Nvidia is among the largest winners of the AI growth. Its newest quarterly outcomes confirmed $57 billion in income and $31.9 billion in revenue, file numbers by any measure.
However as an alternative of celebrating, the inventory swung wildly: up 5% after earnings, then down once more inside 18 hours. Buyers, algorithms, and market watchers at the moment are asking a vital query: Is Nvidia’s AI progress as strong because it seems to be on paper?
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NVIDIA’s Financing Mannequin Attracts Scrutiny as Large-Identify Buyers Wager Towards It
The primary warning signal is cash that has not really been paid. Nvidia has $33.4 billion in unpaid buyer payments, practically double what it had a yr in the past. On common, clients are taking 53 days to pay, up from 46 days.
In the meantime, the corporate is sitting on $19.8 billion of unsold chips, but administration says demand is thru the roof.
“Both cannot be true…Either customers aren’t buying or they’re buying without cash. The cash flow tells the real story,” mentioned Shanaka Perera in a publish.
One other crimson flag is the hole between income and precise money. Nvidia reported $19.3 billion in revenue, however it generated solely $14.5 billion in money. Meaning $4.8 billion of its “profit” has not really appeared within the financial institution.
For comparability, different chipmakers like TSMC and AMD flip nearly all of their income into money. Nvidia’s decrease charge raises questions on how a lot of its progress is actual.
“Healthy chip companies like TSMC and AMD convert over 95% of profits to cash. Nvidia converts 75%. That’s distress level,” Perera added.
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Issues get much more difficult whenever you have a look at how AI corporations purchase from one another. Nvidia sells chips to companies like xAI, Microsoft, OpenAI, and Oracle. Many of those offers are funded by loans or credit from the identical corporations, which means the identical cash is counted a number of occasions as income.
Michael Burry Sounds the Alarm on Nvidia’s Income and Demand
Michael Burry, the investor well-known for predicting the 2008 crash, refers to this “suspicious revenue recognition,” warning that the precise demand from end-users could also be very small.
Each firm listed beneath has suspicious income recognition. The precise chart with ALL the give-and-take offers could be unreadable. The longer term will regard this an image of fraud, not a flywheel. True finish demand is ridiculously small. Nearly all clients are funded by their… pic.twitter.com/0XyGQ8FjuE
— Cassandra Unchained (@michaeljburry) November 19, 2025
Burry additionally identified that Nvidia’s inventory buybacks could also be hiding one other threat. Since 2018, the corporate has spent $112.5 billion on buybacks, whereas nonetheless issuing new shares.
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That successfully dilutes current shareholders. He additionally questioned whether or not older GPUs, which use way more electrical energy than newer fashions, are actually as useful as the corporate claims.
“Just because something is being used doesn’t mean it’s profitable,” he mentioned.
Some huge traders appear to agree. Peter Thiel reportedly bought all of his Nvidia shares, and SoftBank bought $5.8 billion value on November 11. Michael Burry purchased put choices betting Nvidia would crash to $140 by March 2026.
Peter Thiel reportedly bought his complete place of 537,742 shares in Nivdia.
Why? It’s a bubble, all of them comprehend it & are cashing out.
– Nvidia ALONE = 15% of US GDP.
-OpenAi needs a govt bailout.
– US Progress is .01% whenever you take away AI sector. pic.twitter.com/mk3Nc6yBpk
— Maine (@TheMaineWonk) November 17, 2025
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On the similar time, AI-linked hypothesis seems to be affecting crypto markets. Bitcoin has dropped practically 30% since October, partly as a result of AI startups maintain $26.8 billion in Bitcoin as collateral, which may very well be bought if Nvidia’s inventory falls additional.
Nvidia, $NVDA, CEO Jensen Huang instructed employees ‘the entire world would’ve fallen aside’ if Nvidia delivered a foul quarter, per BI
— unusual_whales (@unusual_whales) November 21, 2025
Not everyone seems to be apprehensive. Supporters argue that Nvidia has $23.8 billion in money movement, big orders from corporations like Microsoft and Meta, and that among the inter-company offers are normal within the tech trade.
Nonetheless, a latest survey by Financial institution of America exhibits that 45% of fund managers view AI as a serious market bubble threat, a priority echoed by international regulators, together with the IMF and Financial institution of England.
The following few months could also be vital. Analysts are watching Nvidia’s fourth-quarter leads to February 2026, doable credit score downgrades in March, and any restatements in April.
How the corporate performs might resolve whether or not the AI growth continues or if the latest market panic alerts the beginning of a broader slowdown. Both approach, the Nvidia story is now the check case for the AI-driven tech period.
