The Heretic’s Guide to AI’s Stars Part III: Tracepalooza & the Bezzle

AI Demand, Offshore Financing, & Compression Too

“They are just flying empty airplanes around.”
- Son

NVIDIA is the North Star, Orion, the whole Milky Way.

NVIDIA is benefitting from strong demand, but is selling into a concentrated set of buyers whose own demand is being distorted by a training and benchmarking phase that will not last. That distorted demand is working like a bullwhip into NVIDIA’s own supply chain through custom supply commitments as well as downstream into data-center financing. Looming over it all is the bezzle, which once seen, cannot be unseen, and once revealed, does not exist.

Fortunately, its Luminous, its Grace reported big positive headline numbers this week, so a fresh 10-Q is upon us. I love the smell of 10-Qs in the morning.

Some are watching inventory, I know, but inventory does not stand out. The inventory breakdown makes sense. Raw materials inventory surged in Q1 FY27 but is consistent with the Blackwell Ultra ramp as well as the Q4 FY25 Blackwell ramp pre-positioning of inventory.

More interesting are NVIDIA’s customers. Customer concentration is off the charts.