alt Hacker NewsNvidia Stock Crash Prediction
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According to nvidia’s 2025 annual report [1], 34% of their sales for 2025 comes from just 3 customers.
Additionally, they mentioned that customers can cancel purchases with little to no penalty and notice [2].
This is not unique for hardware companies, but to think that all it takes is just one company to get their sales down by 12% (14b$).
To cut to the point, my guess is that nvidia is not sustainable, and at some point one or more of these big customers won’t be able to keep up with the big orders, which will cause them to miss their earnings and then it will burst. But maybe i’m wrong here.
[1] https://s201.q4cdn.com/141608511/files/doc_financials/2025/a..., page 155: > Sales to direct Customers A, B and C represented 12%, 11% and 11% of total revenue, respectively, for fiscal year 2025.
[2] same, page 116: > Because most of our sales are made on a purchase order basis, our customers can generally cancel, change, or delay product purchase commitments with little notice to us and without penalty.
He doesn't really address his own question.
He's answering the question "How should options be priced?"
Sure, it's possible for a big crash in Nvidia just due to volatility. But in that case, the market as a whole would likely be affected.
Whether Nvidia specifically takes a big dive depends much more on whether they continue to meet growth estimates than general volatility. If they miss earnings estimates in a meaningful way the market is going to take the stock behind the shed and shoot it. If they continue to exceed estimates the stock will probably go up or at least keep its present valuation.
I'm surprised more people are not talking about the fact that the two best models in the world, Gemini 3 and Claude 4.5 Opus, were both trained on Google TPU clusters.
Presumably, inference can be done on TPUs, Nvidia chips, in Anthropic's case, new stuff like Trainium.
It's entirely possible it will crash, but I also don't think it'll go bankrupt or anything.
I don't typically buy stock to flip it right away; I have some Nvidia stock that I bought the day after ChatGPT was launched, and I bought a bit more when it was $90/share about a ~year ago. If it drops to $100, then I'll still be in the black, but even if it drops to $50, I'm not going to worry because I figure that I can just hold onto it until another upswing.
Nvidia has been around long enough and has enough market penetration in datacenters and gaming that I don't think it's going to go bust, and I figure that it will eventually appreciate again just due to inflation.
It goes to nearly zero if China invades Taiwan, and that seems like it has at least a 10% chance of happening in the next year or two.
As others have noted, the article is analysing the actual financial markets angle.
For my two cents on the technical side, it is likely that any Western-origin shakiness will come from Apple and how it manages to land the Gemini deal and Apple Intelligence v2. There is an astounding amount of edge inference sitting in people’s phones and laptops that only slightly got cracked open with Apple Intelligence.
Data centre buildouts will get corrected when the numbers come in from Apple: how large of a share in tokens used by the average consumer can be fulfilled with lightweight models and Google searches of the open internet. This will serve as a guiding principle for any future buildout and heavyweight inference cards that Nvidia is supplying. The 2-5 year moat top providers have with the largest models will get chomped at by the leisure/hobby/educational use cases that lightweight models capably handle. Small language and visual models are already amazing. The next crack will appear when the past gen cards (if they survive the around the clock operation) get bought up by second hand operators that can provide capable inference of even current gen models.
If past knowledge of DC operators holds (e.g. Google and its aging TPUs that still get use), the providers with the resources to buy new space for newer gens will accumulate the amount of hardware, but the providers who need to continuously shave off the financial hit that comes with using less efficient older cards.
I’m excited to see future blogs about hardware geeks buying used inference stacks and repurposing them for home use :)
> One of the questions of the 2026 acx prediction contest is whether Nvidia’s stock price will close below $100 on any day in 2026.
Maybe I’m missing something, but isn’t this just a standard American put option with a strike of $100 and expiry of Dec 31st?
Everyone is saying data center build outs are the main thing to look out for. But those data centers with all those gpus will need to replace those gpus right? Nvidia will come up with better, faster, more efficient gpus.
LLM use age won't crash either, it might decline or taper off but it's here to stay.
My concern is better models that won't need a whole of GPU, or China comping up with their own foundry and GPUs that compete. There is also the strategy issue, can Nvidia's leadership think global enough? will they start pursuing data centers in europe, latam, asia? can they make gpus cheap enough to compete in those regions?
The way things are, lots of countries want this tech local, but they can't deny the demand either.
