Nvidia's Support Zone Holds as Investors Parse the Fine Print of AI's Financing Web

Nvidia shares rebound 1.4% but stay 15% below record. Technical support holds as circular financing deals and rising memory costs raise questions.

The numbers tell two stories at once. Nvidia shares have clawed back to €171.68, up 1.41 percent in Thursday's session, after a week that tested the patience of even the most committed bulls. Yet the stock remains 15.22 percent below the May record of €202.50, and the weekly tally still shows a 6.99 percent decline. For investors, the question is whether this is a routine pullback or the first crack in a narrative that has powered one of the most remarkable runs in market history.

The 200-Day Line Is Holding — For Now

Technicians point to a critical floor that has repeatedly caught bids this year. The shares trade just 3.20 percent above the 200-day moving average of €166.35, a level that has served as support on multiple occasions. The distance from the 52-week low of €139.78 — a cushion of 21.12 percent — suggests the market is not pricing in a collapse of the AI investment cycle, but rather a reassessment of near-term risks.

Momentum indicators paint a similar picture. The relative strength index sits at 44.4, a neutral reading that leaves room for upside without signaling exhaustion. The annualized volatility of nearly 37 percent, however, underscores just how jittery trading has become. A break below the 200-day line would be the signal that worries chartists; holding it keeps the bull case technically intact.

The Circular Financing Question

The pressure on the stock has little to do with competitive threats or export restrictions. It centers on a growing unease about how some of Nvidia's largest deals are being structured. Reports indicate the company is negotiating a guarantee for $250 billion that would allow OpenAI to lease computing capacity for a US data center project. The pattern — a supplier effectively underwriting its own demand — triggered a single-session drop of nearly 5 percent and dragged the entire chip sector lower. Apple subsequently overtook Nvidia as the world's most valuable listed company.

The concerns extend beyond that single deal. Nvidia is reportedly working on AI agreements worth over €750 billion, including a €500 billion partnership with the SK Group. Skeptics argue the company is increasingly acting as financier and guarantor for cloud providers, which could artificially inflate demand signals. The so-called capex paradox adds another layer: hyperscalers are pouring billions into hardware while software revenue from AI applications has yet to grow at a matching pace.

Wedbush analysts flag rising memory costs as a further margin concern. On the upcoming Vera Rubin platform, memory components are expected to account for roughly 29 percent of system costs, a figure that could pressure profitability.

Hyperscaler Spending Remains the Core Thesis

Despite the financing questions, the fundamental argument for Nvidia has not changed. Amazon, Alphabet, Microsoft, and Meta are projected to invest around €725 billion in AI infrastructure in 2026 alone, with cumulative spending potentially reaching €7.6 trillion by 2030. Much of that flows directly into Nvidia's chip architectures — H100 remains in production, Blackwell is rolling out, and Rubin is on the horizon.

The bottleneck, according to bulls, is not demand but manufacturing capacity at contract chipmakers like TSMC. The company has guided to roughly $91 billion in revenue for the second fiscal quarter of 2027, with a 2 percent variance band, up from $81.6 billion in the first quarter. The report is due August 26, 2026, and is widely seen as the next major catalyst.

China: Symbolic, Not Structural

On the export front, the picture remains one of controlled frustration. Trade official Jeffrey Kessler told Congress that H200 chip shipments, despite approved licenses worth $10 billion, remain negligible. Chinese tech firms have ordered more than two million H200 chips for 2026, against Nvidia's total inventory of roughly 700,000 units. Washington's export controls effectively block the demand from materializing.

Meanwhile, Huawei's Ascend 950PR, China's most advanced AI chip, has been in series production for nearly four months, with commercial shipments beginning in March. Investors would be wise to treat China as a call option rather than a pillar of the investment thesis — any additional volume is a bonus, but a swift return to the region's former roughly 13 percent revenue share looks unlikely.

What Happens Next

The immediate trajectory depends less on Nvidia's own fundamentals — which remain robust by most measures — and more on how convincingly Microsoft, Meta, Amazon, and other cloud giants signal continued AI infrastructure investment in their upcoming earnings reports. Alphabet shares already dipped after the company raised its investment guidance, a preview of how sensitive the market has become to rising capex plans.

A weak forecast from any of the major hyperscalers would likely intensify skepticism about circular financing. The absence of such disappointment, combined with the supportive 200-day trend and the wide gap to analyst targets, would suggest the recent decline is a valuation correction rather than the start of a structural downturn.

The consensus price target stands at €262.76, implying upside of more than 53 percent from current levels — remarkable given that insiders have sold €410.6 million worth of shares over the past three months. Wall Street clearly still believes in the multi-year demand story. But that optimism now needs to be earned through cleaner, more transparent revenue recognition. The burden of proof, as one analyst put it, lies squarely with Nvidia itself.