depreciation

Recent market turbulence, driven by AI stock valuations, highlights conflicting views on capital expenditure depreciation and asset lifecycles. Some rely on traditional models predicting rapid asset devaluation, while Nvidia’s Huang and AMD’s Su argue for longer usable lifespans due to software improvements and demonstrable returns on investment. The debate centers on whether conventional valuation models adequately capture AI’s disruptive potential. The long-term outlook for AI remains strong, particularly for companies with visionary leadership and robust fundamentals. A balanced approach considering both financial metrics and technological innovation is crucial.

With tech giants investing heavily in AI data centers, depreciation of AI GPUs is a crucial accounting concern. Unlike traditional servers, the lifespan of these rapidly evolving components is uncertain, impacting profitability and investment decisions. While some, like CoreWeave, see long-term value, short seller Michael Burry suggests companies may be inflating useful life for earnings. Factors like new chip releases and wear-and-tear could accelerate depreciation. Companies are adopting varied strategies, and auditors are scrutinizing depreciation claims closely.

The used EV market is booming, marked by significant depreciation, with Guazi Used Cars’ August 2025 report providing price benchmarks. EVs aged three years or less show discounts of up to 70%, with popular models available across various price brackets (under $10k to over $30k). Guazi leverages direct sourcing and offers a 200-point inspection, insurance history, secure payment, and a 100-day battery degradation guarantee, addressing transparency concerns in the used car industry and assuring buyers.

Early EV adopters, particularly those with pre-2018 models, face challenges. Battery degradation leads to reduced range and range anxiety, especially in cold climates. High depreciation and the $6,000-$9,000 cost of battery replacement add further burden. While some praise EVs, the impending need for battery replacement is a primary concern, potentially costing a significant portion of the car’s original value due to limited repair options.