Short-Seller Jim Chanos Has A 'Friendly Reminder' For Investors: Most Of Nvidia's Operating Cash Flow 'Actually Capex From Other Mag 7 Darlings'
Portfolio Pulse from Shanthi Rexaline
Jim Chanos, a notable short-seller, raised concerns about Nvidia Corp.'s (NASDAQ:NVDA) dependency on the Magnificent 7 companies for its operating cash flow, suggesting that most of it comes from their capital expenditures. This comes amid discussions on the sustainability of Nvidia's growth, fueled by the AI boom. Speculation exists around whether companies like Meta Platforms or Microsoft, significant Nvidia customers, will continue their high level of GPU spending. Nvidia's stock rose 2.03% in premarket trading following its strong Q4 results.
February 23, 2024 | 11:09 am
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Jim Chanos highlighted concerns about Nvidia's dependency on capital expenditures from the Magnificent 7 companies, potentially impacting its operating cash flow and raising questions about the sustainability of its growth.
Chanos' comments bring to light potential risks in Nvidia's business model, focusing on its dependency on a few large customers for a significant portion of its revenue. This could lead to increased scrutiny from investors and potentially impact Nvidia's stock price in the short term, especially if these companies reduce their GPU spending.
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