Overview
- Nvidia privately circulated a memo to analysts disputing Michael Burry’s claims on dilution, revenue recognition and circular AI deals, while touting a raised revenue outlook of about $65 billion for the January quarter after a $57 billion quarter.
- Burry escalated his critique in Substack posts likening Nvidia to Cisco in the dot‑com era and, after reports of Nvidia’s memo, said on X that he stands by his analysis following earlier billion‑dollar put positions on Nvidia and Palantir.
- JPMorgan strategist Michael Cembalest projected a likely 10%–15% market correction rather than a 40% crash, arguing the AI capex boom is largely funded by internal cash flows, which reduces systemic debt risk.
- Supporters of a durable cycle point to measurable industrial demand, citing record backlogs at Quanta Services, Eaton and Vertiv, while some investors frame recent AI stock declines as a healthy recalibration rather than a bursting bubble.
- Risks persist around market concentration and hardware economics, with Ruchir Sharma estimating a large share of growth and market gains tied to AI and analysts warning that rapid GPU cycles and the longevity of older chips could pressure Nvidia’s future pricing power.