Nvidia slips 4% as blockbuster AI spending spree triggers balance sheet jitters

Investors are hitting the brakes on Nvidia. The chipmaker's stock dropped 4% following a staggering weekend of mega-deal announcements that shifted Wall Street's focus from sky-high demand to balance-sheet realities, according to reporting detailed in Investing.com.

The weekend deal flow racked up over $750 billion in commitments and investments. Taken together, the sticker shock was enough to rattle investors and draw a pointed, three-word post on X from legendary short-seller Michael Burry: "Around and around we go."

The massive financial commitments driving market anxiety

The financial pledges that triggered the recent sell-off span several massive international initiatives:

• SK Group Alliance: Nvidia and South Korea's SK Group unveiled a long-term AI initiative. The arrangement locks in HBM4 memory supply with SK Hynix and tasks SK Telecom with building a massive 2-gigawatt data center powered by Nvidia's Vera Rubin chips, set to come online in 2027.
• Naver Stake: Nvidia agreed to acquire $1 billion in newly issued shares of South Korean internet giant Naver to co-build an AI data center. The news sent Naver shares surging over 10%.

Analyst divides: financial engineering or structural tailwind?

The divergence in analyst views reflects a growing tension that has dogged AI-infrastructure stocks for weeks: are these deals a warning sign of financial engineering, or a bullish indicator of an extended investment cycle?

Bernstein analysts threw cold water on the massive SK Group numbers, viewing them as a supply-chain necessity rather than fresh demand validation. We believe the announced amounts are more for memory and indicate the need for NVIDIA & Broadcom to secure memory supply, they wrote, warning that the headline figure may overstate the near-term revenue impact for Nvidia while remaining highly constructive for SK Hynix.

Conversely, BofA Securities analyst Vivek Arya reiterated his Buy rating and a $350 price target. Arya argues that OpenAI remains a titan of AI infrastructure consumption. In his view, access to financing and power extends the AI buildout well beyond what customer balance sheets alone could support, ultimately fueling a longer, stronger infrastructure spending cycle.

As market strategist Miskin recently noted to Reuters: The numbers in aggregate are great, but... any chink in the armor and the stocks are being sold off.

Nvidia had entered the session already on the back foot, having shed nearly 3.9% amid broader market jitters over heavy AI capital expenditures from tech giants like Alphabet and Tesla. Intraday volume hit nearly 30.7 million shares with several hours still left in the session, pointing to active institutional repositioning rather than a passive, low-volume drift.

Broader telecommunications moves from space

In parallel technology markets, Amazon.com Inc. has asked the US Federal Communications Commission for permission to launch a network of 5,000 satellites designed to provide mobile services directly to cell phones from space, intensifying competition with SpaceX in the satellite communications sector.

The proposed low-Earth orbit network would offer global coverage and connect to smartphones and other mobile devices to enable messaging, data, and emergency services in areas without cell tower coverage, according to a company news release cited by Investing.com. The request follows Amazon's announcement earlier this year of plans to acquire satellite company Globalstar Inc. For $11.6 billion, granting access to spectrum capable of transmitting data to phones.

Amazon has already established partnerships with traditional telecommunications companies, including Vodafone Group PLC and DirecTV, to enable them to offer satellite-based services to their customers, and plans to continue pursuing similar arrangements. Competitors are moving similarly: SpaceX's Starlink has a comparable partnership with T-Mobile US Inc., while AST SpaceMobile Inc. Has agreements with Verizon Communications Inc. And AT&T Inc.

Separately, Amazon is building Amazon Leo—a network intended to deliver broadband internet coverage to receivers on Earth, similar to SpaceX's Starlink terminals. The company expects to begin service by the end of the year despite encountering delays in launching its spacecraft, and has an agreement with Apple Inc. To provide satellite services for iPhones and Apple Watches, with plans to begin deploying its direct-to-device network in 2028.

What to watch next

The market will soon test whether Nvidia's weekend commitments represent a financial burden or a massive structural tailwind. Investors are tracking key upcoming dates:

• July 30: Federal Policy Decision. Macro conditions matter heavily for a stock with Nvidia's multiple, with markets currently pricing in a one-in-three chance of a rate hike.
• August 26: Q2 2027 Earnings. Consensus calls for an earnings per share of $2.08 on revenue of roughly $91.8 billion, with Wall Street watching to see if Nvidia's sprawling deal pipeline shows up in the numbers.