’t have any domestic manufacturing left in almost all sectors, after they outsourced, the ones that didn’t follow went out of business, or had to chisel down their workers, their pollution controls, and their quality.
There aren’t US made options left for most stuff, even though we invented most of this stuff and it’s mass production. We handed east asia all of our tech, built their factories for them, on 99 year leases in china, that could be taken away at any moment, and enjoyed making profits on the backs of the exploited masses of Asians and other low cost countries.
Tariffs on these goods is a union issue, that the democrats betrayed the unions let the current president co-opt it to do an end run around the dems on the left, obviously he was always full of shit, but we all know the voters at large don’t know that.
You have just described the current state of the steel industry.
Lol, there’s practically no domestic steel production any more!
Its much smaller than it once was but we definitely still have a domestic steel industry. And it currently has more order volume than it can handle and is raking in the profits while continuing to raise prices.
I think domestically is mostly just scrap steel at this point. They still may do some of the low grade takkanite ore or whatever that is left in the iron range, the largest iron deposit ever found, now cleaned out of the good stuff. All that World War gear and all.
Edit: The Iron range is in northern Minnesota, they shipped it over the great lakes, or down the old muddy, the mississippi that is, which they can reach the ohio and whatever and get it all to the smelters around ohio and Pennsylvania or whatever.
Oh there are still options…there are always options
Intel has top of the line CPU products but I think they have bad management to be at loss making.
Woah do you think
When cheap ram, gpu, and ssd?
Late 2028 maybe. But imo the floor has been permanetly raised, it won’t be as cheap even when it is cheap.
Get housing to be affordable and the higher prices on everything won’t even matter. Wages are up more than the cost of goods. It’s high rent and mortgages that are bleeding America dry.
iNfInItE gRoWtH
Contracts for 2029 are already being reduced due to the 2027 and 2028 long term supply agreements. It wouldn’t be long before 2029 is 40-50% committed
Imma disagree with al lot of the sentiments in this thread, cause I’m actually hopeful they will go back to pre ai pricing. But that’s because the economic crash is going to take a ton of people out of the middle class. Very few people with disposable income are buying, and the ones that could likely already have. No one is going to be paying for tokens, business won’t be able to sell their products they consume tokens to produce, contemporary data centers are already a cost sink and will only become more of a spread sheet liability, aws and Cisco might keep their current stock of hardware, but most of the venture capital is going to evaporate within a year. The government will bail out the big investors, but there has been so much speculative data center build out that will need to be liquidated.
With AI getting to the point it can decompile and rewrite any software you will be lucky to be able to buy home components at all in the future. The wealthy want to take over compute and the only way to protect their code (AKA Imaginary Property) is to prevent you from having it in memory or stored locally.
In q3 of 2028
Fantasy money vanishes, more at 11.
sure, but all fiduciary money is fantasy money
Technology!
Economics!
^ Lemmy’s understanding of economics right here. We’re staring down the barrel of Great Depression 2.0 and the trigger finger tightened over the last three days. Lemmy’s take:
“The stock market is gambling for rich people and nothing to do with the real world. The ‘economy’ and ‘economic indicators’ are for rich people and, being poor, I don’t participate in the economy.” Then goes on to bitch about how the economy is fucking them.
But the stock market seems to have nothing to do wrih the “real” world anymore or we wouldn’t have to be saying a k shaped economy. Used to be shit was bad for people stokes fell now we have had covid where they didn’t happen and now.
Trying to discuss economics on Lemmy is an exercise in futility, but also the ‘value’ of some of these companies is basically fake money in my opinion.
Its still fantasy money. Sure the effects are real but unless the system is overhauled no one here is going to do anything about it. May as well laugh otherwise you’re crying and ripping your hair out in a corner.
No, this is more like the 2008 financial crash, where the underlying problem was pervasive fraud and regulators turning a blind eye.
Unfortunately not. This will be quite unlike the 2008 crash, or the 2000 dotcom bust. It is MUCH more serious than either of these two.
The key difference is the leverage, there is a circle where the suppliers are highly borrowed, and their sales are to companies that are borrowing to buy it. This has a huge knock on effect as the companies in question are a massive slice of the key indexes which means everyone’s pension/401k/super is invested in index funds as the “low risk” option - when the index tanks, the pension funds tank which means the general population are looking at massive drops in wealth. There’s also a bunch of knock on effects
What’s worse is that the current Fed board are on record saying interest rates will go up to control inflation and they’re not going to support the market ( a la 2008) which puts even more pressure on them. The current US govt has flagged in a million ways they are economically incompetent so don’t expect any smart decisions there
There is a very very real probability of “The greatest depression” or the the great depression 2 boogaloo.
We well see been hearing for awhile a nothing happens. Just like Canada’s house crash keep hearing about it for decades and never happened.
You are hundred per cent correct, sorry about all the down votes. This crash is looking like it’s going to be a very ugly one. The modelling I’ve done suggests the closest fit is the oil crisis of the 70s, it could be worse than that though.
In an unexpected turn of events, the downturn extended to server manufacturers
unexpected? servers are computers full of RAM
Bighorn ram: bahh (“I’m in danger”)
That depends heavily on what the server is used for… But yes, AI servers are full of RAM, and GPUs which have even more RAM on them.
