NVDA faces significant headwinds including customer concentration, cost pressures, and potential accounting irregularities that cast doubt on its ability to sustain high growth targets.

Nvidia had a flat year, fiscal 23 course,

So, we have to start with Nvidia. I feel like they're they're proving everything that you've said to be not correct. But they just said for the first time ever we're actually going to give a full year's worth of guidance.

Um they were going quarter by quarter. They actually gave guidance through 2028, fiscal 2028, which is not calendar 28, but um it's February February 2027 off in the woods. So they're saying like we're going to grow revenue by about 70%.

We've got the sales locked in for GPUs and uh Vera CPUs and etc etc.

We know that like 90% of their business is selling to data centers. A huge chunk of that is selling to the same four or five customers, the hyperscalers. They are talking about broadening that out.

They're talking more about now uh automation, robotics, but the data center business is the business.

I just want to be clear as well. Nvidia made a bunch of money. Like, that's I'm not questioning that. That'd be crazy. However, 16% of their latest quarter revenue was one customer. 44% of their first half of fiscal 2027 was three customers. Five customers make up 70% of their accounts.

110 billion was Nvidia 30, Soft Bank 30 which put them into fire financial direates and they're still there and uh Amazon 50 billion. That's not going to happen multiple times or if it if Nvidia invests again, they said they wouldn't.

They literally said the words, "If they invest again, it's bad times ahead."

You can't because even like oh it's going to happen in 2028. Nvidia will get to to 600 something 674 billion I guess it would be based on consensus for fiscal 28.

So Nvidia will get there because right now Nvidia makes lots of money. It's not a problem. Now to get there Nvidia is going to have to basically take three to five customers. They're going to have to find way more debt.

Like way more because the price of debt is increasing.

But also, Nvidia just bumped up prices 17%. The cost of memory skyrocketing. And on top of that, you have a shortage of talent, shortage of electrical grade steel. There are all sorts of things stacked against Nvidia here.

They could pull it off, but I don't know how they're going. The the actual money that needs to get raised is astronomical.

So what we're looking at for people that are listening is the trailing 12 month net income for Nvidia just screamed past Apple. But how much of that is equity gains though? What does that mean?

as in their operating anthropic, Anthropic, Open AAI, uh they've invested in like Coreweave, Nebius, Iron, they have a bunch of equity investments that help bumping that up.

So, back on Nvidia just because this is like well I call Jensen Wang the in the uh the chairman of the AI Federal Reserve basically basically he's the person that comes out and makes everybody feel better pretty much every quarter we get the hyperscaler earnings and then there's a 3-week lag and then Nvidia comes out at the end of the earning season and ratifies everything that we

Okay so just like on its face 96 billion in revenue. We know that the cost of a data center is approximately 50% on chips. >> Yeah. More now thanks to memory, but yeah. Okay. That'sund That's 106% revenue growth at 75% gross margins.

Um Nvidia right now, I mean, this is real money. So, your issue is not whether or not the spending is real. Your issue is the source of where the capital is coming from to buy from Nvidia is really what's in question.

Nvidia's GPUs are so expensive and they just got more expensive and the cost of RAM and construction are going up.

That's actually really good to know because Nvidia is considering investing billions at a $30 billion valuation. Why? Because Perplexity is one of the few companies that actually spends any real money on GPU compute.

Perplexity's death would hundreds of millions, but still in this industry that's a lot when no one else is spending much more than millions or tens of millions. So Nvidia is keeping them alive because if they fail, well, everyone knows.

Nvidia's 70% uh profit margins, stocks trading 18 times forward earnings.

GE Capital is the other comparison I'd make with Nvidia. Nvidia is acting a lot like Welch. They're doing some vendor financing. vendor financing, but also with the uh was it GCAS, the airline side over there.

Yeah, they kept airlines alive constantly. They were a massive leaser. They were America's largest equipment leaser at one point to their customers. There were airlines that could only survive as long as GE could lease them stuff.

per Nvidia's own earnings, we're at a point where there are like three to five companies that can afford this at any kind of scale and Nvidia has to make so much more money. Like so everyone is in this situation.

Open AI and Anthropic have to grow like crazy. Nvidia has to grow like crazy. I think Nvidia may have said the 70% thing because they're desperate. And I know that sounds crazy because they're doing mad numbers, but remember they've been down.

People have been a little bit worried about Nvidia. They needed something exciting. Also, they got some concerning in that in that 10Q. There's some really weird stuff. That statement they made about investment grade partners that can pay between 3 months and one year. It's really weird.

So, you don't like seeing them become investors and in some cases creditors to of their own customers? It seems like a it's the classic sign of illusory demand or artificial demand, I should say.

Even though Jensen Wong nobody can even define it. Exactly. Jensen Wong said it was here and it's just like shut up Jensen. Come on mate. But the thing is the hypers scale growth story is so difficult for them to meet.

It's so crazy. Like even what Jensen Jensen if anyone can pull it off it's Jensen. But to do $670, $690 billion next year probably from the same customers means that Amazon, Google, maybe Microsoft, definitely Meta are going to have to take out a bunch of debt.

last year in September there were like three or four OpenAI announcements that manipulated SKH High, Samsung, uh AMD and Nvidia. Four announcements where nothing happened and the stocks popped.

And Jensen as well has done so well on this. But here's my real Nvidia question, and I've been waiting to bring this up. It feels like the right time. How and when does Nvidia realize revenue? That is a very interesting question.

How and when does Nvidia realize revenue? That is a very interesting question. When you actually look at their earnings, those accounts receivable have grown. Nobody special found this. 55% sequentially.

Like what's going on there? Why are your accounts receivable? Why are your daily sales outstanding growing? Like why is that? We like to think of them as backlog. But that's the thing though.

Why is this extending as you're making more money? Is that because you're reaching the edge of when you can get money quickly or at all? When does that how much more affordance are you going to have to make your customers to grow to $690 billion?

Also, technically on an accounting level, you can ship something and you can count the revenue and no money can pass. I don't know. Maybe you're feeling generous with corewave.

You really have to disclose that. You might eventually, but Collet Crest might just not send it

When you actually look at their earnings, those accounts receivable have grown. Nobody special found this. 55% sequentially. Like what's going on there? Why are your accounts receivable?

Why are your daily sales outstanding growing? Like why is that?

But that's the thing though. Why is this extending as you're making more money? Is that because you're reaching the edge of when you can get money quickly or at all? When does that how much more affordance are you going to have to make your customers to grow to $690 billion?

Also, technically on an accounting level, you can ship something and you can count the revenue and no money can pass. I don't know. Maybe you're feeling generous with corewave.

You really have to disclose that. You might eventually, but Collet Crest might just not send it out as quickly. They're going to push because we don't have an SEC right now. They're going to push the absolute limits of accounting shenanigans here.

It's It's going to It's already looking really weird.

Inventory is growing as well. Nvidia has $30 billion of cloud compute agreements, as in to rent back their GPUs. They have $25 billion of data center lease agreements. Why are they you sell to the data center Jensen?

Why are you also renting the you just are you just building a data center to feed yourself money and this is the ultimate point of the economy? This is eventually they wanted to create something where the only thing was just handing yourself money but the money increased by draining debt