More Tales From Nvidia: Promises, Promises (Issue #243!)

Avatar photo Doug Kass on August 27, 2026

Interesting that Nvidia ($NVDA) apparently has not given revenue guidance a year out in ages, but now all the sudden they give an annual +70% revenue growth number right in front of a theoretical Anthropic IPO filing?

Hmmm..

It’s especially interesting in light of the fact that based on results (inclusive of the DSO spike and declining gross margins), the stock was trading off before they gave this year-out forecast (we covered as posted), which really they have no idea, because nobody ever does. Their own history of blowing up tells you that. 

I actually think the whole thing is something of a rig job between Nvidia and Anthropic, because apparently Anthropic is seemingly timing their IPO filing on the back of the Nvidia quarter as Nvidia needs Anthropic to be a public company to raise the money and help keep the shell game going.   

Even Nvidia cannot finance the whole thing on their own and buy all of their own revenue, although they sure seem to be trying.

Post Script: Also in regard to the get Anthropic public, 70% growth forecast for next year, how does industry CAPEX grow +70%? Balance sheets are shot, cash flows are negative, there seems to be no capacity for memory, and no more power capacity and states are now turning down data center requests as well. And then there are all the other industry issues that remain, including the move to open source and lack of underlying economics.

PPS:

More later as I have a lot of my plate today.

Position: Short NVDA (VS)

Select Premarket Movers

Avatar photo Doug Kass on August 27, 2026

Upside:

-OKTA +18% (earnings, guidance)
-CRM +9.9% (earnings, guidance)
-MBUU +9.9% (earnings, guidance)
-CRWD +9.3% (earnings, guidance)
-VEEV +8.4% (earnings, guidance)
-TENB +7.4% (to be added to S&P600 SmallCap 600 Index)
-CHRN +7.1% (plans 50 MW AI compute deployment with Microsoft in North America)
-DG +6.7% (earnings, guidance)
-NVDA +6.4% (earnings, guidance; reportedly in discussions to purchase Hugging Face for over $13B)
-NBIS +6.1% (Nvidia CFO notes Nebius to be the first to deploy its first rack-scale LPU system)
-NTNX +6.0% (earnings, guidance)
-SNDK +4.6% (Kioxia confirms plans over $31B Japan flash memory JV investment through 2032)
-BWXT +3.1% (confirms selected to deploy 20-MWe BANR microreactor at Fort Campbell for US Army Janus program)

Downside:

-BBW -15% (earnings, guidance)
-WEN -14% (reportedly Nelson Peltz (Trian) doesn’t currently have plans to make bid, but keeping options open about his stake)
-HPQ -12% (earnings, guidance)
-LUCK -12% (earnings, guidance)
-BBY -7.3% (earnings, guidance)
-DLTR -7.3% (earnings, guidance)
-HQY -5.2% (earnings, guidance)
-CELH -4.9% (Deutsche Bank Cuts CELH to Hold from Buy, price target: $35)
-MRNA -3.1% (files to sell $2B convertible senior unsecured notes due 2032 in private placement)
-TITN -2.1% (earnings, guidance)

Position: None

Treasury Actions, Fed Speaker and Economic Calendar

Avatar photo Doug Kass on August 27, 2026

TREASURY ACTIONS:

11:00 AM: Treasury announces a 3 and 6 month bill auction and a 13 and 52 Week Bill Auction 

11:30 AM; Treasury hosts a $100B 4 and a $90B 8 Week Bill Auction 

1:00 PM: Treasury hosts a $44B 7-Year Note Auction

FED SPEAKER:  

Morning: Federal Reserve Bank of Chicago President Austan Goolsbee (Non-Voter) Podcast Appearance — Rapid Response. (Interview to publish across podcast platforms early Thursday morning)

ECONOMIC CALENDAR:

Position: None

Today’s Trades

Avatar photo Doug Kass on August 27, 2026

Dougie Kass

Added to shorts in premarket:  NVDA $224.57 and CRWV $92.32 at 610AM and 600AM

Position: Short NVDA (VS), CRWV (VS)

Whitney Tilson Supports My EPS/Stock Price Thesis

Avatar photo Doug Kass on August 27, 2026

An excerpt from Whitney Tilson’s “Huge earnings growth doesn’t mean a huge rise in stocks“:

My friend Doug Kass of Seabreeze Partners Management agrees that strong earnings per share (“EPS”) doesn’t equate to strong price gains. In a recent missive (subscription required), he notes:

First-level thinking is lazy, simplistic and superficial – it looks for simple formulas and easy answers. To paraphrase Howard Marks: 

  • First-level thinking says, “S&P EPS growth will be strong, let’s buy the market.”
  • Second-level thinking says, “S&P EPS growth will be strong, but everyone knows it. Stocks are fairly or overpriced, let’s sell the market.”

Most recent examples of when S&P EPS was better than expected and strong were in 2018 (+20.5% EPS growth, -6.6% decline in the S&P), 2006 (+16.7% EPS growth, +11.3% rise in the S&P), 2005 (+19.3% EPS growth, +8.8% rise in the S&P) and 2004 (+20.1% EPS growth, +4.2% rise in the S&P).

Going back, during the last 50 years, other 12-month periods with robust EPS growth and less-than-stellar to down S&P price include the years 1993, 1992, 1987, 1984, 1979, and others.

He argues that this year offers a combination of unique market challenges compared with prior periods:

  • High and rising inflation and interest rates.
  • A burgeoning deficit and U.S. debt load may be a permanent condition giving the general lack of discipline from both parties in Washington DC.
  • Improvisational geopolitical and fiscal policies that present threats to political and economic stability.
  • Both parties are moving to extremes – the Republican party more to the right and the Democratic party to the left. With a possible Democratic congressional majority win in November, anti-corporate policy (higher corporate taxes, etc.) may be in the offing.
  • Traditional valuation metrics in the 98th percentile, two standard deviations above the average.
  • The AI capital spending spree and gains from investments have inflated S&P profit reports… an earnings reckoning may lie in the not too distant future.

I think Doug is right that huge corporate earnings growth likely won’t translate into a comparable huge rise in stocks.

Unlike Doug, I’m not bearish on stocks in general – with the exception of the AI bubble. When it bursts, stocks that have soared during this boom – such as CoreWeave (CRWV), which I analyzed on Monday – will undoubtedly crash.

Position: None

Recommended Viewing

Avatar photo Doug Kass on August 27, 2026

Rubenstein interviews Einhorn:

Position: None

The Consumer Is Spent Up, Not Pent Up

Avatar photo Doug Kass on August 27, 2026

* The cumulative or “stacked” inflation (since 2000) is weighing on the consumer sector

* This, coupled with the shrinking savings rate, is critical to the outlook for equities given the role of consumer spending and the large swath of stocks dependent on the consumer...

Combine the flatlining in real disposable income:

With the dwindling savings rate:

Source: Peter Boockvar

And the outlook for consumer spending over the next 12 months is poor. The shares of Costco ($COST), Walmart ($WMT), Dick’s Sporting Goods ($DKS) and other consumer-related equities already “know this.”

Position: None