Nvidia's Stellar Quarter Hides Hidden Warning Signs

Nvidia's latest quarter was a stellar one, with revenue growth of 106% year-over-year and a gross margin of 75%. The company also guided investors to expect 70% revenue growth in its next fiscal year.

However, a closer look at Nvidia's balance sheet reveals some concerns. Total assets jumped by more than 50% over the past six months, with receivables growing from $38.5 billion in January to $63.1 billion at the end of July.

This growth is partly due to Nvidia offering financing terms to certain customers, which helps them lock in multi-year deals. However, it also raises questions about whether demand appears higher in the revenue numbers than it otherwise would.