Nvidia falls for 7 consecutive sessions: fears grow over its AI debts
WHAT HAPPENED
Nvidia fell 2.9% on Monday and has accumulated seven sessions of decline. Micron, AMD, Broadcom, and TSMC also retreated. There are concerns that Nvidia has committed over $540 billion to finance purchases of its own chips.
WHY IT MATTERS
The fear is that some sales depend on the money that Nvidia lends or guarantees to its customers. If those customers cannot pay, the risk returns to Nvidia. The insurance against default rose to 82 basis points, although it is still far from the alarm level of 200.
AND FOR YOUR PORTFOLIO
The decline may reduce the value of index funds and retirement plans that have a significant stake in Nvidia, even without directly owning its shares. Its results on August 26 will show whether sales justify the enthusiasm for artificial intelligence.
💬 TELL IT LIKE THIS
“The market fears that part of the AI boom is being financed with money lent by the same company that sells the chips.”