Nvidia drops nearly 5%, leading chip stocks lower amid renewed worries of circular financing - Yahoo Finance

What the report says

Yahoo Finance reported that Nvidia shares fell nearly 5% on Monday, July 27, 2026, dragging down a broader group of semiconductor stocks as investors renewed concerns about AI-related financing structures. The decline helped Apple move ahead of Nvidia as the world’s most valuable publicly traded company. AMD dropped more than 5%, while memory-chip companies also weakened, including Micron, down more than 2%, and SK Hynix, down more than 7%.

According to the report, pressure on Nvidia followed reports that the chipmaker was discussing a possible backstop for $250 billion in funding tied to OpenAI leasing computing capacity for a U.S. data center project. Bloomberg described the potential guarantee as among Nvidia’s largest such commitments. Yahoo Finance said the news revived worries about “circular” financing, where a supplier also provides major financial support to customers that buy its products.

The article also noted Nvidia’s Friday announcement of a strategic collaboration with SK Group, SK Hynix’s parent company, involving a more than $500 billion initiative around AI factories and next-generation memory. Separately, concerns over China’s progress in AI and chipmaking weighed on sentiment after The Information reported that a Chinese state-backed firm had begun mass-producing an important piece of chipmaking equipment, contributing to a sell-off in ASML.

The broader issue for investors is whether heavy AI infrastructure spending will produce adequate returns. Yahoo Finance noted that Alphabet shares recently fell after the company raised its capital spending outlook, while markets are awaiting results from Microsoft, Amazon and Meta for signs of further AI-related investment or any slowdown that could affect chip demand.