Survive and Advance

We survived the deep learning despair and hyperscale horror show today, what's next?

While today wasn’t close to the widespread chaos that happened on Black Monday, Deepseek’s algorithm armageddon was priced into the market much more aggressively than I thought possible, as Nvidia was down almost 20% and finished near the lows of the day. That was just the tip of the iceberg, with CEG down 21%, VST down almost 30%, CRDO down 34%, VRT down 30%, NBIS down almost 40%, the list of cliff dives lower goes on and on and on. Nature gas names? Caught fire. Nuclear anything? Melted down. Things that are used to build data centers? Got torn down.

Ugly day in everything related to picks and shovels bets in AI.

Meanwhile a lot of stuff did work, as today’s heat map wasn’t even that bad if you didn’t know the market went down 1.7% and 3.3% on the S&P and ‘daq.

Though I do wonder what the index would look like if Apple shorts didn’t need to cover so aggressively that it pushed the name up 3%.

This is one of the reasons diversification is needed. If you owned only AI stuff you were having a real bad time today. Outperforming on days like today by being green, or even flat should lead to a massive YTD spread by the end of the year. 2% takes a while to make up, especially when the larger pieces of the index are the weakest. But enough about did happen, what’s important is what will happen, what we should buy to make money, and what risks are still present and how we should prepare for them.