Why
The expectation is that they greatly exceed earnings - so even if they do, the pop won't be anything insane, maybe 6-8% or so. That's probably what's going to happen.
However. If they even slightly falter, then it's going to crater 10-15% at a minimum - I see 650 as a reasonable spot to exit honestly.
I'm just seeing all of the little slots on SoFi that dozens and dozens of people are buying in and it feels like they're lambs being brought to slaughter. Double top, majority of investors only in it for the momentum (which has been waning the last few days), Google's chips, so many reasons for it to fall and for it to fall \_now\_.
I'm a software engineer at an AI startup and yeah I see the insane costs/demand for these but it's a \_hardware\_ company and not software that can scale infinitely at no marginal cost. Now that I think about it, I really think I should've invested in it when I first saw that side of things but now I'm just doing it out of spite. Or that the one other big short I did was COIN from 180 => 150 and this feels the same sentiment-wise. idk either way works
Positions
- (-20) NVDA @ 705 - 134% of that account, started on 02-06
- 200 NVD @ 8.95 fifteen minutes ago
- Other more reasonable choices
Afterword
Well in the time I wrote this it fell from 740 to 727 so never mind I guess, it's slightly less profitable of a trade but the point still stands (which is left as an exercise for the reader)
Edit
Edit 2
- Closed NVD @ 9.27
Edit 3
- Y'all - It is just money guys and here's the thing: I don't lose when it is worth more than my account (cause it already is). I lose when the losses are worth more than my account. Just going to hold through earnings, any losses are offset by the money market interest anyways
Edit 4
- NVD is 1.5x inverse NVDA. I did not close the NVDA lol
Edit 5
- My oh my the bullish comments have slowed down! What happened?!?
- Anyways those were kind of proving my point. The price reflected something like 99% chance of maintaining zero competition and continuing the insane growth for like a decade. That's true that's what it looks like now, and I feel like the underlying facts are going to change soon for its valuation. The price reflected something like a 99% chance of absolutely demolishing earnings and didn't leave a lot of upside for if they even do.
- Also, I felt like that was the reverse sort of effect happening - only people buying at that level were shorts capitalizing and it's kind of like how we hit a super-bottom in 2022 from margin calls. Shorts have already \been\ getting wrecked which is why it was a better entry at 740 than say 500.
- I can't even drink yet so stop trying to flex your buys from when I was in middle school lol