It's even worse to read anything into it, because of expectations:

The stock market could have priced in the model being 10x better, but in the end it turned out to be only 8x better, and we'd see a drop.

Similarly, in a counterfactual, if the stock market had expected the new model to be a regression to 0.5x, but we only saw a 0.9x regression, the stock might go up, despite the model being worse than the predecessor.

Especially since Nvidia just released quarterly earnings this week. That's the real reason for the big movements.

Yea but consulting the stock market for valuation seems like consulting a council of local morons what they think of someone. Any signal provoking such a drop would itself be many times more valuable, if it is indeed meaningful in the first place.

Why not? The P/E ratio went from 55 to 47, my back of the napkin approximation interprets that as the market expecting ≈ 4%/year reduction in forecasted earnings. Which actually seems conservative if the market is digesting the news that LLMs are hitting scaling walls.

I just don't think this is true though. I actually got long more NVDA on the pullback.

Sonnet 3.7 is unbelievable.

It would hardly be shocking though if OpenAI hits a wall. I couldn't get an invite to Friendster, I loved Myspace, I loved Altavista. It is really hard to take the early lead in a marathon and just blow every out of the water the whole race without running out of gas.