Nvidia's Rally Faces Its Sternest Test: Can It Outrun the Circular-Financing Question?
Published on 08/05/2026 at 03:33 | Redaktion boerse-global.de
The whiplash in Nvidia's share price over the past month has turned the chipmaker into something it never asked to be: a barometer for the entire artificial-intelligence investment cycle. After one of the sector's most brutal sell-offs in late July — which wiped more than a trillion dollars in market value from chip stocks collectively — the equity has clawed its way back with surprising speed. At 182.90 euros, the stock sits 1.91 percent higher on the day and 5.59 percent up over seven trading sessions. But the recovery masks a deeper tension that is about to come to a head.
Demand That Defies Gravity
The immediate catalyst for the rebound is straightforward: supply simply cannot keep pace with appetite for Nvidia's processors. Dan Ives, the widely followed tech analyst, has hammered this point home recently. The imbalance acts as a cushion — even if several major customers were to trim their orders, the backlog would remain robust for the foreseeable future.
That thesis received a powerful endorsement this week from an unexpected corner. During SpaceX's earnings call, Elon Musk described Nvidia's upcoming Vera Rubin platform as the "best architecture" he has encountered, adding that his company intends to lock in substantial compute capacity by year-end. When a company of SpaceX's stature is scrambling for allocation, it underscores that Nvidia's hardware has become less a commodity and more a bottleneck for the entire AI infrastructure build-out.
The demand picture is further reinforced by the hyperscalers. Microsoft and Amazon both posted strong cloud results and reaffirmed their AI budgets, with Amazon raising its investment forecast and downplaying any rivalry between its in-house silicon and Nvidia's processors. Oracle and Meta, meanwhile, are increasingly entering the compute-leasing business themselves — a development that keeps the order pipeline full even as the customer base shifts shape.
Should investors sell immediately? Or is it worth buying Nvidia?
The Circular-Financing Conundrum
Here is where the narrative gets uncomfortable. Michael Burry and other skeptics have spent months flagging a growing web of "circular financing" arrangements — patterns that historically preceded market corrections. The concern centers on reports that Nvidia is in discussions to help secure financing for OpenAI, enabling the ChatGPT developer to lease compute capacity. Several major AI deals are now under close scrutiny for precisely this dynamic: Nvidia, in effect, underwriting its own revenue growth.
The company's free cash flow remains exceptionally strong, but many customers are tethered to highly leveraged financing vehicles and off-balance-sheet commitments. This is a risk the market has not yet priced in, according to the skeptics' view. The question is whether it ever will — or whether the sheer force of demand makes the concern academic.
A Stock That Moves on Headlines
What makes Nvidia unusual now is not that it recovers from sell-offs, but how violently it swings on individual statements from hyperscalers about their capital expenditure plans. The annualized 30-day volatility stands at 37.91 percent — hardly the profile of a steady mega-cap compounder. This is a high-beta bet on whether Microsoft, Amazon, Google and Meta keep opening their wallets for GPUs.
The technical picture offers some reassurance. Nvidia trades 2.32 percent above its 50-day moving average of 178.76 euros and a more comfortable 9.80 percent above the 200-day average of 166.58 euros. The medium-term uptrend remains intact, even if the short-term chart looks tattered. The relative strength index sits at 55.3 — neutral territory, with room to move in either direction depending on the next headline out of hyperscaler headquarters or Washington. A separate reading puts the RSI at 55.9, still firmly in neutral ground. The stock remains about 9 percent shy of its record high of 202.50 euros.
The China Question Refuses to Go Away
Overhanging the investment debate is a second, unresolved issue: Nvidia's access to the Chinese market. The past year has seen the policy pendulum swing between prohibition and partial approval. In December 2025, President Trump announced that Nvidia could sell H200 chips to China. On January 13, 2026, the US Commerce Department formalized that announcement into a rule — with conditions that experts promptly called contradictory.
Actual demand remains murky. Chinese firms appear to be obtaining Nvidia hardware through indirect channels rather than direct purchases. A case in point: the Chinese AI startup Moonshot reportedly runs its Kimi models partly on roughly 20,000 Nvidia Hopper chips that arrived via a compute-capacity arrangement with Alibaba. This kind of grey-market access means China remains a headline risk rather than a reliable revenue source. Separately, reports indicate only a minority of license applications for H200 shipments to China are being approved.
Regulatory Clouds and Insider Caution
The financing question is not the only legal shadow. Both the Department of Justice and the Federal Trade Commission are investigating Nvidia, while export restrictions continue to constrain the China business. Adding to the caution signal: company insiders have sold substantial amounts of stock over recent months — a pattern that historically gives retail investors pause.
Nvidia at a turning point? This analysis reveals what investors need to know now.
The Verdict: Bulls by a Nose
On balance, the optimists' arguments currently carry more weight — but the path is narrowing. The scale of the Vera Rubin transition and the seemingly insatiable demand from hyperscalers point to sustained dominance. The circular-financing deals and antitrust proceedings are genuine tail risks, yet the acute chip shortage is the more pressing reality for the market right now. As long as Nvidia remains the sole provider of the "best architecture" for the AI era, that weighs heavier than the noise around complex financing structures.
The market capitalization of roughly 4.22 trillion euros and an average analyst price target of 262.72 euros — implying theoretical upside of about 43.6 percent — suggest investors continue to bet on the long arc of AI infrastructure build-out rather than an imminent slowdown. But the past month has demonstrated how quickly that narrative can wobble when a single earnings call or a single Washington decision lands unexpectedly.
The real test arrives with the quarterly report at the end of August. Only then will it become clear whether last week's rally was more than a brief flicker — or whether the circular-financing concerns finally gain the upper hand. For a stock that has become the market's chosen gauge for AI sentiment, the stakes could hardly be higher.
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