alt Hacker NewsASML's strong orders ease fears AI spending boom is running out of steam
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Everything's fine, don't look at CoreWeave's ticker, look at (picks random other healthy company) ASML instead.
I’d think that orders for long lead time rivalrous slots of a very finite resource are basically OOTM call options for future demand. It says something that firms think demand is plausible but not a whole lot about how probable it really is. You can always idle these things, you can’t conjure one immediately.
The title makes no sense... how does ASML orders where you get the machine in the far future predict AI spending?
I think the big question is how many orders are '0 or close to zero dollars cancellation fee'?
Aren't they always selling everything they manufacture? No matter if you are in a boom or a bust, ASML will always have a years long backlog.
Phew. That was close. Thought we would be able to upgrade all of our tech for a moment there!
I don't think "running out of steam" is the expected failure mode here. We are talking about bulk ordering machines that produce chips that in turn will hit the market in half a decade. That's like adding power plants to the grid that runs the ball pump inflating the ballon. ASML will probably be the last that faces the ripples of the AI bubble going bust.
The internet bubble popping did not cause internet traffic to decline -- on the contrary internet traffic increased rapidly during the bubble pop.
Similarly, I don't think the AI bubble popping will cause token demand to decline. On the contrary, I predict the bubble pop will happen because of a recognition that tokens are a highly competitive industry, thus the margins of frontier AI firms aren't sustainable, popping their valuations.
Despite the fact that chip making machines come before chips, this seems like a lagging indicator, not a leading indicator.
These would be among the first orders placed in a build-out plan, and the build-out plans are first in a boom. The bust phase would very well happen before the orders are completed, and orders would not decline until the bust phase starts?
Until we find a better substrate, silicon IS the future.
no it doesn't
Strong orders predicated on future earnings of OAI and Ant?
I thought the fear is that AI spending is much higher than the earnings
The stock price did not move.
So nothing was eased.
If you buy the machines and not use them, at most you lost several hundred of millions of dollars (not really, because that machine still retains value for you or someone else later).
On the opposite end, if you don't buy the machines in time, mispredict the demand and can't produce, you lose tens of billions.
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Feb 2000: Record orders for chip gear push SEMI index to four-year high
https://www.eetimes.com/record-orders-for-chip-gear-push-sem...
> Capital equipment suppliers have been increasing their forecasts for revenue growth in 2000 as chip manufacturers begin to add new wafer fabs and backend assembly plants. Last week, for example, Applied Materials Inc.–the world's largest semiconductor equipment supplier–announced it had increased its forecast for industry growth in wafer fab equipment sales to 46% from a projection of 19% at the end of last year (see Feb. 16 story).
> The strong wave of new orders “confirms the strength of the current market cycle,” said Stanley T. Myers, president of SEMI.
This time it's different.