People ask why I work in finance.'n'nMost of the time, it’s boring.
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People ask why I work in finance.
Most of the time, it’s boring. Truly boring. Markets drift. People get in their feels. Nothing happens except sentiment swinging from euphoria to despair and back again.
But when it isn’t boring? It’s the greatest show on Earth.
We just spent two straight weeks screaming about an AI bubble. Every headline was doom. Every pundit was prophesying collapse. You’d think Western civilization was getting priced for liquidation.
Meanwhile, my position never changed: whether or not we’re in a bubble, sentiment didn’t match the fundamentals. On a macro level, the Fear & Greed Index was sitting at extreme fear. Volatility was spiking. Tech sold off hard. But at the company level? The numbers weren’t cracking. Not at Microsoft. Not at Google. And certainly not at Nvidia.
For saying that, I got called an apologist more than once. As if noticing a disconnect between emotion and data is somehow ideological. It isn’t. It’s my job. I don’t declare boom or gloom. I look for when the narrative and the numbers stop lining up.
And sure enough—here we are. Nvidia beats expectations again. EPS $1.30 vs $1.26. Revenue $57B vs $55.2B expected. Data center revenue alone at $51B versus the $49B consensus. Then they guide Q4 revenue to $65B when Wall Street was bracing for $62B.
That’s not a miss. That’s a statement.
I don’t know where the market goes next. Nobody does. But I can tell you this much: the world didn’t end. Western civilization continues. The apocalypse has been postponed.
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People ask why I work in finance.
Most of the time, it’s boring. Truly boring. Markets drift. People get in their feels. Nothing happens except sentiment swinging from euphoria to despair and back again.
But when it isn’t boring? It’s the greatest show on Earth.
We just spent two straight weeks screaming about an AI bubble. Every headline was doom. Every pundit was prophesying collapse. You’d think Western civilization was getting priced for liquidation.
Meanwhile, my position never changed: whether or not we’re in a bubble, sentiment didn’t match the fundamentals. On a macro level, the Fear & Greed Index was sitting at extreme fear. Volatility was spiking. Tech sold off hard. But at the company level? The numbers weren’t cracking. Not at Microsoft. Not at Google. And certainly not at Nvidia.
For saying that, I got called an apologist more than once. As if noticing a disconnect between emotion and data is somehow ideological. It isn’t. It’s my job. I don’t declare boom or gloom. I look for when the narrative and the numbers stop lining up.
And sure enough—here we are. Nvidia beats expectations again. EPS $1.30 vs $1.26. Revenue $57B vs $55.2B expected. Data center revenue alone at $51B versus the $49B consensus. Then they guide Q4 revenue to $65B when Wall Street was bracing for $62B.
That’s not a miss. That’s a statement.
I don’t know where the market goes next. Nobody does. But I can tell you this much: the world didn’t end. Western civilization continues. The apocalypse has been postponed.
@atomicpoet These late econ posts are quite informative for a reader like me, who looks at world news from a narrative point of view (I'm not investing or anything). However, aren't some of the bubble fears more about private credit & equity, circular lending, etc?
The size & risk of those trades has balooned, they're quite intertwined, and of course there's much less public info about them. Therein lies some of the gloom, IMHO. Not to detract from your analysis, which seems sound. Thanks!
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@atomicpoet These late econ posts are quite informative for a reader like me, who looks at world news from a narrative point of view (I'm not investing or anything). However, aren't some of the bubble fears more about private credit & equity, circular lending, etc?
The size & risk of those trades has balooned, they're quite intertwined, and of course there's much less public info about them. Therein lies some of the gloom, IMHO. Not to detract from your analysis, which seems sound. Thanks!
jandi I’m not saying there isn’t an AI bubble. I’m saying there’s no imminent threat of one popping right now. My job is to identify when sentiment and fundamentals misalign—and over the past two weeks, they’ve been completely out of sync.
That said, here’s why I don’t buy the idea that “all the money is just being circuitously re-invested into each company.”
The main players aren’t fragile startups passing the same dollar around. They’re mature companies with enormous cash-producing cores. Microsoft prints money from Windows and enterprise software. Google prints money from Search. Nvidia prints money from GPUs. Amazon prints money from e-commerce and AWS. These businesses would continue operating even if their AI efforts vanished tomorrow.
