Jeffrey Emanuel wrote the essay The Short Case for Nvidia Stock, which says Emanuel "spent ~10 years working as a generalist investment analyst at various long/short hedge funds" while also being "something of a math and computer nerd." The items below are things Emanuel wrote in that essay or said on the Bankless podcast. — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
Part 1: The Economics of the AI Bubble and Hardware Moats
- On Hardware Moats: In the essay The Short Case for Nvidia Stock, Emanuel wrote "the very programming framework that coders use to write low-level code that is optimized for GPUs, CUDA, is totally proprietary to Nvidia, and it has become a de facto standard". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On Being Contrarian When Consensus Is Priced In: In the essay "The Short Case for Nvidia Stock," Emanuel wrote: "a confluence of recent developments has caused me to flip a bit to my usual instinct, which is to be a bit more contrarian in outlook and to question the consensus when it seems to be more than priced in". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On Overprovisioning: In the essay The Short Case for Nvidia Stock, Emanuel wrote of DeepSeek's efficiency breakthrough: "This suggests the entire industry has been massively over-provisioning compute resources". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On who decides capex: On the Bankless podcast, Emanuel said that "the big decisions about CAPEX come down to a couple people like, you know, Mark Zuckerberg". — Bankless: DeepSeek R1 & The Short Case For Nvidia Stock | Jeffrey Emanuel (Jan 2025), transcript.
- On the Middle of the Venn Diagram: In the essay "The Short Case for Nvidia Stock," of the mix of AI and investing experience, Emanuel wrote: "I doubt there are very many who are in the middle of the Venn diagram to the extent I can claim to be". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On interconnect: In the essay The Short Case for Nvidia Stock, Emanuel wrote "Besides software superiority, the other major thing that Nvidia has going for it is what is known as interconnect". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On the Limits of Mass-Producing Knowledge: In the essay "The Short Case for Nvidia Stock," Emanuel wrote that "it's a lot harder to mass produce useful new human knowledge which is correct and incremental to what is already out there". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On Profit Margins: In the essay The Short Case for Nvidia Stock, Emanuel wrote in setting out the bull case: "Nvidia is able to earn insanely high 90%+ gross margins on the most high-end, datacenter oriented products". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On the First Time With O1: In the essay "The Short Case for Nvidia Stock," Emanuel wrote: "The first time I tried the O1 model from OpenAI was like a revelation: I was amazed how often the code would be perfect the very first time". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On Hyperscaler Incentives: In the essay The Short Case for Nvidia Stock, Emanuel wrote "there is some serious competition coming from some of Nvidia's biggest customers themselves who have been making custom silicon that specifically targets AI training and inference workloads". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On DeepSeek Telling the Truth: In the essay "The Short Case for Nvidia Stock," of DeepSeek's reported efficiency, Emanuel wrote: "I think it's more likely that they are telling the truth, and that they have simply been able to achieve these incredible results by being extremely clever and creative in their approach to training and inference". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On Believing Early or Late: In the essay "The Short Case for Nvidia Stock," Emanuel wrote: "The saying "what the wise man believes in the beginning, the fool believes in the end" became famous for a good reason.". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025)
- On Markets Routing Around Bottlenecks: In the essay "The Short Case for Nvidia Stock," Emanuel wrote that "history shows that markets eventually find a way around artificial bottlenecks that generate super-normal profits". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025)
- On Thinking in CUDA: In the essay "The Short Case for Nvidia Stock," Emanuel wrote of the programmers who are hired for GPU expertise that "chances are that they are going to "think" and work in CUDA". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025)
- On Customers Building Custom Silicon: In the essay "The Short Case for Nvidia Stock," Emanuel wrote that "every major NVIDIA customer (Google, Amazon, Microsoft, Meta, Apple) is developing custom silicon that could chip away at high-margin data center revenue". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025)
- On Chip Designers Being Lured Away: In the essay "The Short Case for Nvidia Stock," Emanuel wrote of Nvidia’s senior chip designers that "surely some of the best of them could be lured away by these other tech behemoths for enough cash and stock". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025)
Part 2: The Shift to Efficiency and the DeepSeek Catalyst
- On DeepSeek R1: In the essay The Short Case for Nvidia Stock, Emanuel wrote that DeepSeek trained its models, by some measurements, "over ~45x more efficiently than other leading-edge models". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On the viral essay: On the Bankless podcast, Emanuel said "I may have inadvertently contributed to $2 trillion getting wiped off global equity markets". — Bankless: DeepSeek R1 & The Short Case For Nvidia Stock | Jeffrey Emanuel (Jan 2025), transcript.
- On LLMs and Programming: On Bankless, Emanuel said: "I use LLMs all the time for programming, and they're just stunningly good at that now". — Bankless: DeepSeek R1 & The Short Case For Nvidia Stock | Jeffrey Emanuel (Jan 2025), transcript.
- On Data Requirements: In the essay The Short Case for Nvidia Stock, Emanuel wrote of R1: "DeepSeek essentially cracked one of the holy grails of AI: getting models to reason step-by-step without relying on massive supervised datasets". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025).
- On Being Bullish on AI: On Bankless, of the Nvidia argument, Emanuel said: "I'm about as bullish, like 99th percentile on AI as anyone, you will ever meet". — Bankless: DeepSeek R1 & The Short Case For Nvidia Stock | Jeffrey Emanuel (Jan 2025), transcript.
- On Inference Compute and Chain of Thought: In the essay "The Short Case for Nvidia Stock," Emanuel wrote of reasoning models: "now, the more tokens you use for this internal chain of thought process, the better the quality of the final output you can provide the user". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025)
- On Gamed Benchmarks: In the essay "The Short Case for Nvidia Stock," Emanuel wrote: "There is a lot of BS that goes on with AI benchmarks, which are routinely gamed so that models appear to perform great on the benchmarks but then suck in real world tests.". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025)
- On Open Technical Reports: In the essay "The Short Case for Nvidia Stock," Emanuel wrote of DeepSeek: "They have released extremely detailed technical reports explaining how they work, as well as the code that anyone can look at and try to copy.". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025)
- On Incoherent Chain of Thought: In the essay "The Short Case for Nvidia Stock," Emanuel wrote: "Previous attempts at chain-of-thought reasoning often resulted in models mixing languages or producing incoherent outputs.". — Jeffrey Emanuel: The Short Case for Nvidia Stock (Jan 25, 2025)