Jan. 21 — Joined by SoftBank CEO Masayoshi Son, OpenAI chief Sam Altman, and Oracle CEO Larry Ellison in the Oval Office, Trump announces the $500 billion "Stargate" project to build AI infrastructure in the US.After topping $100,000 for the first time in December 2024, bitcoin hits a record high above $109,000 in the hours before Trump's swearing in.Jan. 20 — Donald Trump is sworn in for a second term as US president. His first hours in office see the president sign a series of executive orders , including ...

The AI gold rush has investors cautious that the industry may be feeding itself through a risky cycle of circular financing. "I would be cautious on the financing aspect of OpenAI, the circular financing," Miramar Capital co-founder Max Wasserman told Yahoo Finance's Opening Bid. "Given the concentration, you need to diversify the portfolio, and you need to understand what you own and what happens if you're wrong." He added that if the AI trade "goes south, it's going to take the indices with it." An e ...

These days, the OpenAI investment news cycle feels like the most expensive game of musical chairs ever played. And this week, there’s a new player scrambling for a seat. Amazon is in talks to invest at least $10 billion in OpenAI, according to a report from The Information, in a deal that could push the value of the startup past $500 billion. Analysts say the deal looks like a marriage of necessity: OpenAI needs help funding its enormous burn rate, while Amazon needs proof that its custom Trainium chips ...

Core Insights - Nvidia is under scrutiny for allegations of circular financing in its AI chip ecosystem, where investments in customers lead to inflated sales through repeated purchases of Nvidia GPUs [3][4] - The company has countered these claims, asserting that there is genuine demand from hyperscalers, despite increasing criticism and warnings from short sellers about potential hidden risks [4] - Michael Burry compares Nvidia to Cisco during the dot-com bubble, suggesting that Nvidia's growth could lead to overcapacity if AI demand declines, with a looming "capex apocalypse" due to extended GPU depreciation practices by hyperscalers [5][6][8] Company Actions - Nvidia announced a $2 billion investment in chip designer Synopsys to strengthen its supply chain amid the scrutiny over financing practices [4][8] - The investment signals Nvidia's confidence in its partnerships and its commitment to the chip development ecosystem [4][8] Industry Context - Hyperscalers like Microsoft and Alphabet have extended the depreciation period of Nvidia GPUs to four to six years, which contrasts with Nvidia's typical 12 to 18-month refresh cycles, potentially understating sector depreciation by $176 billion from 2026 to 2028 [7][8] - This practice raises concerns about the sustainability of profit inflation within the tech sector, as it may mask the true economic realities of GPU utilization [7][8]

Nvidia ( NASDAQ:NVDA ) is facing intensifying scrutiny over allegations of circular financing in its AI chip ecosystem. ...

Market Overview - US stock futures are rising after equities experienced a third consecutive day of gains, with the S&P 500 trading above its 50-day moving average, indicating technical support for stocks [1][6] - Wall Street remains optimistic about the stock market despite concerns over valuations and the Federal Reserve's future actions [1][6] Company Earnings - Deutsche Bank and JP Morgan have raised their 2026 targets for the benchmark index, with JP Morgan suggesting the index could reach 8,000 if the Fed continues to ease [2][33] - HP's profit forecast fell short of estimates, leading to a plan to cut up to 6,000 jobs through increased AI utilization, which is expected to save the company $1 billion annually [2][30] - Dell's stock is gaining due to a positive outlook for AI server shipments, despite slightly missing revenue estimates for the third quarter [3][2] AI Sector Dynamics - Nvidia's shares have recovered some losses, but the company faces skepticism regarding its AI dominance, with a 14% decline since the start of the month, erasing over $700 billion in market value [4][6] - Concerns have been raised about Nvidia's financial practices, including allegations of circular financing and overinvestment in money-losing companies [4][23][24] - The AI trade remains volatile, with significant focus on both large and small-cap stocks, particularly in the context of ongoing AI developments [8][12] Sector Performance - The healthcare sector has emerged as a strong performer, up 14% since the beginning of the fourth quarter, while utilities have only increased by 2% [11][12] - The Russell 2000 index has shown notable strength, up nearly 7% over the past three days, indicating a potential shift in market dynamics [9][12] Future Outlook - Wall Street forecasts for 2026 are generally bullish, with expectations of strong earnings growth and AI-related productivity driving market performance [33][41] - The potential for the S&P 500 to surpass 8,000 hinges on further Fed rate cuts and strong earnings, with JP Morgan and UBS providing optimistic price targets [33][34] - Analysts suggest that a broader economic recovery could occur, driven by improvements in sectors like housing and manufacturing alongside ongoing AI investments [42][44]

