Dougie Kass
Hedge Fund Manager, President of Seabreeze Partners
Nvidia's $150 billion buyback is immaterial and cannot provide a floor under the stock. Against a $5 trillion market cap it is about 3% over roughly two years, under 2% a year, whereas Apple's $100 billion buyback came when its market cap was about $900 billion. Stock-based compensation and the size of insider sales over the last year offset it further. Nvidia remains a remarkable company. x.com x.com
Nvidia's projected free cash flow is dwarfed by its massive external financial obligations within the AI "circle of love" of circular financing. Its new forecast of next year's revenue, something it never normally gives, is a negative rather than a positive, contrary to a CNBC technical analyst calling the news great for hyperscalers; the Mag 7's reaction to the forecast supports that read. x.com x.com
Walter Bloomberg
Financial News Headlines Aggregator, Not Affiliated with Bloomberg
NVIDIA IS IN TALKS TO PROVIDE NSCALE WITH BILLIONS IN CREDIT GUARANTEES FOR DEBT TO DEVELOP A 460-MEGAWATT DATA CENTER - THE INFORMATION x.com
AlvaSupportsThe Information reports that Nvidia is in talks to provide billions in credit guarantees for an Nscale data center, adding potential financial commitments that could compete with the $150 billion buyback and limit its support for the stock.
Gary Gensler
Former SEC Chair, Professor of the Practice at MIT Sloan
I worry about all these guarantees that Broadcom, NVIDIA, AMD have written back into these data centers. And it's off balance sheet. podtrac.com
AlvaSupportsGary Gensler's concern about Nvidia's off-balance-sheet guarantees adds to the financial commitments that could compete with the $150 billion repurchase and limit its ability to support the stock.
Dow Jones
Real-Time Financial News Wire
It's the latest example of how Nvidia has become a banker to the AI boom, often through arrangements in which it invests in the companies that buy its chips or uses its balance sheet to guarantee financing for them. tradingview.com
AlvaSupportsNvidia's $3 billion investment in Meta and broader financing commitments show capital being deployed to support customers and chip demand rather than solely to repurchase Nvidia shares, strengthening the case that competing commitments can limit the buyback's impact.
Hedgie
Financial Markets Newsletter and Commentary
Nvidia lined up six major lenders for a $500 billion program and will backstop up to 25% of each deal. x.com
AlvaSupportsThe reported Nvidia backstop on chip-backed loans could create obligations comparable to its $150 billion buyback, putting its capacity to execute the program at risk if borrowers default.
Reuters
Global News Agency
"Semiconductors and the Nasdaq have been elevated to a huge degree by investors' rush to participate in the AI build-out. Investors are now reassessing the pace of AI spending and the returns that spending can generate," said Steve Sosnick, chief market analyst at Interactive Brokers. tradingview.com
AlvaSupportsThe reported reassessment of AI spending and its uncertain returns supports the thesis's view that Nvidia's buyback cannot offset investor concerns about the scale and value of AI investment.
Jim Cramer
Host of CNBC’s Mad Money, Leader of the CNBC Investing Club
If the yield on the 30-year Treasury goes north of 6%, it's currently at 5.47, then look out. If we get another rate hike soon, then I believe Corw will have a difficult time raising money, and the dominoes will indeed fall. ... If rates come down, I bet Kore is fine. youtube.com
AlvaMixedCramer sees a rate-driven financing risk for CoreWeave that could spread through the AI data-center buildout, strengthening the thesis's credit-risk concern, while expecting CoreWeave to be fine if rates fall.Jim Cramer
Host of CNBC’s Mad Money, Leader of the CNBC Investing Club
Before the break, mentioned that Anthropic's pre roadshow event last week contributed to the sell off because quite a few people were disappointed by the numbers. ... we need to see that someone is making money or will soon be making money from all this data center investment. ... Anthropic and OpenAI represent a huge amount of their business for these platforms. ... we need to see at the very end of the spending chain that this could be a sustainably profitable business that's worth investing in. dts.podtrac.com
AlvaSupportsDisappointment with Anthropic's pre-roadshow numbers reinforces concern about growth at a major AI customer; Cramer says sustainable profitability at the end of the spending chain is important to the data-center investment case.Jim Cramer
Host of CNBC’s Mad Money, Leader of the CNBC Investing Club
Right now, some of their publicly traded debt is going for 15%, and that's just too expensive for them to raise more capital. The return on the investment is simply not big enough for CoreWeave to make money if they're borrowing at 15% to buy NVIDIA GPUs. ... But I actually think that the chips they buy will more than hold their value. ... But all this may be a giant sideshow because I think the real issue here is interest rates. dts.podtrac.com
AlvaMixedCoreWeave's costly debt could constrain a Nvidia customer's GPU purchases, strengthening concern about debt-funded AI spending; Cramer sees rising interest rates as the main risk and expects the GPUs to retain their value.Walter Bloomberg
Financial News Headlines Aggregator, Not Affiliated with Bloomberg
OpenAI reportedly claims $50 billion in annualized revenue, targeting $70 billion by year-end. x.com
AlvaChallengesThe reported $50 billion revenue run rate pushes against the concern that OpenAI's revenue growth is faltering, while the $70 billion year-end figure is a target.
Dan Ives
Technology Analyst & Partner at Yorkville Ives
Oracle is a good example of trying to be a hyperscaler, but there's pain with that, right? When you take on the debt and they've had a cut cost. ... even if you haircut some of the data centers that don't ultimately get billed out, I still think streets underestimate numbers massively over the next one, two years. podtrac.com
AlvaMixedOracle's debt and cost-cutting support concern about the strain of AI infrastructure spending, while Ives's forecast that estimates substantially understate the next one to two years pushes against the concern that AI spending will weaken.
