Nvidia isn't Enron So What is it?

Comments

Comment by gregw2 18 hours ago

It's not Enron.

It's Sun Microsystems in 1999.

The growth is a one time surge due to AI hype, like Y2K fears which required double hardware purchases for pre-y2k testing and the internet boom. When Y2K passed, while the internet boom continued, all those test servers (and routers and other hardware) bought pre-y2k were freed up and reused, cutting growth #s and driving up P/E ratios for Sun instantly, and with Sun serving as a proxy for the internet boom, the boom was declared a bust in Q1 of 2000. Oh and low end x86+Linux competition didn't help.

Comment by NoPicklez 1 day ago

As someone who began their career in financial audit over a decade ago and learning about Enron, it has frustrated me that people have been calling Nvidia the new Enron.

Just because companies are throwing chunks of money around, does not mean Nvidia is like another company that was found to commit fraud and be required to file for bankruptcy. Its a classic social media reductionist take that has gained popularity and has been misattributed to what happened at Enron, not even close.

From what I have seen it has been "Nvidia is doing some big deals with other big companies in a way that I don't understand, it must be dodgy and an Enron like scandal"

Nvidia based on its audited financial statements which are audited in accordance with the very standards set following Enron (Sarbanes Oxley) which any US accountant would be familiar with, is an extremely profitable company.

Comment by rini17 14 hours ago

Yes the article is very meandering. But near the end he mentions that the chips nvidia sold last three quarters alone would require about 15GW of electricity to actually run. But where are all the datacenters? And how long can this go on?

When the ground truth is someone keeps buying zillions worth of equipment from investors' money, but the chances to use it are slim, not to even mention getting some profit off it, there just has to be some fraud involved. Probably not on nvidia's side, but would not bet on it.

Comment by NoPicklez 9 hours ago

I am going to assume those GPU sales are AI specific chips and not gaming cards.

A lot of these data centers do seem to be being built with many more planned, either way Nvidia has sold the cards. I don't necessarily think there's fraud involved but simply a lot of demand, speculative or otherwise.

Nvidia's financial statements are externally audited, their inventory is audited and their accounts receivable functions are also audited. I'd put a lot of faith in those audits.