r/investing Mar 19, 01:50 PM
Wait, I thought it was the "SaaSpocalypse" because AI was stealing all the jobs. So why are chip makers falling on great earnings? Micron falls more than 5% despite blockbuster earnings. Here’s what market watchers are saying
This is not a good sign for the tech sector and is far from the only example. Falling high performing stocks despite meeting or even beating estimates has started to become a pattern in the industry.
Remember Microsoft dropping 11% in one day not that long ago? And even Nvidia was down 4% on last earnings. NVIDIA for crying out loud! The darling of the entire US stock market.
This speaks to more than just a SaaS problem as some newspapers wanted to say. This is a much more generalized problem for growth stocks. I mean where can you go when perfect isn't good enough for the market, especially given how less than perfect the future looks. Besides the Iran oil shock (which is nothing to sneeze at btw), it's the structural issues plaguing AI that everyone has ignored (except stalwart cranks like Ed Zitron). AI is not profitable for anyone involved but the chip makers. The leading AI company, OpenAI, is begging for another $100 billion to stay afloat after years of record breaking spending. That's not great for the industry, especially with the credit market also falling apart in the near term (Blue Owl, Blackstone, etc).
No, I'm not saying AI will never be good for anything, but right now it sure isn't good for making a profit, and the credit funnel is drying up while chaos rages in the ME.
So there is my DD, feel free to disagree.
submitted by /u/YeahBuddy5000
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