Nvidia: A Fool’s Gold Rush?

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Oy vey, folks, gather ’round! Wednesday, February 25th. That’s the day Nvidia, the darling of Wall Street – and believe me, darling is a dangerous word – reports its earnings. It’s like watching a magician pull rabbits out of a hat…except the hat is made of silicon, and the rabbits are overvalued stock options. They say it’s the AI chip giant, but I say it’s a beautifully engineered hype machine. And I, my friends, am here to poke it with a stick. A very expensive, mahogany stick, naturally.

Everyone’s breathlessly anticipating what Jensen Huang, that magnificent showman, will say. He could announce they’ve discovered a way to power servers with hamsters on tiny treadmills, and the stock would still go up. But let’s not get carried away. Let’s look under the hood, shall we? Because when the music stops, somebody’s going to be left without a chair, and I suspect it won’t be Jensen.

1. Data Centers and the Almighty Demand

They’re guiding for $65 billion in revenue. Sixty-five billion! It’s enough to make Croesus blush. But here’s the thing: what happens when the hyperscalers – those cloud behemoths – decide to build their own chips? It’s like a baker deciding to grow his own wheat. Sure, it’s extra work, but it cuts out the middleman. And Nvidia is the middleman. A very profitable one, admittedly, but a middleman nonetheless. They’re banking on Blackwell and Rubin, these new GPUs, being the next big thing. But let’s be honest, in this business, “next big thing” lasts about as long as a politician’s promise.

They claim a $500 billion opportunity. Five hundred billion! It’s enough to make me spill my borscht. But is it real demand, or is it just everyone panicking and buying because…well, because everyone else is buying? It’s a digital tulip mania, I tell you! A digital tulip mania!

2. Pricing Power: A Fleeting Fantasy?

Margins, margins, margins! That’s what everyone’s obsessed with. Nvidia’s been enjoying some truly obscene margins, but the party can’t last forever. They were at 76%, then dipped, then bounced back. It’s like a seesaw operated by a caffeinated squirrel. The question is, can they maintain these levels when competition heats up? The hyperscalers aren’t exactly known for their generosity. They’ll squeeze every penny until Lincoln’s face turns green. And if Nvidia tries to hold firm? They’ll just build their own chips. See? It all comes back to that!

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3. China: A Geopolitical Kabuki Dance

Ah, China. The land of opportunity…and regulatory nightmares. Nvidia wants to sell its chips there, but Uncle Sam keeps throwing wrenches into the works. It’s like a vaudeville act where the props keep malfunctioning. They struck a deal – or think they struck a deal – to sell H200 chips, with the U.S. government getting a quarter of the profits. A quarter! It’s highway robbery, I tell you! Legal highway robbery, but robbery nonetheless. But then the government started a “national security review.” Of course they did. Because everything’s a national security threat these days. Even my Aunt Mildred’s knitting needles.

They estimate the Chinese market could have been $50 billion last year. Fifty billion! That’s enough to buy a small country! But they’re not factoring in any revenue from China in their guidance. Smart move, perhaps. It’s better to under-promise and over-deliver than to get caught with your pants down. Although, frankly, a little pants-down honesty would be refreshing.

So, there you have it. Nvidia. A company with a lot of hype, a lot of potential, and a lot of risk. Will it continue to soar? Will it crash and burn? Your guess is as good as mine. But one thing’s for sure: it’s going to be a wild ride. And I, my friends, will be watching with a mixture of amusement, skepticism, and a very large bag of popcorn.

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2026-02-23 00:12