Monthly rollup | September 2025
- Oct 1
- 12 min read
Updated: 3 days ago
Stocks Mentioned Super Micro Computer (SMCI), CoreWeave (CRWV), Nvidia (NVDA), Bitcoin mining ETF (WGMI), Bitcoin ETF (IBIT), MicroStrategy (MSTR), Coreweave (CRWV), Intel Corp (INTC), Oracle (ORCL), Opendoor Technologies (OPEN) Okloc Inc. (OKLO)
Highlights
September 01, 2025
Quarterly Nvidia Update
Part I: Off-balance sheet obligations
In their latest quarterly, Nvidia has made a subtle but significant change to their disclosure on off-balance sheet obligations.
Until Q1, the company used to breakdown off-BS obligations into two categories:
(1) Inventory purchase and long-term supply and capacity obligations
(2) Non-inventory purchase obligations including multi-year cloud service agreements
In the prior quarter [Q1], category (1) accounted for $29.8 billion while category (2) accounted for $13.7 billion, including $10.6 billion in cloud related obligations.
Nvidia records inventory impairments and cash paid to settle purchase obligations directly to COGS while expensing cloud spending under R&D. Dropping the disclosure leaves investors guessing about the apportionment.
Another concern: the remaining obligations for fiscal year 2026 (which ends in Jan 2026).
FY 2026 off-BS liabilities at:
Year end FY 2025 - $35.7 billion
End of Q1 FY 2026 (excluding Q1 FY 2026) - $31.4 billion
End of Q2 FY 2026 (excluding H1 2026) - $30.9 billion
Projected liabilities decreased by $4.3 billion in the first quarter and a mere $500 million in the second.
Perhaps this explains why the company resorted to the change in disclosure policy - one or more categories must have seen a marked increase, and dropping disclosure was the simplest way to avoid answering tough questions. Like why are multi-year cloud service agreements classified as an off-balance sheet liability rather than as a financial/ operating lease?
Part II: Revenue growth and the balance sheet impact
In 8 of the last 10 quarters, increases in accounts receivable and off-balance sheet obligations have exceeded increase in revenue. In other words, the revenue beats which so enamored Wall Street came at the expense of the balance sheet.
As of Q2, receivables and off-BS obligations sum up to $73.6 billion.
Total equity - $100.1 billion.
Impairment charges and write-offs can quickly erode the equity base.
To make matters worse, the company has authorized $74.7 billion worth of share buybacks.
The company's financial position is going to be severely strained just as growth tapers off and investors start taking a hard look at the cash flow statement and balance sheet.
Incidentally, Nvidia customer Super Micro Computer (SMCI) has once again sounded the alarm on deficiencies in internal controls.
When this unravels, it will unravel fast.
September 04, 2025
Gold is having its Coinbase moment
I wrote this tweet two months after the October 2023 bottom, after the market rallied heavily in Nov 2023 on news of the Fed pivot.
Imagine buying a mega breakout TWO MONTHS later.
"It has already gone up so much."
"How high can it go? Nobody cares about gold."
Almost TWO YEARS later, there is still no end in sight to this rally.
Never underestimate powerful trends. They can last a lot longer than anyone can imagine.
September 09, 2025
Bet on gold
The Fed only controls the short end of the curve. Lower rates = higher inflation = higher yields on long duration bonds.
Those betting on bonds re-entering a bull market are not just pricing in rate cuts and ZIRP. They are pricing in a return of Operation Twist and central bankers worldwide imitating Mario Draghi and doing "whatever it takes" to end the bull market in gold so fiat gets a reprieve.
It was tried before with the London Gold Pool, and failed abysmally. This time around, even central bankers are betting on gold - foreign central banks now own more gold than they do US treasuries.
Gold has regained its reserve currency status while the dollar goes the way of the British Pound.
Bonds won't re-enter a bull market. Bet on gold instead.
CoreWeave
Nvidia-backed CoreWeave (CRWV) loses 24 cents on every dollar in sales. The company has a working capital deficit of $3.6 billion plus long-term debt of $10.6 billion. Its only asset is Nvidia (NVDA) GPUs which depreciate rapidly. The company survives on raising debt to fuel its losses.
