☕ What’s next for Nvidia? Unka Jensen makes a beeline for Beijing
Jul 16, 2025Howdy! 👋
The June PPI dropped to zilch.
No, that’s not a typo.
June’s producer price index, typically considered a leading indicator for pipeline inflation pressures, reflected no change in wholesale prices for the month. So much for ‘the tariffs are going to reek’… or at least wreak havoc thesis espoused by many. 🤦
I told you two things:
- they’d come and go with little impact; and,
- that it’d be super smart to buy into the chaos.
I hope you did.
Since then, the S&P 500 has returned 23.35% from April lows while many companies I prefer to own and share with the OBA Family have done considerably better (which is, of course, why I own em).
Negotiations are like that.
Both sides posture, throw thinly veiled barbs at each other under the guise of working together. Then ultimately do just that.
Today’s global economy is too intertwined not to.
The investing takeaway?
When the bulls and bears fight, it’s the chickens who get slaughtered.
Just sayin.’
Here’s my playbook.
1 – Not all bank stocks are the same
Bank of America, Goldman Sachs and Morgan Stanley have all now reported earnings, following on from JPM yesterday.
Don’t make the mistake a lot of investors are making by thinking that they’re the “same.”
JPM crushed earnings while Goldman Sachs and Morgan Stanley beat top and bottom-line estimates. (Read) (Read)
Bank of America, meh. (Read)
Three guesses which one’s best in class and the first two don’t count.
At the risk of sounding like a broken record, “buy the best, ignore the rest.”
2 – Unka Jensen makes a beeline for Beijing, now what?
Jensen Huang is back in Beijing as Nvidia prepares to resume shipments of its H20 AI chips to China—after a U.S. export ban was quietly reversed. (Read)
Wait till you see what happens next!
Huang told reporters he wants to send even more advanced chips to China over time, walking a tightrope between U.S. policy and Chinese opportunity.
$5T here we come. 😄
Meanwhile, the question I’m thinking about is whether or not Nvidia could or would want to reverse the $4.5B write-down it took in May on unsold H20 inventory.
If my understanding is correct, reversing it is possible.
US GAAP – Generally Accepted Accounting Principles - regs allow inventory to be written down to lower the cost or market value (net realizable value).
If market conditions improve for any reason – i.e. export restrictions ease, or Nvidia finds a new market for the H20 chips—Nvidia can reverse the write-down to the extent of the original loss.
However, reversals are not allowed under GAAP so unless Nvidia adopts IFRS – International Financial Reporting Standards - or the inventory is repurposed into a different product line and revalued as such, a reversal is unlikely.
The other thing to think about is that such a monster reversal would invite regulatory scrutiny regarding earnings management, but I have a hard time believing they wouldn't be given a pass under the circumstances.
Still, Huang may want to reverse it anyway.
Reversing a write-down would reduce COGS – cost of goods sold - in the current or future period, padding margins. It would also flow straight into pre-tax earnings. And, not for nothing, support the stock price narrative and the path to $5T.
Accountants would likely treat this as a one-time non-recurring gain, probably adjusted in the “adjusted EPS” or just a footnote. But big headlines.
What if Nvidia doesn’t reverse?
I see three smart moves on the horizon, all of which are potentially great for investors:
- Repurposing the chips into other markets like the Middle East where there’s a big AI push of epic proportions. Or even Southeast Asia.
- Bundling H20s into new architecture to effectively clear inventory.
- Use H20s for internal R&D or – this is my bet – for partnerships, because doing so would allow Nvidia to turn ‘em into capitalized expenses instead of losses even without an official reversal.
How will we know which path Nvidia takes?
Watch inventory numbers closely along with any new H20 disclosures and partnership agreements. We could also see a change in deal flow with repackaged SKUs.
Nvidia’s next 10-Q – a quarterly SEC filing – will probably read like a good novel in that regard. 👏
3 – ASML: The “Untouchable” just got touched
ASML tanked -6.5% despite beating Q2 earnings because management refused to confirm growth in 2026.
Roh-roh.
That's a cardinal boo-boo when you’re supposed to be the crown jewel of chipmaking.
Bookings hit €5.5B and AI chip demand remains fierce, but management is worried about tariff headwinds, geopolitical fog, and shrinking visibility.
ASML still owns the high-end chip tools market but is a long way from being bulletproof like many investors think.
There’s always a best.
And a rest.
Just don’t confuse the two.
And if you’d like to join a worldwide community of investors from every walk of life who are sorting this stuff out and changing their lives by doing so, you know where to find me.
Meanwhile, here’s a thought.
Just because it says “AI” on the label doesn’t mean you back up the truck. Wall Street’s still bullish, but lazy money’s in for a rude awakening.
4 – Peter Thiel just bought a stake – should you?
Bitmine Immersion Technologies jumped as much as 20% Wednesday after Peter Thiel’s Founders Fund disclosed a 9% stake. Shares held onto a 12% gain into the close. (Read)
The move sparked a sympathy rally.
SharpLink Gaming rose 10% — its board is chaired by Ethereum cofounder Joe Lubin. Bit Digital tacked on 7% after pivoting away from BTC mining last month to focus on ETH staking and treasury management.
Bitmine is gunning to become the MicroStrategy of Ether, recently bringing on my friend and colleague, Fundstrat’s Tom Lee as board chair.
Shares are up more than 900% since announcing the ETH strategy.
Should you buy it?
I could make the case for doing so but, for all the reasons I laid out yesterday during a chat with my friend and colleague, Scott “the Cow Guy” Shellady, probably won’t any time soon. (Watch)
Don’t let me stop you though.
If you fancy a speculative flyer, this is probably as good as any!
MyPOV: Thiel doesn’t chase headlines — he chases upside and has a good nose for sniffing it out ahead of time. When the smart money pivots from “proof of work” to “proof of stake,” pay attention.
Trade idea: ETH-adjacent equities are starting to catch a tailwind. Watch for volume follow-through. Bitmine ($BMNR), SharpLink ($SBET), and Bit Digital ($BTBT) are all in motion as I type.
5 – US electric grid so antiquated it makes dial-up internet look good
GE Vernova powers half the country and just pumped $80M into Pennsylvania like it’s the only adult in the room. (Read)
And honestly?
It might be.
America’s grid is a Frankenstein patchwork—held together with duct tape, denial, and 1970s engineering.
I am hard pressed to think of a more compelling opportunity.
There's a full-blown energy arms race underway that we’ve talked about many times over—AI, EVs, chips, data centers, renewables.
All of it needs one thing… reliable power.
Today!
The International Energy Agency projects that the U.S. economy will consume more electricity in 2030 for processing data than for manufacturing all energy-intensive goods combined, including aluminum, steel, cement and chemicals... because of AI processing demand.
I agree.
The problem I have is that GE Vernova is super expensive at $560.62 yet has a 0.09% yield. So, the bet is clearly about appreciation and an American energy revival but with very little compensation for the risk investors take as owners. 🤔
Trade Idea: $GEV is building the grid of the future at a time when Wall Street’s still asleep at the switch. But what that's “worth” is another question entirely.
Bottom Line
One of the great challenges when it comes to investing is to know enough about a subject to think you’re right, but not enough to know you’re wrong.
You got this – I promise!
As always, let’s MAKE it a great day.
Keith 😀