Mandeep Singh
Global Head of Technology Research at Bloomberg Intelligence, Host of Tech Disruptors
So we know the Frontier Labs have grown their revenue fivefold from the start of the year to where we are now. But even with Anthropic, they had stellar growth for the first nine months. Well, now we are starting to see maybe that monthly ARR growth is slowing down. ... Is it because of open rate models or token pricing coming down? So it impacts the ROI and what these companies have to show for all the capex that they are doing. podtrac.com
AlvaSupportsPossible slowing in Anthropic's monthly ARR growth, despite strong growth earlier in the year, strengthens the concern that open models or falling token prices could pressure returns on AI capital spending.Mandeep Singh
Global Head of Technology Research at Bloomberg Intelligence, Host of Tech Disruptors
The cost of capital has gone up. Look at where we were at the start of the year and where we are now with treasury yields. And so everything has gone up in terms of, you know, what you have to pay to get any debt. podtrac.com
AlvaSupportsHigher Treasury yields raise borrowing costs for AI companies, increasing the returns their debt-financed investment must earn to justify continued spending.Mandeep Singh
Global Head of Technology Research at Bloomberg Intelligence, Host of Tech Disruptors
So they are benefiting more from the infrastructure demand. So they are running the workloads that are needed for OpenAI and Anthropic. So even though Anthropic is facing pressure from token pricing going down, they still need to run their workloads on Amazon and Google infrastructure and they're not cutting their prices. ... But then I think the lab side seems to be incrementally slowing down because of open source pressure. podtrac.com
AlvaMixedContinued workload demand supports AI infrastructure spending even as token-price and open-source pressure on labs reinforces concern about their ability to fund it.
Aravind Srinivas
Co-Founder & CEO of Perplexity AI
We continually post-train open-weight models and serve them on our own products, and so we're the model-neutral layer for AI. We are able to. Charge a markup on all the tokens we serve over the inference cost because we deliver real value to the user. ... Tokens are going to grow like multifold, but the spend per token is not going to grow the same level. ... So you get margins on both sides, and that's the way to actually become profitable. podtrac.com
AlvaChallengesPerplexity's claimed markup over inference costs and expected efficiency gains offer a potential path to profitability despite falling spend per token and open-weight competition.
SemiAnalysis
Independent Semiconductor and AI Research Firm
Unfortunately for NVIDIA, its first GB300 FP4 counter-submission is still 1.64x worse in performance per dollar than TPUv7 for external customers across most of the end-to-end performance curve. ... We expect more counter-submissions from NVIDIA as they continue trying to narrow the difference. x.com
AlvaSupportsTPUv7's reported performance-per-dollar advantage for external customers strengthens concern that competition could pressure Nvidia's growth and make its current earnings a less reliable basis for calling the shares cheap.
Dylan Patel
Founder & Chief Analyst of SemiAnalysis, AI Infrastructure Research
Demand and ARR is what to worry about, not supply. x.com
AlvaSupportsThis reinforces the thesis’s concern that AI demand and customer economics may not support Nvidia’s earnings and growth expectations; Patel identifies demand and ARR as the key risk rather than chip supply.
Ed Ludlow
Host of Bloomberg Tech, Correspondent at Bloomberg News
when they held the Investor Day last Wednesday, the number that everyone went with was the third quarter real or actual revenue, $ 16. 8 billion. Which would mark decelerating growth from the prior quarter. Anthropic was basically growing at 100% quarter on quarter, year on year, and then it slowed down. ... There was a gap basis gross margin of 85%. adjusted operating profit is positive for two consecutive quarters. ... this is all Bloomberg reporting on what Anthropic is telling investors behind closed doors. podtrac.com
AlvaMixedAnthropic's reported growth slowdown reinforces concern about AI customer revenue, while its reported 85% gross margin and two quarters of positive adjusted operating profit push against the broader concern that AI customers are losing money; the figures come from what Anthropic told investors privately.Ed Ludlow
Host of Bloomberg Tech, Correspondent at Bloomberg News
The anxiety in the market was specifically around CoreWeave. A neocloud, a neocloud is just a fancy word for a company that runs data centers for AI workloads. ... they're relying on debt to fund data centers that they really need. The demand for their compute is beyond their ability to supply. In the medium term, the issue is that their interest obligations, what they're paying on the debt... is running beyond their operating income. And so it's very hard for investors to see how that conversion of money into real data centers fixes that. The economics aren't quite there. podtrac.com
AlvaMixedCoreWeave's debt-funded expansion, with interest obligations exceeding operating income despite unmet compute demand, strengthens concern about credit risk in AI infrastructure financing.
FUNDA
Research Platform for Public Equity Investors
AI spending growth is expected to slow at most companies in this sample. The fintech group’s spending growth is expected to slow after a rapid initial AI rollout. At the pharmaceutical group, better model selection and procurement terms are expected to curb spending growth. Spending growth at the pharmacy and health insurance group is expected to remain broadly steady. x.com
AlvaSupportsExpected AI spending growth is slowing in this enterprise sample as an initial rollout matures and model selection and procurement improve, weakening the assumption that customer spending will sustain Nvidia's projected growth.FUNDA
Research Platform for Public Equity Investors
Matching models to tasks can cut AI spending even as token use rises. After training, some teams at the fintech group roughly halved AI spending while using more tokens. x.com
AlvaSupportsSome fintech teams cut AI spending roughly in half while using more tokens, supporting the concern that cheaper model selection can pressure AI providers' revenue even as usage grows.