Nvidia Looks Cheap. Here's 1 Reason I'd Still Be Cautious.

NVDA trades at a P/E of 27 after 106% quarterly revenue growth, but a Motley Fool analysis flags a concentration risk that could undercut the bull case: 70% of NVDA's accounts receivable comes from just five customers.

The bigger concern is circular financing. NVDA provides capital, credit support, and purchasing commitments to major clients including CRWV, OpenAI, and Anthropic. In effect, NVDA helps fund the customers that then buy its chips.

The article draws a direct parallel to the dot-com boom, when similar vendor-financing arrangements preceded massive write-offs at Cisco and Lucent. CSCO's history is the named cautionary example here.

Interpretation: a 27 P/E looks undemanding against 106% growth, but the multiple only holds if revenue is organic rather than propped up by NVDA's own balance sheet. If a small group of buyers accounts for most receivables, a payment problem at any one of them hits NVDA disproportionately. The article also ties the risk to rising interest rates, which would pressure customers who depend on financing to keep buying.

Note that AMZN does not feature in the article's customer-financing concerns; the risk centers on CRWV, OpenAI, and Anthropic.