Ming-Chi Kuo Fires Back At Nvidia 'Fraud' Critics, Says Claims Are Built On 'Factual Errors'

Core Viewpoint - Ming-Chi Kuo, a notable tech analyst, defends NVIDIA Corporation against allegations of financial misconduct, particularly regarding its Days Sales Outstanding (DSO) and inventory levels, asserting that these metrics are consistent with industry standards and not indicative of fraud [1][2]. Group 1: DSO Analysis - Kuo argues that the increase in DSO is reasonable as receivables are becoming more concentrated among a few large customers, reflecting their bargaining power [3]. - Critics have misjudged NVIDIA's DSO by comparing it to inappropriate peer groups; when compared to suppliers serving the same cloud service providers, which typically have DSOs exceeding 60-70 days, NVIDIA's figures are more aligned [4]. Group 2: Inventory Examination - Kuo addresses concerns regarding a 32% quarter-over-quarter increase in inventory for Q3 FY26, clarifying that NVIDIA's Q2 FY23 inventory had actually risen by approximately 23% QoQ, not declined [5]. - The recent inventory surge is attributed to a significant ramp-up in upstream capacity at TSMC, particularly linked to the mass production of the new Blackwell B300 GPU, indicating preparation for strong demand rather than fraudulent activity [5]. Group 3: Criticism Context - Kuo's defense comes amid scrutiny of NVIDIA's financial practices, with independent researcher Shanaka Anslem Perera highlighting potential red flags, including an 89% increase in accounts receivable, extended payment cycles, and weaker cash conversion compared to peers [6].