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After Nvidia reported its Q3 FY26 results, there was a view that its Days Sales Outstanding (DSO) and inventory levels were abnormal and potentially indicative of fraud. In my view, the reported figures are, in fact, consistent with basic financial common sense and the underlying industry structure. 1. Days Sales Outstanding (DSO) (1) Critics point out that Nvidia’s DSO increased from an average of 46 days in FY2020–2024 to 53 days in Q3 FY26 and claim this deterioration is a sign of financial irregularities or even fraud. (2) However, this view ignores the change in accounts receivable concentration: the share of receivables attributable to major customers rose from an average of 23.8% in FY2020–2024 to 65% in Q3 FY26. (3) It is entirely reasonable for DSO to rise as receivables become more concentrated in a handful of large customers. This reflects the bargaining power of key accounts—especially cloud service providers (CSPs), which have historically operated with longer payment terms. (4) Another flaw in the critics’ analysis is the peer group the view chose. It compared Nvidia’s DSO to companies whose primary customers are not CSPs. A more appropriate comparison set is suppliers whose main customers are the same CSPs—such as Arista, Celestica, and Vertiv—whose DSOs typically run above 60–70 days. Against that backdrop, Nvidia’s 53-day DSO looks entirely reasonable, not anomalous. 2. Inventory (1) Critics describe the 32% QoQ increase in Nvidia’s Q3 FY26 inventory as a “paradox,” and cite Q2 FY23 as a counterexample, claiming that inventory declined 18% QoQ when the H100 was launched. (2) There are two factual errors in this argument: – First, Q2 FY23 inventory did not decline; it increased by roughly 23% QoQ to USD 3.889 billion. – Second, the 32% increase in Q3 FY26 inventory is broadly in line with the ramp in upstream capacity: TSMC’s CoWoS average monthly output is estimated to have grown by roughly 25–30% QoQ to around 60kwpm in 3Q25. Within Nvidia’s Q3 FY26 inventory, the largest item was Work-in-Process (WIP), which represented 44.2% of total inventory and surged about 98% QoQ to USD 8.735 billion. This is best understood as reflecting the ramp and mass production of the new Blackwell B300 GPU starting in 3Q25. Far from being evidence of fraud, it shows that Nvidia had already been preparing for strong demand for the B300.