"Nvidia ( NASDAQ:NVDA ) recently found itself in the unusual position of distributing a defensive seven-page rebuttal to Wall Street analysts, directly countering accusations of Enron-style accounting. The document, obtained by outlets like and Business Insider , dismisses claims of hidden debt, inflated revenue through special purpose vehicles, and vendor financing schemes akin to those that sank Enron, WorldCom, and Lucent in the early 2000s."
"On his new Substack, " Cassandra Unchained ," Burry clarifies he's not labeling Nvidia an outright fraud like Enron. Instead, he positions it as the modern equivalent of Cisco Systems ( NASDAQ:CSCO ), the networking giant that epitomized the dot-com boom's excess before its bust. "I am not claiming Nvidia is Enron. It is clearly Cisco," Burry writes bluntly, rejecting Nvidia's memo as "disingenuous" for dodging his core points on stock-based compensation and chip depreciation."
"Though it doesn't name him outright, the memo clearly targets Michael Burry, the "Big Short" investor famous for spotting the 2008 housing crash. Burry's recent X posts and Substack writings have hammered Nvidia's revenue recognition, stock-based compensation, and depreciation practices for AI chips, suggesting they mask an overinflated AI bubble. In response, Burry tweeted that he stands by his analysis, promising a fuller breakdown soon."
Nvidia issued a detailed rebuttal denying hidden debt, inflated revenue via special-purpose vehicles, and vendor-financing schemes likened to early-2000s corporate collapses. The rebuttal addressed criticisms related to revenue recognition, stock-based compensation, and depreciation of AI chips. Michael Burry publicly reiterated his concerns, affirmed his analysis, and compared Nvidia to Cisco rather than Enron while criticizing Nvidia's responses as disingenuous. Nvidia maintained that its financials are transparent and its business is sound. The exchange amplified investor concern about the durability of AI-driven valuation levels amid historical parallels to past tech booms.
Read at 24/7 Wall St.
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