Nvidia Shares Fall Amid Alarms Over Circular Financing Deals

Shares of Nvidia Corp. fell significantly in late July 2026, erasing hundreds of billions in market value and causing the company to lose its status as the world's most valuable company to Apple. The downturn follows reports that the chipmaker is pursuing over $750 billion in AI infrastructure deals and guarantees, sparking fears of circular financing. In this arrangement, a supplier provides capital or guarantees to customers who then use those funds to purchase the supplier's own products, potentially inflating demand and valuations.

Specific deals driving the volatility include a $500 billion partnership with South Korea's SK Group to build AI data centers and a $1 billion investment in Naver Corp. Additionally, Nvidia is in preliminary talks to provide a $250 billion lease guarantee and $350 billion in chip financing for OpenAI's use of a SoftBank-developed campus in Ohio. The company also entered a $5 billion partnership with Safe Superintelligence Inc.

CEO Jensen Huang dismissed circular financing concerns as ridiculous, though he acknowledged that the company is basically holding the planet together. Conversely, investors Mark Cuban and Michael Burry warned that these deals create systemic risks analogous to the dot-com bubble. Burry increased his short position on the stock, pointing to a record surge in Nvidia's five-year credit default swap spread as evidence of overextension. Further pressure on the stock came from U.S. export controls and Chinese import restrictions on H200 chips.