The Real Eisman Playbook NVIDIA’S Explosive Growth Can’t Hide the Market’s AI Panic | The Weekly Wrap
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Nov 21, 2025 NVIDIA's extraordinary growth sparks a market reversal, raising questions about the future of AI investments. Historical parallels are drawn between AI spending and the 19th-century railroad boom, highlighting inherent risks. Big-box retailers like Home Depot and Target face tough times due to weak housing markets and competition from giants like Amazon. Meanwhile, Walmart thrives by capturing market share amid consumer stress. In the mailbag, topics include the fairness of hedge fund fees, stock valuation, and insights on investing in India.
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NVIDIA’s Unusually Fast Growth
- NVIDIA grew revenue 62% year-over-year and accelerated growth sequentially despite being the largest company by market cap.
- The AI hardware boom is driving exceptional demand even without sales to China, highlighting massive underlying adoption.
Euphoria And Rapid Reversal
- NVIDIA's after-hours beat ignited a broad rally that reversed the next day, showing how sentiment swings can overwhelm fundamentals.
- A single blockbuster report can spark both euphoric buying and rapid profit-taking across correlated AI names.
Railroad Analogy For AI CapEx
- The market worries AI may mirror the railroad-era CapEx: transformative yet riddled with intense competition and failed players.
- AI tools are booming, but the profitability and end-product transformation remain unclear until use-cases prove out.