Yet we are supposed to believe this terribly managed business has the financial chops to become an AI venture capitalist?
Reading through the press release provides the answer:
"CoreWeave Ventures supports founders with the resources to create impact from day one, ranging from direct capital investment and compute-for-equity transactions..."
CoreWeave isn't able to rent out GPUs so the solution is to provide compute in exchange for equity stakes in start-ups at make-believe valuations.
As long as the debt market holds up, the company can keep raising and burning cash while feeding hopium to AI bulls.
When the music stops, the stock goes to zero, but early investors like Magnetar will cash out all the way down.
De-dollarization?
"The market for Panda bonds, a Chinese yuan-denominated bond from a non-Chinese issuer, saw record growth in 2023 and 2024, driven by geopolitical tensions, according to Deutsche Bank."
For those unfamiliar, Eurodollars are a Russian invention. Russian demand for holding USD deposits in Europe led to the creation of that market.
Now Russia is planning to do the same with the CNY. This comes on the heels of Kenya seeking to switch from USD debt to CNY/RMB debt.
Geopolitical trends in motion tend to stay in motion. This only accelerates from here.
September 15, 2025
The economy continues to weaken.
The stock market continues to soar.
The Fed will cut rates and worsen the stagflation.
September 22, 2025
How to pick small cap gold stocks
With gold making the mainstream news (finally!), this is a good time to start looking into the gold exploration space.
In this episode of Gold Rush, I provide an overview of the sector, explain the Lassonde Curve, and talk about the numerous pitfalls and landmines involved in investing in this space.
Thanks to Jason and Sam Gatlin for hosting me.
The bitcoin bugs are having a meltdown
Bitcoin is marketed as a decentralized, permission-less, and censorship resistant network.
Decentralization is long dead. 11 mining pools control the network; 6 pools control the majority. They get to decide which transactions make it on-chain, and it is only a matter of time before they start blacklisting sanctioned addresses.
The battle is now between the majority, who want to make it more permission-less and censorship resistant, and the minority, who want to maintain the status quo.
Background
In late 2021, the bitcoin network underwent a major update called Taproot. This benefited users of multi-sig wallets and opened the doors for inscriptions. Think NFTs on bitcoin.
Thanks to this network update, demand for on-chain transactions exploded, sending transaction fees higher. The bitcoin miners Bitcoin mining ETF (WGMI) printed money and used the profits to re-invest in more equipment. This was a great time to be invested in the bitcoin mining ecosystem.
Then came the 2024 bitcoin halving, the slow demise of NFTs, passive holdings via ETFs like Bitcoin ETF (IBIT) and bitcoin treasury companies MicroStrategy (MSTR) Metaplanet, and mining became unprofitable. Bitcoin miners shifted to AI and HPC to stay afloat.
The quirk/ flaw in bitcoin is that if the miners stop running, the network dies. While gold will continue to rise in value even if all miners ceased operations forever, bitcoin will be worth precisely zero if all miners ceased operations forever.
Without miners, the bitcoin "network" is merely the digital equivalent of a dusty old ledger book of a failed bank.
Bitcoin Core developers like Adam Back seek to prevent the miner exodus to more profitable AI/HPC. They want to revive interest in actual usage of the bitcoin network for transactions. This pits them in battle against the HODL sub-cult(ure) who equate mining fees with seigniorage (currency debasement) and another cult of neo-luddites headed by Luke Dash Jr. who simply resist change.
The HODL cult's argument makes economic sense - if more people use bitcoin, transaction fees will rise, making it difficult to pay for a cup of coffee using bitcoin. The HODLers have been living on the bitcoin standard for a long time and want to keep it a low fee network for their benefit.
The neo-luddites are a different matter.
In every bitcoin transaction, the user can embed up to 80 bytes of data in one piece [OP_RETURN]. The transaction can carry multiple such pieces.
Bitcoin Core developers seek to remove this arbitrary 80 byte limit, and the neo-luddites are having a meltdown. Removing the limit makes the network more usable.
