Nvidia still not recovering from DeepSeek shock. Broadcom bullish after Meta announcement. Ballmer richer than Ortega.
The rapid rise of Chinese AI startup DeepSeek made Nvidia suffer a difficult week as the chipmaker’s stock experienced significant losses. The fall started Fri, 24 Jan 2025. To have a reference of how dramatic this fall was, the stock price for Nvidia on Thu, 23 Jan 2025 was $147.22. Fri, 31 Jan 2025 the new price was $120.07. Nvidia’s stock went from an almost all-time high to a much lower price, in just a week. The losses were massive! Nvidia’s sales to China account for more than 15%. If the Trump administration executes restrictions on sales of advanced U.S. chips to China, Nvidia could suffer from reduced demand for its GPUs, further affecting the company’s bottom line.
In the context of Nvidia having another bad day in the stock market, it is fair to ask, why did not Broadcom suffer a similar poor stock performance on Friday? Both companies have emerged as some of the richest in the world as a result of the AI revolution. The DeepSeek affected both similarly on 27 Jan 2025. But after that, only Nvidia suffered a terrible Friday, while Broadcom experienced an outstanding Friday of growth. One explanation could be that Broadcom benefited from Meta CEO Mark Zuckerberg's announcement that Meta would spend hundreds of billions on artificial intelligence. More specifically, Meta CFO Susan Li said: "We're pursuing cost efficiencies by deploying our custom MTIA (Meta Training and Inference Accelerator) silicon in areas where we can achieve a lower cost of compute by optimizing the chip to our unique workloads." Considering that Meta built its MTIA chips with Broadcom, it could become easy to understand why Broadcom remained optimistic on Friday. Since 17 Jan 2025, Meta’s stock price has been growing in an unstoppable way.
Amancio Ortega lost its position as 9th richest person in the world and was downgraded to 10th, as Steve Ballmer took the position back that he had lost on 31 Jan 2025. Nothing special happened on the Baller’s side, but it was Ortega who lost money with an amount relatively small but sufficient to make him lose the race, for now. Both Ortega and Ballmer are essentially at the same level in net worth. It is not surprising if one day one is richer, the next day the situation is reversed, and the race continues until one of them consolidates his position. For now, the winner is again, Ballmer.
Tariffs are supposed to protect the local manufacturer. Do we have a local manufacturer to protect? If not this is just dumb. ANY tariff that does not protect local manufacturer is economically inappropriate. At the end of the day, the consumer pays the tariff.
How does current administration view tariffs as conducive to reduction of consumer prices is beyond me. Because it will only lead to price increases. It always has
The tariffs may have a variety of purposes in mind. For example, compelling nations to meet specific demands. Generating short-term revenue might be another objective. Halting illegal immigration could be another example. In other words, tariffs may not necessarily have exclusively economic purposes in mind, such as protecting local manufacturers. The purposes could be geopolitical too. That is not to say that economic purposes should not be primary. But the reality may be different than the theoretical purposes and the conversation easily moves to the political rather than the economical spectrum.
Jaime Montoya as I said before, tariffs are an economic measure and their inappropriate, political use, as a threat, only hurts the people of the country that uses them.
Tariffs are not going to stop immigration.
Tariffs are a source of revenue for the government. Nonetheless, it makes sense to think that the fundamental purpose of tariffs should be to safeguard domestic industry. From that perspective, it could be said that it is inappropriate to use tariffs mainly for political or geopolitical purposes.