On top of that, they’re sitting on mountains of cash. And when you’ve got that kind of cash flow, you have to put it somewhere. Sure, they can issue dividends or buybacks—and they do. But if all they ever do is return cash, shareholders eventually ask a simple question: “What are you doing to grow?”
They can also let the cash pile up. But again, shareholders will ask for their cut.
So the logical next option is to invest in an emerging technology. And right now, AI is the emerging technology with the clearest demand signal. It’s the sector that, if it breaks open, reshapes everything. None of these companies want to be the one that missed the platform shift.
And just to be clear—tech giants don’t have to pour their capital into AI. Meta dumped $70B into the metaverse. Nvidia tried cloud gaming. Apple released… a sock. They all experiment. They all diversify.
Capital isn’t recirculating in a closed loop. It’s flowing toward the only part of the tech ecosystem that’s actually generating outsized demand.
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People ask why I work in finance.
Most of the time, it’s boring. Truly boring. Markets drift. People get in their feels. Nothing happens except sentiment swinging from euphoria to despair and back again.
But when it isn’t boring? It’s the greatest show on Earth.
We just spent two straight weeks screaming about an AI bubble. Every headline was doom. Every pundit was prophesying collapse. You’d think Western civilization was getting priced for liquidation.
Meanwhile, my position never changed: whether or not we’re in a bubble, sentiment didn’t match the fundamentals. On a macro level, the Fear & Greed Index was sitting at extreme fear. Volatility was spiking. Tech sold off hard. But at the company level? The numbers weren’t cracking. Not at Microsoft. Not at Google. And certainly not at Nvidia.
For saying that, I got called an apologist more than once. As if noticing a disconnect between emotion and data is somehow ideological. It isn’t. It’s my job. I don’t declare boom or gloom. I look for when the narrative and the numbers stop lining up.
And sure enough—here we are. Nvidia beats expectations again. EPS $1.30 vs $1.26. Revenue $57B vs $55.2B expected. Data center revenue alone at $51B versus the $49B consensus. Then they guide Q4 revenue to $65B when Wall Street was bracing for $62B.
That’s not a miss. That’s a statement.
I don’t know where the market goes next. Nobody does. But I can tell you this much: the world didn’t end. Western civilization continues. The apocalypse has been postponed.
@atomicpoet It seems to me as a casual oberver that NVidia's value is solid based on their sales, but that those sales could evaporate if the companies that are driving up their prices go away.
Good to sell shovels, but you could get stuck with a lot of extra shovel inventory when the gold rush ends.
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@atomicpoet It seems to me as a casual oberver that NVidia's value is solid based on their sales, but that those sales could evaporate if the companies that are driving up their prices go away.
Good to sell shovels, but you could get stuck with a lot of extra shovel inventory when the gold rush ends.
Rob Bos Yes, I’m the one who made the shovel analogy in the first place. And it works—until it doesn’t.
Because Nvidia isn’t some frontier supplier hawking commodity $9.99 shovels to jittery prospectors. They’re the company providing the heavy machinery, the operating software, and a massive chunk of the infrastructure that keeps the entire mining operation running. Not literally—but in terms of how central their hardware and software stack have become to AI.
And the “prospectors” aren’t lone wildcatters panning for gold. They’re Microsoft, Amazon, Google, Meta, Tesla, Oracle—the hyperscalers and national labs buying GPUs by the truckload. OpenAI and Anthropic matter, sure. But they’re rounding errors compared to the cloud giants. If either vanished tomorrow, Nvidia’s quarterly numbers would barely flinch.
This is why the gold-rush framing breaks down. A gold rush collapses when the metal runs out. But AI isn’t behaving like a one-off mania—it’s starting to look like a platform build-out. Cloud. Mobile. The GPU revolution itself. None of those disappeared. They became permanent layers of the tech stack.
And even if AI spending cooled, Nvidia doesn’t evaporate. They still sell into HPC, robotics, gaming, biotech, autonomous vehicles, defense, simulation—any field lifting math too heavy for a CPU.
So yes, my shovel analogy captured the vibe. But in practice, Nvidia isn’t the guy selling shovels. The reality is, they’re the industrial supplier behind the entire operation—and everyone else is building on top of them.
The analogy works right up until you meet the reality.
