Nvidia slips 4% as blockbuster AI spending spree triggers balance sheet jitters
Investing.com -- Investors are hitting the brakes on Nvidia (NASDAQ: NVDA). The chipmaker’s stock dropped 4% on Monday after a staggering weekend of mega-deal announcements shifted Wall Street’s focus from sky-high demand to balance-sheet realities.
The weekend deal flow was breathtaking in its scope, racking up over $750 billion in commitments and investments. Taken together, the sticker shock was enough to rattle investors and draw a pointed, three-word post on X from legendary short-seller Michael Burry: "Around and around we go."
The massive financial commitments that triggered Monday’s sell-off include:
A $500B+ SK Group Alliance: Nvidia and South Korea’s SK Group unveiled a massive, long-term AI initiative. The deal locks in HBM4 memory supply with SK Hynix and tasks SK Telecom with building a massive 2-gigawatt data center—powered by Nvidia’s Vera Rubin chips—set to come online in 2027.
A $250B OpenAI Guarantee: According to the WSJ, Nvidia is in talks to provide roughly $250 billion in financing guarantees for OpenAI as part of a massive new data center project.
A $1B Naver Stake: Nvidia agreed to acquire $1 billion in newly issued shares of South Korean internet giant Naver to co-build an AI data center. The news sent Naver shares surging over 10% on Monday.
The divergence in analyst views reflects a growing tension that has dogged AI-infrastructure stocks for weeks: are these deals a warning sign of financial engineering, or a bullish indicator of an extended investment cycle?
The Cautious Take (Bernstein): Bernstein analysts threw cold water on the massive SK Group numbers, viewing them as a supply-chain necessity rather than fresh demand validation. "We believe the announced amounts are more for memory and indicate the need for NVIDIA & Broadcom to secure memory supply," they wrote. While the read is highly constructive for SK Hynix, Bernstein warns the $500B+ headline figure may overstate the near-term revenue impact for Nvidia.
The Bullish Defense (BofA Securities): Analyst Vivek Arya reiterated his Buy rating and a $350 price target. Arya argues that OpenAI remains a titan of AI infrastructure consumption. In his view, access to financing and power extends the AI buildout well beyond what customer balance sheets alone could support, ultimately fueling a longer, stronger infrastructure spending cycle.
As market strategist Miskin recently noted to Reuters: "The numbers in aggregate are great, but... any chink in the armor and the stocks are being sold off."
Nvidia entered Monday’s session already on the back foot. The stock shed nearly 3.9% last week amid broader market jitters over heavy AI capital expenditures from tech giants like Alphabet and Tesla.
NVDA now sits roughly 15% below its 52-week high of $236.54.
Intraday volume hit nearly 30.7 million shares with 5.6 hours still left in Monday’s session. Compared to a 155 million three-month daily average, this elevated midday pace points to active institutional repositioning rather than a passive, low-volume drift.
The market will soon test whether this weekend’s commitments are a financial burden or a massive structural tailwind. All eyes are now on two upcoming dates:
July 30 (Fed Policy Decision): Macro conditions matter heavily for a stock with Nvidia’s multiple. Markets are currently pricing in a one-in-three chance of a rate hike.
August 26 (Q2 2027 Earnings): The ultimate test. Consensus calls for an EPS of $2.08 on revenue of roughly $91.8 billion. With 33 upward versus just 3 downward EPS revisions over the last 90 days, Wall Street clearly expects Nvidia’s sprawling deal pipeline to show up in the numbers—even if Monday’s price action proves that the market needs a little convincing first.