‘Big Short’ Michael Burry fires shots at major AI stock

Nvidia (NVDA) conscionable dished retired different monster quarter, the benignant that typically has Mr. Market moving retired of superlatives.

Revenue jumped, guidance came successful hot, arsenic the institution but declared that the AI build-out is accelerating astatine a breakneck pace.

However, with investors celebrating the evident breather successful the AI storm, a precise acquainted dependable has stepped backmost into the conversation.

Scion Asset Management laminitis Michael Burry, the archetypal “Big Short,” is backmost astatine it, questioning whether Nvidia’s explosive maturation reflects sustainable demand.

In a bid of posts connected X (formerly Twitter), Business Insider reports that Burry fleshed retired his arguments connected the stretched-out depreciation schedules and inflated AI spending estimates. Burry emphasized that “dealer-funded” customers are masking existent risks.

Nvidia CEO Jensen Huang argues the roar is acold from over, portion Burry feels we’ve been present before.

Nvidia’s 4th dazzled Wall Street, but not everyone’s buying into the AI-powered story.

Right connected schedule, the market’s astir celebrated contrarians stepped successful to question the spot of the communicative down those header numbers.

Nvidia didn’t conscionable bushed expectations; it fundamentally steamrolled them.

The company’s latest 4th posted the kinds of numbers that compel Wall Street to calibrate its models successful existent clip effectively. Also, earlier investors could process it all, Nvidia stacked connected guidance, which importantly raised the bar.

Related: Veteran expert delivers astonishment post-Q3 verdict connected Nvidia

• Revenue crushed expectations:Q3 gross deed $57 billion, up 62% twelvemonth implicit twelvemonth and 22% 4th implicit quarter, clearing Wall Street’s $54.9 cardinal bar.

• Profits rode the AI surge: EPS came successful astatine $1.30 (GAAP and non-GAAP) versus $1.26 estimate, spearheaded by 73%+ gross margins.

• Data halfway dominated everything: Revenue successful the conception soared to $51.2 billion, coming successful astatine astir 90% of Nvidia’s total, led by “off-the-charts” request for Blackwell systems.

• Guidance kept the enactment going: Nvidia projected $65 billion successful Q4 revenue, acold supra the $61-$62 billion consensus, signaling the AI build-out isn’t cooling.

In respective posts connected X, Burry’s skepticism of Nvidia’s record-setting Q3 showing came done with diagnostic bluntness.

He argued that Nvidia’s biggest cheerleaders are wholly ignorant of the accounting and economical realities that are improbable to enactment hidden forever.

He pushed backmost against the AI torchbearer’s insistence that extended GPU usefulness justifies longer depreciation schedules, saying that mixing up utilization with worth instauration ends up inflating earnings.