As the longest running blockchain, being able to store more data on-chain will draw in new users and help the network stay competitive.
Note that removing the 80 byte limit doesn't mean bitcoin can be used for file storage and retrieval. You won't find cat videos stored on the bitcoin network.
The theoretical maximum "weight" of every transaction is only 100 kilobytes, and every bitcoin block is limited to 4 MB.
The code change doesn't affect users who don't embed data, but it helps those who do. Naturally, such "heavy" transactions will carry a higher fee to induce miners to include it in their block. No different from loading a truck, where you pay for space and weight.
The neo-luddites say that they will reject transaction broadcasts carrying data and not include it in the mempool. The mempool, using the truck analogy, is a giant warehouse carrying all the transactions, and the trucks are free to carry only those transactions which maximize their earnings per load.
By rejecting the more profitable loads, these warehouse bosses (called nodes in bitcoin), seek to keep the trucks light.
The reason? Because heavier bitcoin blocks will require more storage space on their hard drive.
How does this matter in the world of AWS where storing petabytes of data is a cinch? We are talking of 4 MB bitcoin blocks, to put that in context.
The neo-luddites say that they want to store the entire bitcoin blockchain (~500 GB) on an old laptop, that doing so improves the network's censorship resistance.
In other words, they want to censor bitcoin transactions to keep the bitcoin network censorship resistant (!).
This argument has the support of ~20% of node operators. Currently, they can only influence the mempool, not the mined bitcoin blocks. Once the 80 byte limit is removed, it remains to be seen whether they will accept mined blocks which don't adhere to their ideology or reject them.
If any miner follows their ideals, they are free to select only those transactions that don't have a >80 byte data load to include in their mined blocks.
The problem arises if this sub-cult starts to reject valid bitcoin blocks which don't adhere to their ideology, causing a chain split.
In that event, Bitcoin Core and their followers will win out, but this vocal and influential minority will be upset and start selling down their HODL stash, pressuring the bitcoin price.
Can't they all just get along and sing Kumbaya? The bitcoin cult is after all a minority within the broader crypto cult, and this in-fighting serves no one.
Nope, they can't.
While united in their hatred of all other crypto, the "Core" and "Knots" camps are as different from each other as the Mormon Church and the Church of Scientology.
The battle lines are drawn and the Twitter flame wars are hotting up.
The minority camp (Satoshi worshipping whitepaper thumpers running Knots) believes in the superiority of their ideals and don't want any change, while the majority camp (rationalists who believe in code evolution) wants the bitcoin ecosystem, including miners, to grow, and believes that slightly tweaking the code is the right step.
I don't own any bitcoin and won't be financially affected however this plays out, but I am rooting for the Core community on this one.
If bitcoin does not change with the times, it will become a collectible digital relic.
Dotcom redux?
A cautionary tale for rational investors, while the market cheers Nvidia funding its customers.
Lucent Technologies was a go-go stock during the dotcom bubble. In 1998, Lucent and WinStar Communications signed a $2 billion deal. Lucent provided the financing, provided the products and expertise, and reported sales. WinStar was saddled with debt and unnecessary equipment.
Since Lucent controlled the purse strings, the company also managed to strong arm WinStar into 'purchasing' $125 million worth of software.
When the bubble burst, WinStar went bankrupt and Lucent got into hot water with the SEC for inflating sales figures.
This time will be no different, except in the Golden Age of Fraud, the SEC will turn a blind eye to GAAP violations.
The NVDA CoreWeave fraud just hit a new milestone
On September 9, Coreweave (CRWV) signed a $6.3 billion deal with Nvidia. Per the deal terms, Nvidia is obligated to purchase any spare capacity that CW is unable to sell to end customers.
This seems to be a clever way to skirt consignment accounting rules.
Under consignment accounting, the consignor provides inventory to the consignee. When a customer actually picks up the product, the consignor books the revenue, while the consignee gets a commission. The inventory stays on the consignor's books, and any unsold inventory reverts back to the consignor.
Nvidia provides GPUs to CoreWeave but calls it a sale. The company then promises to buyback excess inventory while holding that inventory in customer premises. CoreWeave is guaranteed to make money whether or not there is any demand for these GPUs. Further complicating things, Nvidia also funds CW through equity infusions.
