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.

> 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?

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.

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.

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.

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?

Technical analysis is amazing, it is most refined form of pseudoscience.

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?

Nvidia PE ratio: 44

I do hope they crash so that I can buy as much as possible at a discount.

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.

This is more of a derivative pricing article and has nothing to do with nvidia really

was expecting some actual reasons presented as to why this would happen. instead got some math.

checks calendar Ah, NVIDIA earnings call is close - prepare for the inevitable doomer articles.

People don't actually believe this type of analysis... do they?

The real question is what else will this cause to fall when it does happen.

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

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.

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.

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.

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....

Who said that monads don't have any application?