Nvidia falls as Mark Cuban warns on AI financing, while BofA keeps $350 target

Nvidia shares fell 2.86% as investor Mark Cuban warned that artificial intelligence infrastructure spending could make the market "crumble" if financing structures unravel, while Bank of America maintained its Buy rating and $350 price target ahead of the company's Aug. 26 earnings. Cuban said Nvidia is increasingly acting as both supplier and financier to the AI ecosystem through GPU purchase financing, revenue-sharing and minimum-revenue-guarantee arrangements. Analysts cited Nvidia's first-quarter fiscal 2026 investment exposure of $42.3 billion in private investments and $27 billion in conditional commitments, while Bank of America separately estimated roughly $70 billion in direct equity stakes across ecosystem partners, including $30 billion to OpenAI and up to $10 billion for Anthropic. Despite the financing debate and a broader selloff in chip stocks linked to rising oil prices and Treasury yields, BofA argued Nvidia remains undervalued at 16 times estimated 2027 earnings and expects second-quarter revenue of $94 billion to $95 billion, above the company's $91 billion forecast, with third-quarter revenue of $107 billion to $108 billion versus about $104 billion consensus. The bank said demand for next-generation Vera Rubin chips, tight GPU rental markets and Nvidia's pricing power should support an extended upgrade cycle and limit margin pressure from higher memory costs.

The information on this website is generated using AI and we cannot guarantee its accuracy. Please use it as reference information only.