NVIDIA shares fell 5% as investors weighed reports of a $250 billion financing guarantee for OpenAI's data-center buildout.
NVIDIA shares fell 5% on Monday morning to $197, leading a broad pullback across AI-hardware names. The decline was triggered by a report from The Wall Street Journal indicating that NVIDIA may guarantee up to $250 billion in financing for OpenAI's data-center buildout. This move has raised concerns regarding 'circular financing,' where the seller effectively funds the buyer who then purchases the company's products. Advanced Micro Devices (AMD) shares dropped 8% to $479, while Dell Technologies fell 4% as investors reconsidered the scale of AI capital expenditure. Despite the selloff, the fundamental bull case remains intact, with NVIDIA guiding $91 billion in Q2 revenue and AMD's data center revenue growing 57% year-over-year. Investors are now watching for confirmation on the financing deal and upcoming earnings reports to determine if the demand for AI infrastructure is organic or heavily dependent on vendor-led financing.