Michael Burry is reaffirming his critical stance on Nvidia, even after the company reportedly challenged his analysis in a detailed memo to Wall Street analysts. Burry has questioned the sustainability of Nvidia's chip demand, the true cost of stock dilution, and the economic reality behind AI-related deals. He argues that the actual end-customer demand is smaller than it appears, as many customers are funded by the very companies they buy from, creating a circular dynamic that inflates sales figures.
Burry also highlighted that despite Nvidia repurchasing nearly $113 billion of its stock since 2018, there are 47 million more shares outstanding today. He estimates that while Nvidia spent $20.5 billion on stock-based compensation (SBC), the actual cost of dilution was about $112.5 billion, effectively halving shareholder earnings. Nvidia, however, is pushing back on these claims, with their investor relations team directly addressing a dozen claims made by skeptical investors.
Despite Burry's concerns, many analysts remain optimistic about Nvidia's long-term outlook. NVDA stock has a Strong Buy consensus rating based on 39 Buys, one Hold, and one Sell rating. The average Nvidia price target of $257.33 implies 43.9% upside potential from current levels.
