‘We are not Enron’: Nvidia rejects AI bubble fears

Core Viewpoint - Nvidia has rejected claims of being involved in an AI bubble and dismissed comparisons to historical financial scandals, asserting the integrity of its business model and financial reporting [1][4][5]. Group 1: Company Positioning - Nvidia has communicated to analysts that it is not inflating revenues artificially and has countered claims of circular deals in the AI sector, emphasizing genuine demand from businesses [2][4]. - The company has stated that its business does not resemble historical accounting frauds, specifically distancing itself from Enron and other companies accused of fraud during the dotcom bubble [4][5]. Group 2: Market Reactions - Following Nvidia's rebuttal, its shares experienced a decline of 6% amid concerns over competition from Google, which is reportedly in talks to provide chips to Meta [2][3]. - Nvidia's market valuation reached $5 trillion in October but has since decreased to approximately $4.2 trillion due to fears of overvaluation in AI stocks [3]. Group 3: Investor Concerns - Michael Burry has raised alarms regarding Nvidia's accounting practices, particularly its share compensation schemes and the sustainability of demand for AI tools, suggesting that true demand is "ridiculously small" [6][7]. - Burry has taken significant short positions against Nvidia and Palantir, exceeding $1 billion, indicating a belief that these stocks may decline [7].