SANTA CLARA, Calif. — Nvidia is pushing back on the skeptics of its $4.5 trillion market value with a fiery memo to Wall Street analysts, in which it jabs short seller Michael Burry over his wagers against its stock and rejects comparisons to Enron and other frauds of yesteryear as “baseless,” Nov. 27, 2025. The hard-hitting Memo from Nvidia stresses that the chipmaker’s explosive AI-driven growth is underpinned by transparent accounting and real demand, not ‘financial engineering’, as it seeks to calm investors following a tumultuous month for its shares.
Inside the Nvidia memo to Wall Street
The Nvidia memo, released last week and subsequently shared in its entirety by brokerage house Bernstein, was first described in a Reuters story that characterized it as a point-by-point rebuttal to Burry and other skeptics. The company also disputes an AI-assisted online analysis that claimed inventories were building and the customers couldn’t pay, pointing to stable days-sales-outstanding and noting that rising inventory reflects a ramp-up of its latest Blackwell chips, which it acknowledges come with lower margins and higher warranty costs due to their engineering complexity, not weak demand.
Nvidia, which says it has bought back roughly $91 billion of stock since 2018 — rather than the $112.5 billion Mr. Burry estimated when accounting for taxes on the company’s restricted stock units — maintains that “our employee equity awards are similarly positioned to our peer companies,” according to a previous Business Insider article that published elements of Nvidia’s memo text. The note also rebuts circular financing allegations in the AI ecosystem, painting Nvidia’s strategic investments as a small part of overall private-capital flows worldwide and emphasizing that most portfolio companies are getting money from third-party customers, not reverse-pleasing parties with Nvidia itself.
The memo goes out of its way to counter Enron-style analogies. Language introduced by the data-center trade outlet DCD, Nvidia tells analysts that its “underlying business is economically sound” and that, “Unlike Enron, Nvidia does not use Special Purpose Entities to hide debt and inflate revenue,” before also disputing comparisons with WorldCom or Lucent regarding things like unsanctioned capitalizing of expenses or growing reliance on vendor-financed sales.
Michael Burry responds to the Nvidia memo.
Burry, who is best known for forecasting the 2008 housing collapse in “The Big Short,” told MarketWatch in a second message on Monday that the Nvidia memo does not sway him. In a Substack essay that was in turn summarized in its own Business Insider story, among other coverage, called “Unicorns and Cockroaches: Blessed Fraud,” he wrote that the document responded to accusations he hadn’t made; it was “one straw man after another,” and it “almost reads like a hoax.”
He says his real problem isn’t Nvidia’s depreciation policies but that the chipmaker’s largest customers — cloud and internet giants building AI data centers powered by Nvidia hardware — are stretching the useful life of chips and servers to 5 or 6 years. Burry cautions that such accounting can inflate profits today but lead to massive writedowns in the future if GPU technology becomes redundant sometime between 2026 and 2028, and he adds that AI-driven capex plans are setting the industry up for a slow-motion repeat of its own dot-com bust. He has disclosed put options against both Nvidia and Palantir, worth about $1.1 billion in notional value, positions he says cost approximately $10 million each, highlighting his belief that parts of the AI trade have entered bubble territory.
Valuation fears years in the offing
The clash over the Nvidia memo follows a stunning run-up in the company’s stock price. The Verge noted that when Nvidia briefly slipped into the trillion-dollar club back in 2023, the AI boom had turned the chipmaker into a key supplier to tech companies rushing to add generative AI tools. Nvidia crossed $4 trillion in market value by July 2025, as the Guardian reported on its milestone, and just three months later, it had become the first company to briefly cross $5 trillion, Reuters reported on the record.
Even after a retreat from that high, Nvidia’s value remains at about $4.5 trillion, or approximately 7 percent of the S&P 500. It posted $57 billion in revenue in its most recent quarter — up roughly 62 percent from the previous year — helping quell AI-bubble fears somewhat but not entirely, according to an Associated Press analysis of its numbers. The European Central Bank has also warned that “stretched” US tech valuations, driven by fear of missing out on AI and heavy corporate spending on infrastructure, could be susceptible to any slowdown in growth or disappointment with the AI rollout.
What the Nvidia memo says about the AI bubble debate
For Nvidia’s executives, the memo is as much about drawing a bright line between exuberant pricing and outright fraud as it is about addressing a high-profile short seller. By hammering the fact that it doesn’t do Enron-style special-purpose vehicles, signing and bonus guarantees funded by vendors, and reminding everyone to just look at audited filings and long-run cash-flow trends for guidance, the company is attempting to reframe the debate around whether demand from AI can sustain current orders rather than if its books are tellers of tales.
For critics such as Burry, however, the Nvidia memo changes little: the chip designer may not be an Enron, but its meteoric ascent has contributed to the concentration of market risk in a few AI winners whose fortunes ride on a still-unproven wave of data center and advanced-chip spending. The current standoff between Nvidia and one of Wall Street’s most high-profile skeptics will help decide whether the world’s most valuable company can live up to a valuation that already prices in its serving as the central gear of an artificial intelligence economy — or whether the next chapter in this story looks like more bubble deflation than triumphal progress toward a computing-inflected future.