Core Viewpoint - Nvidia is set to release its fiscal Q3 2026 earnings on November 19, with heightened attention due to the ongoing scrutiny of the AI sector and potential accounting issues raised by notable investors like Michael Burry [1][2]. Earnings Estimates - Analysts expect Nvidia to report revenues of $54.94 billion for fiscal Q3, slightly above the company's guidance of $54 billion, with earnings per share projected to rise by 50% to $1.17 [5]. Key Areas of Focus - **Depreciation Concerns**: The management's commentary on chip depreciation will be crucial, especially in light of Burry's allegations regarding the rapid depreciation of Nvidia chips [6]. - **Investment Activities**: Nvidia has announced significant investments, including up to $100 billion in OpenAI and $5 billion in Intel, raising concerns about potential circular financing [6]. - **Competitive Landscape**: The company faces increasing competition from AMD and other tech giants developing custom chips, as well as from Chinese companies pivoting to custom chip production [6]. - **China Business Uncertainty**: There remains uncertainty regarding Nvidia's operations in China, particularly with the U.S. government's export regulations and concerns over the use of Nvidia chips by domestic companies [6].

What is your takeaway as to the circular financing and whether this is a concern. I think that there's clearly a lot happening, right. And the integration that we're having between the private markets as well as the public markets is clearly something to be watching.And it's a space that we follow very, very closely. We think that actually what we've been seeing with open eyes relationships is the fact that they're broadening them. They're creating structures that are allowing them to potentially IPO long t ...

Group 1: AI Market Sentiment - Growing skepticism around artificial intelligence (AI) as a potential bubble, with experts suggesting it differs from the dot-com bubble and may take years to burst [1][2] - Bank of America analysts indicate no overbuilding of AI data centers due to limitations like power access and space [2] - JP Morgan Asset Management notes that current players are better capitalized than those during the dot-com era, with AI monetization already underway [2] Group 2: Michael Burry's Position - Michael Burry's hedge fund, Scion Asset Management, revealed a short position on Nvidia (NVDA) and Palantir (PLTR), causing significant industry concern [2] - Burry claims that AI hyperscalers are artificially inflating earnings by extending the useful life of assets, which he argues is a common modern fraud [4][6] - Allegations suggest that companies are manipulating depreciation figures to enhance earnings, raising serious concerns about accounting practices in the industry [5][6]

Core Insights - Michael Burry disclosed a $1.1 billion short position against Nvidia and Palantir Technologies, leading to a sell-off in tech markets [1] Company Performance - Palantir's stock dropped as much as 16% before closing down approximately 8%, despite beating third-quarter earnings estimates and raising full-year guidance [2] - Nvidia's stock fell between 2% and 4% during the same trading session, but it did not drop below its 50-day benchmark, indicating stronger fundamentals [2][5] - Palantir trades at a price-to-earnings ratio of approximately 254 and a price-to-sales ratio of around 115, making it vulnerable to bearish pressure [3] Market Reaction - The sell-off triggered by Burry's position affected global markets, with significant declines in Asian and European indices, particularly in Japan and South Korea [3] - The Nasdaq Composite recorded its largest one-day percentage drop in nearly a month at roughly 2%, with all members of the "Magnificent Seven" AI-related stocks closing lower [2] Valuation Concerns - The current trading prices for both stocks are below the average of the last 50 days, raising concerns for technical analysts [4] - Burry's disclosure has injected volatility into the AI sector, making investors cautious about buying at high valuations [6] Broader Market Sentiment - Major Wall Street executives, including CEOs from Morgan Stanley and Goldman Sachs, warned investors to prepare for potential market corrections of 10% to 20% in equity markets over the next couple of years [7] - Deutsche Bank is reportedly exploring strategies to hedge its exposure to AI-driven investments in data centers [7] - Burry highlighted "circular financing" in tech, questioning the sustainability of reported growth in the sector [7]