NVIDIA Earnings Put the AI Boom to the Test — Woo Warns of “Catastrophe”

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**David Woo** (1:26)
It will be a catastrophe. Right now, the whole valuation of the AI trade, including Anthropic's supposed $2 trillion target, is based on the assumption of a winner take all outcome. Fear of losing out. Only thing I know about fear is that fear has no logic, economic logic, and fear has no limit. We tell you this, the arting number is total bullshit.
Right now, the whole valuation of the AI trade, including Anthropic's supposed $2 trillion target, is based on the assumption of a winner take all outcome. People are thinking in terms of, oh, wow, we're going to get another Google, or another Apple, whatever. I mean, to even think that...
One thing I am very certain is that there is no way that as good as Anthropic may even be, there is zero chance it's going to be as dominant as Google is in search, for example. Okay. Even Google, now, I would argue search is in trouble, basically, because I think Google search is still the best search, but you know what? Even the best search compared with AI is like, it's got 10% of capability. I would say Google is going to be, in the end, going to be a big loser by the commoditization of AI. But the point here is that that's what it is. If you can protect something that has a natural moat, that's one thing, but I don't see a natural moat here. In fact, what I see is cannibalization, commoditization, and that any attempt trying to basically protect it, will only basically, will be costly for the taxpayers. It would just mean a lot of basically money wasted.

**Maggie Lake** (3:16)
Well, this is really important because despite the fact that you see a window here where you wouldn't short it, you're describing something that's so important to the US equity market and that almost every investor probably has a very large exposure to even if you just hold the S&P 500
What does that look like if investors realize that or if that scenario you just suggested plays out? What does that mean for the broader equity, US equity markets?

**David Woo** (3:47)
I mean, it would be a catastrophe, right? I mean, so right now, the question is, it doesn't have been short. I'm going to go back to shorting. I'm just getting out of the way right now just to see where the chip lands. First of all, because I worry about the hype machine, because the Trump administration has been very good. I turn it on the hype machine whenever they want, and then Trump apparently literally can, you know, he can do whatever he wants, because, I mean, apparently the market just believes in him and whatever, they can't fight against him. But what I'm saying though is that, you know, but it's not just Trump. Look at what happened in this earning season. It was ridiculous. Now, you're telling me, so Microsoft, Microsoft decided suddenly, I mean, you know, by the way, hundreds of billion dollars of CapEx, Microsoft's depreciation, CapEx depreciation this last quarter was zero, was zero because they decided to extend the depreciation lifetime of some expenditure of their, you know, AI data center, basically produce from 15 years to 25 years. Are you kidding me?