tech
Nvidia is trying to quiet 'circular financing' accusations. Wall Street is unsure it will
Some analysts think Nvidia is making a move away from circular financing while others see a spinning spiral.
TL;DR
- Nvidia partnered with financial heavyweights to offer $500 billion in customer financing for its products.
- The initiative aims to counter accusations of 'circular financing' where companies invest in their own customers.
- Some analysts, like Vivek Arya, believe this shifts the capital commitment to the consortium, not Nvidia's balance sheet.
- Other analysts, including those at Wells Fargo and Mizuho, are skeptical, questioning if it truly addresses end-user demand and economic return.
- The MOUs provide assurances on depreciation costs, which some analysts view as 'depreciation insurance'.