Europe for example might not want anything to do with American AI companies, but they still need GPUs for their own models. But can Nvidia rebrand itself as a not-so-american-but-also-american company? Like Coca Cola for example. i.e.: not just operate in europe but have an HQ in europe that has half their execs working from there, and the rest from california. Or perhaps asia is better (doubt)? either way, they can't live off of US demand forever, or ignore geopolitics.
It's a problem if you have to keep asking "are we in a bubble?"
They're enjoying a massive demand for GPUs due to AI blowing up, at a time when there isn't much competition, yet the technology is already pleateauing, with similar offerings from AMD, not to mention proven training & inference chips from Google & AWS, plus the Chinese national strategy of prioritizing domestic chips
The only way the stock could remain at its current price or grow (which is why you'd hold it) is if demand would just keep going up (with the same lifecycle as current GPUs) and that there would be no competition, which the latter to me us just never going to be a thing.
Investors are convinced that Nvidia can maintain its lead because they have the "software" side, I.e. CUDA, which to me is so ridiculous, as if with the kind of capital that's being deployed into these datacenters, you couldn't fit your models into other software stacks by hiring people....
This is fun math to play with, but completely misses the point of how and why options are priced the way they are. Think of horse racing - when a horse is 1000 to 1 odds the odds of that horse winning are much, much lower. The odds are non-zero, but the oddsmakers are considering who the other side is and why they are buying that ticket.
Most options are actually used to hedge large positions and are rolled over well before the "due date". YOLOing calls and puts is a Robin Hood phenomenon and the odds of "fair pricing" are heavily affected by these big players, so using that data as some sort of price discovery is flawed from the get go.
There is one thing everybody forgets when making such predictions: companies don't stand still. Nvidia and every other tech business is constantly exploring new options, taking over competitors, buying startups with novel technologies etc... Nvidia is no slouch in that regard, and their recent quasi-acquisition of Groq is just one example of this. So, when attempting at making predictions, we're looking at a moving target, not systems set in stone. If the people at the helm are smart (and they are), you can expect lots of action and ups and downs - especially in the AI sphere.
My personal opinion, having witnessed first hand nearly 40 years of tech evolution, is that this AI revolution is different. We're at the very beginning of a true paradigm shift: the commoditization of intelligence. If that's not enough to make people think twice before betting against it, I don't know what is. And it's not just computing that is going to change. Everything is about to change, for better or worse.
NVIDIA Vera Rubin NVL72 unveiled at CES makes any other computer look like a pocket calculator, and that's why I wouldn't want to be bearish on NVDA right now, see https://www.nvidia.com/en-us/data-center/vera-rubin-nvl72
checks calendar Ah, NVIDIA earnings call is close - prepare for the inevitable doomer articles.
This is more of a derivative pricing article and has nothing to do with nvidia really
New competition is an issue. It wasn’t as lucrative to compete with nvidia in the past
The thing is, in this gold rush, Nvidia is the one selling shovels.
How much of their turnover is financed directly or indirectly by themselves, then leveraged further by their 'customers' to collaterize further investments?
Are they already "too big to fail"? For better or worse, they are 'all in' on AI.
That's smoke and mirrors. You can't logically predict the market. It never worked.
Predicting any stock will crash, be it from a technical analysis or from looking at fundamentals, is a fool's game. As Keynes allegedly said, the market can stay irrational longer than you can remain solvent.
The poster child for this is Tesla. Nothing fundamental justifies Tesla's valuation.
IMHO the only rational way to look at the future of AI and the companies from profit from it is to look at geopolitics.
The market seems to have decided there's going to be one winner of the AI race. I actually don't think that'll be OpenAI. I think it'll be Google or Nvidia of the companies currently in the race. But I also don't think it'll be either of them.
The magic of software is that it is infinitely reproducible. That makes it difficult to build a wall around it. Microsoft, Facebook, Apple and Google have successfully built moats around their software very successfully in spite of this. Google's big advantage in the AI race is their ability to build and manage data centers and that they'll probably end up relying on their own hardware rather than NVidia.
I think China will be the AI winner or they'll make sure there is no winner. It's simply too important to them. For me, DeepSeek was a shot across the bow that they were going to commoditize these models.