Generally speaking, RAM and RAM performance is one of the most important characteristics of any server that is actually being used. Processing power (single-threaded/multi-threaded depending on application) is the most important, but without the RAM to handle it, it becomes nearly useless.
Wall Street spent years pricing every chip company as if humanity would soon need a GPU to make toast. Then Intel mentions that people aren’t buying overpriced PCs, and a trillion dollars evaporates. Apparently the most advanced semiconductor technology on Earth still can’t manufacture realistic expectations.
Wait, you don’t make your toast by disabling the fans and then overclocking your GPU? How do you make toast then??
I outsource it to the cloud, obviously. For $29.99 a month, an AI agent sends my bread to a data center, burns through 40 gigawatts, and returns a hallucination of toast. The premium tier includes actual crumbs, but that’s enterprise pricing.
Does it at least include SSO?
It does! But it’s only a single hard coded user credential that everyone shares.
Excellent. I won’t have to implement a password policy and can just monitor that single password to be strong enough.
I’ll just have to think of a way to share the password with the team. A post-it? An email? Maybe displayed on a big screen in the lobby so the team can see it coming into the office? But then they won’t see it when they WFH.
Ugh! Choices.
I’ll have to think this through! Maybe require people in the office full-time again? They’ll understand right?
Edit: I feel like I should be adding a /s to this juuuuuuust to be sure…
SSO is only available on the Enterprise Toast plan. You’ll also need a minimum of 500 seats, a dedicated account manager, and a six month onboarding process.
I won’t do it without a customer success manager hounding me every 2 weeks.
It manufactures billions short term for a few people, who don’t care about the shit storm they created. They’ll be sleeping like babies (or with babies, depends on the billionaire in question) while the rest of the world starves.
You are replying to a bot. This bot posts an article then a 3-4 sentence comment with a witty remark at the end.
Also, putting the following comments as a whole into Pangram gives 100% AI as result (Pangram is known to underreport sooner than to overreport):
Tap for spoiler
Nothing screams disruptive innovation like a billionaire scolding young people for not being excited enough about the technology making entry level jobs disappear. Apparently Gen Z should stop chasing what was cool five years ago and start chasing whatever Sam Altman needs investors to believe is cool this quarter.
Funny how »global allocation efficiency« always ends with everyone renting access from the company whose CEO wants to do the allocating. Local AI offers privacy, independence, and no monthly tollbooth. Apparently the real waste of RAM is letting people control what they own.
Wall Street spent years pricing every chip company as if humanity would soon need a GPU to make toast. Then Intel mentions that people aren’t buying overpriced PCs, and a trillion dollars evaporates. Apparently the most advanced semiconductor technology on Earth still can’t manufacture realistic expectations.
Of course it reeks of AI. We all write like AI now. Half the internet sounds like a chatbot trying to pass as human, and the other half is humans desperately trying to sound like chatbots. At this point, sounding natural is probably the biggest giveaway that you’re a bot.
Cisco just handed a 27 year old unlimited AI tokens and the keys to 98% of its codebase. Somewhere, a senior engineer is quietly updating their resume. Rewriting code is easy. Discovering why that horrifying 1998 workaround exists is the actual final boss.
Intelligence flagged a possible Chinese spy with access to Nvidia’s CEO, and the response was apparently to worry about Nvidia’s share price? So the chips are too sensitive to export, but the intelligence is too sensitive for the stock market? Very efficient system: national security gets the risk, shareholders get the protection.
The best part is that we spent 15 years cutting emissions just so a handful of billionaires could burn the savings teaching chatbots to summarize emails nobody wanted to read. Then they’ll sell us AI powered climate solutions, funded by taxpayers, to clean up the mess. Innovation really is a beautiful circle.
Google spent decades telling publishers to create quality content, then built a machine to read it aloud without sending anyone to the source. Now it’s shocked that the machine makes less money. Congratulations: they’ve invented a search engine that eats both its suppliers and its own business model.
Musk wanted to be Tony Stark. Somehow he ended up with Vladimir Putin in his fan club. The truly dystopian part isn’t the praise: it’s that one billionaire can turn critical communications infrastructure into his personal mood ring while governments keep treating him like a public utility with a podcast.
I’m glad more people are catching on to this bot. I’ve been sounding the alarm on this account since July despite the sea of downvotes that I get for it.
Huh.
in August, [the US government spent] $8.9 billion for a nearly 10% share of Intel, converted out of CHIPS Act grant money. Today, the federal government is Intel’s largest single shareholder.
Wonder what that 8.9 billion is worth now…
So they bought 10% for $8.9 billion? So Intel’s market cap is only $89 billion? No, earlier this month it was $350 bn. So what’s going on here?
I’ve read somewhere that it is still a more than 200% grow in value, even considering the last dive. Will post the source if I find it again… EDIT : Here “Even accounting for Friday’s expected drop, the value of the government’s stake in Intel has grown by 280%.”
Ah, that’s interesting. Curious if the govt will scoop up more of Intel or stand pat, then. We’re kind of in uncharted waters here.
Why is the government buying any of Intel?
The secret ingredient is crime (corruption)
It’s starting to pop?
There are already supply contracts all the way through 2027, ‘28, and most of ‘29. Even if it pops today, new supply wouldn’t start to become available until closer to 2029 at the earliest. And the price floor has permanently been raised, because the manufacturers have seen what consumers are willing to pay.
