Before you short Nvidia after reading investment advice from 'Twitter randos,' read this

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Bernstein analyst Stacy Rasgon didn't want to have to say it, but don't get your investment advice from random people on social media.

Nvidia Corp.’s revenue doubled while its cost of goods barely crept up, so there must be something fishy, right? A company is using their Nvidia graphics processing chips as collateral for billions in loans — that doesn’t sound right, does it?

“They are, for the most part, puerile,” he said, adding that clients keep asking about them, and whether or not they could be moving the stock. “Hence we write this note today.” “This is nonsense,” Rasgon wrote. The analyst explained that Nvidia took $1.34 billion in charges that included about $1.22 billion in inventory reserves and that “ran through COGS in the year-ago quarter,” when it appeared Nvidia was melting down.

The second “thesis” concerned GPU cloud vendor Coreweave Inc., which recently listed its Nvidia AI chips as collateral in financing $2.3 billion in debt led by Blackstone Inc. BX, -0.31% and Magnetar Capital.

 

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