The question hanging over Nvidia isn’t whether the chips will sell — it’s whether the company is quietly buying its own demand. With the next earnings report scheduled for August 26, investors are wrestling with a $250 billion question that cuts to the heart of how the AI boom is being financed.
At the center of the controversy sits a reported credit backstop Nvidia is negotiating for OpenAI, designed to secure the construction of data centers with ten gigawatts of capacity. Critics describe the arrangement as “circular financing” — Nvidia providing financial guarantees to its own customers, thereby manufacturing a portion of the demand it later books as growth. Prominent investor Michael Burry counts himself among the skeptics, warning of hidden balance-sheet risks, while supporters frame the deal as a vote of confidence in the long-term economics of AI infrastructure.
The stakes are considerable for a company valued at 4,214.72 billion euros. Every additional guarantee obligation carries weight, which is why the debate refuses to fade. Whether this represents a maturing ecosystem or a warning sign of peak demand remains an open question — both interpretations have their adherents.
Operational Demand Shows No Signs of Fatigue
Setting aside the financing controversy, the underlying business continues to hum. TrendForce has lifted its 2026 forecast for AI server shipments to growth of nearly 31 percent year-over-year. The nine largest cloud providers globally are expected to boost capital expenditures by roughly 90 percent in 2026, with combined spending projected to exceed 886.7 billion dollars.
Nvidia is aligning its product roadmap accordingly. The new Blackwell Ultra B300 GPU targets reasoning models and trillion-parameter inference, pushing the company beyond its first Blackwell cycle. Management is positioning the hardware as permanent infrastructure for AI agents rather than a cyclical product that rises and falls with each demand wave.
The latest trading session reflected renewed optimism, with shares climbing 3.69 percent to 180.80 euros. That still leaves the stock 10.72 percent below its 52-week high of 202.50 euros, underscoring that the pullback from May’s peaks hasn’t been fully recovered. Wall Street’s consensus price target of 262.89 euros implies upside of 45.4 percent — an expectation that hinges on the upcoming earnings report providing clarity on both the OpenAI financing arrangement and the durability of hyperscaler spending plans.
A Sector Divided
Nvidia’s situation is playing out against a broader backdrop of divergence across the AI landscape. Amazon recently crossed the three-trillion-dollar market capitalization threshold for the first time, joining an exclusive club previously limited to Nvidia, Alphabet, Microsoft, and Apple. The milestone followed quarterly results showing the strongest cloud growth in over four years, with AWS expanding at a pace not seen since 2021. The company simultaneously raised its investment guidance, and that combination of accelerating growth and rising spending won over investors who had previously balked at heavy AI outlays.
Should investors sell immediately? Or is it worth buying Nvidia?
The contrast with Nvidia’s financing concerns is instructive. While Amazon’s capex offensive is being rewarded, Nvidia’s potential guarantee obligations have triggered caution. The market, it seems, is becoming more discriminating about which AI bets deserve premium valuations.
Nvidia’s most recent reported quarter showed record revenue of 81.6 billion dollars, with the data center business growing 92 percent. GAAP gross margin stands at 74.9 percent, operating cash flow reached roughly 50.3 billion dollars, and the board authorized an additional 80 billion dollars in buybacks while raising the quarterly dividend from 0.01 to 0.25 dollars per share. Yet mere reporting of the possible OpenAI guarantee — covering leasing and construction financing for a project in Ohio — sent the stock down about five percent in a single session, erasing roughly 250 billion dollars in market value within hours. No final agreement has been confirmed.
What August 26 Must Answer
The upcoming quarterly report carries unusual weight. Management’s revenue forecast of 91 billion dollars will need to hold up against questions about the OpenAI exposure, and investors will be looking for confirmation that hyperscaler demand remains organic rather than subsidized through financial engineering.
Should Nvidia demonstrate that its customers’ spending is genuine and that the OpenAI guarantees don’t represent a balance-sheet liability, the stock could reclaim its position as the undisputed favorite of the AI rally. If questions about the credit arrangement linger, the uncertainty could continue to cap any recovery.
The company’s next earnings release will also need to address the trajectory of the Blackwell platform and its successor, Vera Rubin, which Nvidia has already begun previewing. With the stock trading below its 50-day average until this week’s bounce, the market is clearly waiting for evidence before committing further capital.
For now, the chip giant finds itself in an unusual position: delivering record financial results while facing questions about whether its own financing arrangements are inflating the demand it reports. The answer, when it comes on August 26, may determine not just Nvidia’s trajectory but the broader narrative around who is truly paying for the AI buildout.
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