The narrative around Nvidia has fractured into two distinct storylines, and neither is offering much comfort to shareholders right now. On one side sits the chipmaker’s long-awaited — but so far hollow — reopening of the Chinese market. On the other, a growing unease over its transformation into the banking arm of the AI industry, with credit markets flashing warning signals that haven’t been seen before.
The stock closed at €170.14, down 1.79% on the day and 8.61% over the past week. That puts it 14.45% below its 52-week high of €202.50 and 5.31% beneath its 50-day moving average of €179.68. The relative strength index of 40.9 points to fading momentum, while the €139.78 year-low serves as a reminder of just how far this rally has already corrected.
The China License That Isn’t Moving Product
Washington gave Nvidia the green light to ship H200 processors to China back in December 2025, with the Bureau of Industry and Security finalizing the export framework in January 2026. A Trump administration official confirmed that initial deliveries have reached Chinese customers. But here’s the catch: the volume is “trivial,” in the official’s own words. No buyer names were disclosed, and the number of shipments against existing H200 licenses remains very small.
The complication runs deeper than just reluctant buyers. One day after the Commerce Department cleared the exports, President Trump slapped a 25% tariff on those same chips under a national security order based on a nine-month Section 232 investigation. Nvidia can legally sell H200s into China, but it pays the tariff because a mandatory testing route through the US remains in place.
Beijing isn’t helping either. Reports indicate the Chinese government has told technology firms to approve H200 purchases only in exceptional cases, such as university research. Nvidia may have won the lobbying battle in Washington, but it now faces a fresh wall of resistance in Beijing.
The US Commerce Department has authorized roughly ten Chinese companies for H200 purchases — including Alibaba, Tencent, and ByteDance — with a cap of 75,000 units per customer. A formal buyer list exists, but actual deliveries haven’t scaled. The bull case rests on optionality: the legal pathway is open again, reversing the period when Nvidia’s most advanced chips were completely cut off from a market CEO Jensen Huang has repeatedly called strategically important. If Beijing relaxes its procurement stance or the diplomatic climate improves, the addressable order book could activate quickly.
The bear case argues this license amounts to permission to sell into a market that remains economically unattractive. A 25% tariff combined with Beijing’s restrictive approval process could keep volumes negligible. Chinese customers may continue favoring domestic alternatives — a competitive risk Huang himself has flagged. The stock’s 5.31% discount to its 50-day average and fading RSI support the view that this channel may remain effectively sealed.
The $750 Billion Credit Question
While the China story plays out in slow motion, a more immediate concern has emerged from Nvidia’s balance sheet. The company is reportedly negotiating financing commitments and guarantees exceeding $750 billion. That includes a $250 billion backstop for an OpenAI data center in Ohio and a potential $500 billion partnership with the SK Group.
Should investors sell immediately? Or is it worth buying Nvidia?
These deals are designed to lock in long-term demand for Nvidia’s chips. Critics call it “circular financing” — Nvidia provides the capital its customers need to buy Nvidia’s products. On July 27, 2026, credit markets registered their concern in dramatic fashion: Nvidia’s five-year credit default swaps hit a record high of 82 basis points, marking the largest single-day jump in the company’s credit risk since late 2025.
The scale of these guarantees relative to Nvidia’s own balance sheet is stark. The company’s total assets stand at roughly $259.5 billion — well below the $750 billion in guarantees under discussion. That creates an off-balance-sheet risk that could prove severe if a major partner like OpenAI falters.
Legal pressure adds another dimension. On July 24, 2026, authorities in Taiwan arrested a senior Nvidia manager on suspicion of involvement in smuggling AI servers to China. The US Commerce Department is simultaneously investigating whether export-controlled chips reached Chinese buyers through prohibited channels. Tighter export rules or significant penalties could stall Nvidia’s primary growth engine.
Two Scenarios, One Stock
The bull case for Nvidia rests on the sheer scale of the opportunity. The OpenAI data center in Ohio is projected to be the largest ever built at 10 gigawatts. Supporters see the credit guarantees as a smart strategy to secure multi-year orders, including an additional $350 billion in chip purchases tied to the OpenAI deal. Huang has outlined a $50 trillion opportunity in “physical AI” and robotics, suggesting the current data center boom is just the first phase of a much larger cycle. Analysts maintain a consensus price target of €266.25, implying roughly 54% upside from current levels.
The bear case warns of systemic risk. If AI investments by Nvidia’s customers fail to generate returns, the company could face cascading credit losses. The Taiwan arrest and Commerce Department probe threaten to compound the uncertainty. Technically, the stock sits 14.45% below its 52-week high and below its 50-day average, with the 200-day moving average at €166.26 serving as the last line of defense for the long-term uptrend.
What Comes Next
For now, the China channel remains a non-factor in Nvidia’s financials. As long as US officials describe shipment volumes as “trivial,” this reopening won’t move the needle. The near-term direction depends more on the core data center business and the Blackwell cycle.
The credit story is the wildcard. If CDS spreads continue widening — toward Oracle’s 215 basis points, for example — the stock could face additional pressure. The next concrete test comes with the fiscal second-quarter 2027 earnings report in August 2026. Investors will expect official confirmation of the financing arrangements and clarity on whether the revenue consensus of $91.79 billion is achievable without further credit expansion.
Can Nvidia demonstrate that its revenue rests on liquid cash flows rather than contingent guarantees? If so, a recovery toward the €266.25 analyst target is plausible. If rising credit losses or new legal complications from the Taiwan affair emerge, the €139.78 year-low could come back into play.
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