Core Viewpoint - Nvidia's recent quarterly earnings report indicates a strong growth trajectory in AI spending, suggesting a "virtuous cycle" rather than a bubble in the AI sector [1][10]. Financial Performance - Nvidia reported a record $57 billion in sales for its fiscal third quarter, marking a 62% increase year-over-year and a 22% increase from the previous quarter [3]. - The company achieved a net income of $31.91 billion, up 65% from the same period last year, with earnings per share of $1.30, reflecting a 67% increase [4]. Sales Breakdown - Data center sales were the primary contributor to Nvidia's profits, reaching $51.2 billion, which is a 25% increase from the previous quarter and 66% higher than a year ago [5]. Market Dynamics - Nvidia has not made any sales in China this year, which previously accounted for $17 billion in revenue, or approximately 13% of total revenue [6]. - The company is facing export restrictions and a ban from China, but remains committed to engaging with both U.S. and Chinese governments [7]. Future Outlook - CEO Jensen Huang announced over $500 billion in orders for Blackwell and Rubin GPUs through 2026, with $350 billion in revenue still to be realized [8][10]. - The AI infrastructure market is projected to be a $4 trillion opportunity by the end of the decade, with Nvidia positioned to capture a significant portion of that spending [12]. Investment Potential - Nvidia is expected to generate as much as $500 billion in free cash flow in the coming years, enabling continued investment in AI and GPU development [13].

Core Viewpoint - Michael Burry critiques Nvidia's capital allocation strategy, claiming that the $112.5 billion spent on stock buybacks since 2018 has resulted in "zero" additional shareholder value [1][2][3]. Financial Analysis - Burry highlights a disconnect between Nvidia's aggressive share repurchases and the increase in the company's share count, noting that $20.5 billion has been spent on Stock-Based Compensation (SBC) since 2018 [2][3]. - Despite Nvidia reporting $205 billion in net income and $188 billion in free cash flow during the same period, Burry argues that the buybacks primarily offset SBC-related dilution, resulting in 47 million more shares outstanding [3][4]. - Burry asserts that the true cost of SBC dilution was $112.5 billion, which he claims reduced owner's earnings by 50% [3][4]. Market Performance - Nvidia's stock has outperformed the broader market, climbing 34.86% year-to-date compared to 17.03% for the Nasdaq Composite and 17.47% for the Nasdaq 100 [6]. - The stock finished the regular session at $186.52, up 2.85%, and surged another 5.08% in extended trading, with a year-over-year gain of 27.85% [6]. Strategic Initiatives - Nvidia's CFO emphasized the importance of maintaining a strong balance sheet to fund growth and secure supply chains during the recent earnings call [5]. - CEO Jensen Huang mentioned plans for continued stock buybacks and strategic investments in partnerships with companies like OpenAI and Anthropic to enhance the reach of Nvidia's CUDA platform [5].