In a normal functioning market, the SEC will be all over this. Short sellers will be slamming this deal and pointing out the accounting implications.
In Trump's Golden Age of Fraud, nobody cares. Even SOX is toothless when executives know they can commit fraud and then play victim on the Tucker Carlson Show.
September 23, 2025
Top signals abound
The WH signals this is the top. IPOs signal this is the top. NVDA - OpenAI deal signals this is the top. Opendoor Technologies (OPEN) Okloc Inc. (OKLO) etc signal this is the top.
And people are still asking, "what is the catalyst for stocks to go down?
September 24, 2025
Fact checking the Wall Street Journal
The Wall Street Journal says NVDA has too much cash. Let's fact check this statement.
From Q2 financials:
Cash, cash equivalents and marketable securities = $56.8 billion
Working capital = $78 billion
Free cash flow = ~$14-15 billion
In 2 of the last 3 quarters, accounts receivable has been rising faster than revenue while inventory continues to pile up. The company's working capital needs keep growing and won't be a source of cash.
The company is spending:
Share buybacks = $74.7 billion
Intel Corp (INTC) deal = $5 billion
OpenAI deal = $10 billion (assuming 1 GW)
Total = $89.7 billion
The company also has $30.9 billion in off-balance sheet liabilities due in the next two quarters. The latest CRWV deal is in addition to this.
The current cash holdings, plus next two quarters worth of free cash flow, will barely meet the known commitments, let alone fund higher inventory costs and settlement of off-BS liabilities.
As for the full $100 bn OpenAI deal, forget about it.
How did the WSJ arrive at the "too much money" conclusion? By projecting FCF to rise from $15 bn in the latest quarter to $42 bn a few years out.
In other words, using optimism and exponential extrapolation, the company might someday have too much cash. But such details don't matter when the aim is to sell the AI story.
September 25, 2025
"Stock prices have reached what looks like a permanently high plateau."
Treasury yields are higher since September 2024, even though the Fed has cut rates by 125 bps. YTD, the dollar index has lost 10%.
The double whammy of higher yields and a lower dollar is sinking foreign investors' appetite for US treasuries. Meanwhile, Trump's antics are antagonizing allies and accelerating the shift away from US assets.
If equities sink, the US will enter a Lost Decade much like Japan in the 1990s.
September 26, 2025
Hedge fund manager David Einhorn is sounding the alarm on AI capex
"While he expects AI will ultimately surpass today’s bullish forecasts, he questioned whether “spending a trillion dollars a year or 500 billion a year” will deliver good outcomes for the firms making those investments." - Bloomberg
Einhorn is referring to the Gartner hype cycle. The technology trigger was the launch of ChatGPT. The peak was the recent crazy moves in Oracle (ORCL) and NVDA.
The trough? We'll know once the next WorldCom and Global Crossing make their way through the bankruptcy process.
September 27, 2025
US Equities are a Strong Sell
So many accounts on X debating whether it's still irrational exuberance (1996) time and the bubble has a long way to run, or whether it is time to party like it's 1999.
Or whether the NVDA-CRWV-ORCL OpenAI hype marked the top like March 2000.
If you know this is a freaking bubble and when it bursts, stocks will go down 90%, does it matter when you exit?
During the 1987 subway (underground railway station) fire in London which claimed 31 lives, people could see the smoke and kept on going underground anyway.
Why?
Well, if the guy next to you isn't panicking and the subway employees aren't panicking, the fire mustn't be a big deal. Until there was an explosion, a full 15 mins after the station filled up with smoke, oblivious passengers just went about their business ignoring the signs.
They weren't thinking, "I might die, but if I miss the train I'll be late for dinner."
They simply didn't see the risks because there was no panic while a fire raged at an underground station with a single exit point.
And then, it was too late.
Bubbles are the same way. Nobody pays heed to risk until it is too late and everyone is crowding to the exit.
Zoom out. US equities are a Strong Sell. Don't wait to be the last one out.
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Good Trading!
Kashyap
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