Bernstein analysts weighed in on the recent social media discussion centered around Nvidia (NASDAQ:NVDA).
While these short theses have garnered some attention, they are viewed as lacking merit and are characterized by Bernstein analysts as "puerile" or immature in nature.
One of the criticisms mentioned in one of these reports is that NVIDIA's revenues grew significantly year-over-year in the second quarter (FQ2), but their cost of goods sold (COGS) showed minimal movement.
“This is nonsense… Closer reading of the requisite filings would find that excluding charges COGS actually increased by ~70% YoY in FQ2 along with 101% increase in revenue, a ~76% incremental gross margin and entirely normal given the YoY strength in datacenter,” said the analysts.
The second bear argument is related to GPU cloud vendor Coreweave, alleging wrongdoing or malfeasance tied to Coreweave's business model, management, recent debt facility, and NVIDIA's investment in the company.
“NVIDIA does have a stake in Coreweave, but also in numerous other AI startups. And as companies like Coreweave build businesses based on NVIDIA GPUs it is in NVIDIA's interest to see them succeed given their presence offers a counter to the threat of bigger CSPs developing their own internal AI offerings,” the analysts further noted.
The analysts had one final message for investors.
“We like NVIDIA, and as many of you know we love using Twitter. But if you want to discuss the bear thesis on the stock we are perfectly willing and happy to do that too (through proper channels of course), and save you the hassle of getting your theses from random Twitter account.”
Nvidia stock is rated as Outperform, $675 per share price target.