NVIDIA Earnings Put the AI Boom to the Test — Woo Warns of “Catastrophe”

The current AI investment landscape is a precarious bubble driven by "fear of missing out" rather than sound economic logic, threatening a catastrophic correction for U.S. equity markets. David Woo argues that the massive valuations of companies like Anthropic rely on a flawed "winner-take-all" assumption, whereas the reality is rapidly shifting toward commoditization and cannibalization. Major tech firms are allegedly inflating earnings through accounting gimmicks, such as Microsoft extending data center depreciation lifetimes from 15 to 25 years despite the short half-life of AI chips. Furthermore, reported earnings growth is artificially bolstered by revaluing investment holdings and tariff rebates, masking a potential 30% to 60% decline in underlying performance. This "hype machine," supported by political alignment and circular corporate guarantees between players like NVIDIA and OpenAI, creates a dangerous environment where market prices have decoupled from fundamental fiscal reality.