Why are investors and analysts so worried about Nvidia in the month that CEO Jesen Huang has signed deals worth $500 billion-plus
With a market valuation of nearly $5 trillion, chipmaker Nvidia sits at the centre of global trade. The company that sells GPUs to hyperscalers like Microsoft and Amazon, who then rent the Nvidia-powered compute to startups like OpenAI and Anthropic. Nvidia has also made direct investments in many of those startups giving it exposure to nearly every layer of the AI ecosystem. Put simply, Nvidia profits from almost every stage of AI infrastructure spending. However, a recent report by Business Insider suggests that both investors and analysts are worried as Nvidia has signed deals worth $500 billion. In just a span of few days, Nvidia CEO Jensen Huang announced flurry of partnerships and investments:* $500 billion partnership with SK Group (July 24)* $1 billion investment in Naver to build South Korea’s sovereign AI infrastructure (July 24)* $250 billion financing backstop for OpenAI’s Ohio data center (July 26)* Up to $350 billion financing for OpenAI chip purchases (July 26)* Deepened partnership with Safe Superintelligence, founded by Ilya Sutskever (July 27)
Why analysts are nervous
As reported by BI, despite these blockbuster deals, investors worry the AI ecosystem is becoming too circular — with Nvidia financing the very companies that buy its chips. This raises questions about whether spending reflects genuine demand or simply reinforces itself. If one part of the trade falters, the interconnected structure could drag down the rest. Right on cue, markets reacted: Nvidia shares fell 5% on Monday, surrendering its crown as the world’s most valuable company to Apple. Meanwhile, credit-default swap prices spiked, showing investors are increasingly skittish about Nvidia’s obligations.
Wall Street’s split view
Bernstein analyst Stacy Rasgon reaffirmed a buy rating and $315 price target, suggesting 60% upside. At Monday’s close, 78 of 81 analysts tracked by Bloomberg still rated Nvidia a buy. Yet the timing is critical: hyperscalers Microsoft, Meta, and Amazon are set to report earnings this week, with investors closely watching their capex guidance. Heavy spending has rattled markets before — Alphabet’s forecast last week triggered a sell-off.
Nvidia CEO Jensen Huang doesn’t believe in work-life balance
Recently, Nvidia CEO has openly admitted that he’s on the clock from the second he opens his eyes to the moment he falls asleep, seven days a week, holidays included. There’s no switch-off button in his day, and he doesn’t seem to be looking for one. And he has admitted that functions well for him. He said that his work life balance is really great. Speaking to Stripe CEO Patrick Collison in an interview in 2024, Huang emphasised that it isn’t just the hours, it’s how deeply work has taken over his headspace even during downtime. He further added that when he’s technically “off,” his mind is still running the business in the background.
