Nvidia Passes Tough Test, but Financing Risk Persists

Dow Jones08-27 17:53

0953 GMT - Nvidia's results are reigniting the artificial-intelligence chip trade, but as financing gets more and more circular, tech giants could be on borrowed time, says Nic Puckrin, cross-asset analyst and founder of Coin Bureau. Sandisk, Micron and Hynix all look set to open around 5% higher, and Broadcom is also looking stronger premarket. For Puckrin, the biggest question is around Nvidia's $500 billion AI financing deal with asset managers. This might seem like a smart move while demand for AI chips is insatiable, he says, but if that falters, Nvidia and its lending partners will be stuck with collateral in the form of AI chips that no one wants to buy. Nvidia has kicked the can down the road. Next quarter, it will face the same questions.

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