The US blocked the export of the best lithography machines AND the best chips to China. IMHO this was a mistake. Being unable to import chips meant Chinese companies had no choice but to make their own. This created a captive market for China recreating EUV technology. Chinese companies have no choice but to buy Chinese chips.
The Chinese government has the patience and infrastructure for recreating ASML's technology and it's an issue of national security. And really all it takes is hiring a few key people to recreate that technology. So Western governments and analysts who said China will take 20+ years to catch up (if they ever do) simply don't understand China or the market they're talking about.
They sound exactly like post-WW2 generals and politicians who thought the USSR would take 20+ years to copy the atomic bomb. It took 4 years. And hydrogen bombs came even quicker.
There's a story that should get more attention: China has reportedly refused a deal for NVidia's latest chips [1]. If true, why do you think they're doing that? Because they don't want to be reliant on foreign chips. They're going to make their own.
[1]: https://ca.finance.yahoo.com/news/nvidia-stock-slides-china-...
The simple answer to the question:
Nvidia stock crash will happen when the vendor financing bubble bursts.
They are engaged in a dangerous game of circular financing. So it is case of when, not if the chickens come home to roost.
It is simply not sustainable.
The real question is what else will this cause to fall when it does happen.
The option market is an insurance market.
Most people buy low-strike puts as insurance against catastrophic market events.
Since catastrophic crises are rare, the price of these puts is quite low. But since many people fear a crisis, the price is very inflated over the actual probabilites. Which is why there are lots of people selling those puts as a business. These guys will bite the dust in case of a major crisis, but will make a ton if the market stays afloat.
Realistically, the current US government is so obsessed with its image that it will do everything to avoid a market crash during its term. The president has been pushing for lower rates for a while, and he's likely going to succeed in removing the head of the Fed and do just that. Lowering interest rates is just another way of pumping investment.
NVidia is definitely not going below $100 in 2026.
It's forward looking P/E is 24-26. That doesn't seem like a huge crash is coming. It could come down a bit but they print money. They also have potential car market and robots coming in.
was expecting some actual reasons presented as to why this would happen. instead got some math.
does that include the chance for a stock split?
I'm calling it - this is a submarine article to prove that Haskell is used in the real world to solve actual problems
Worth noting that the implied volatility extracted here is largely a function of how far OTM the strike is relative to current spot, not some market-specific view on $100. If NVDA were trading at $250 today, the options chain would reprice and you'd extract similar vol for whatever strike was ~45% below. The analysis answers "what's the probability of a near-halving from here" more than "what's special about $100." Still useful for the prediction contest, but the framing makes it sound like the market is specifically opining on that price level.
I’m more curious how these “future” contract will work out. Supposedly, a bunch of RAM is paid and allocated for that isn’t even made yet. If the bubble ever pops, the collateral is going to be on the order of 2007 subprime mortgage crisis
"Predictably" prediction markets have opened up space in the void left by journalism for tea-leaf reading with the fig leaf of mathy jargon.
I mean common sense reasoning tells me that if OpenAI has decided to turn into an ad business, the actual return expected from investing into compute isn't going to be nearly as great as advertised.
Since there's such an interdependence between nvidia and the other companies involed in AI to the point that if one fails they all fail, shouldn't the analysis focus on the weakest link in the AI circle jerk?
People don't actually believe this type of analysis... do they?
Nvidia PE ratio: 44
I do hope they crash so that I can buy as much as possible at a discount.
Click bait for teaching options analysis
It's easy to predict that a bubble will pop, but there's a variance in the timing of approximately half a human lifetime, and if you don't guess that correctly, you throw away yours.
Everything that can't go on forever will eventually stop. But when?
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Technical analysis is amazing, it is most refined form of pseudoscience.
This article goes more into the technical analysis of the stock rather than the underlying business fundamentals that would lead to a stock dump.
My 30k ft view is that the stock will inevitably slide as AI datacenter spending goes down. Right now Nvidia is flying high because datacenters are breaking ground everywhere but eventually that will come to an end as the supply of compute goes up.
The counterargument to this is that the "economic lifespan" of an Nvidia GPU is 1-3 years depending on where it's used so there's a case to be made that Nvidia will always have customers coming back for the latest and greatest chips. The problem I have with this argument is that it's simply unsustainable to be spending that much every 2-3 years and we're already seeing this as Google and others are extending their depreciation of GPU's to something like 5-7 years.