NVDA earnings scheduled for Wednesday have sparked concerns about fake AI chip demand tied to circular investment patterns. The NVDA stock price faces pressure as analysts question whether revenue growth is artificially inflated. Even more, Dow Jones futures are reacting to fears of a NVDA AI bubble.

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NVDA Stock Price Risks Rise As Dow Jones Futures Eye Nvidia AI Bubble

The Circular Financing Pattern Behind NVDA Earnings

Wall Street research firm NewStreet Research has estimated that for every $10 billion Nvidia invests in OpenAI, it will see $35 billion worth of GPU purchases or GPU lease payments. This fake AI chip demand concern centers on circular deals where Nvidia invests billions into AI startups like OpenAI, which then use that money to buy Nvidia chips.

Jay Goldberg, an analyst with Seaport Global Securities, said the deals had a whiff of circular financing and were emblematic of:

Stacy Rasgon, an analyst with Bernstein Research, wrote:

The action will clearly fuel ‘circular’ concerns.

Market Impact on NVDA Stock Price and Dow Jones Futures

With a market cap around $4.4 trillion, Nvidia accounts for roughly 8% of the S&P 500. Options pricing suggests the NVDA stock price could swing 7% either way by week’s end. The Dow Jones futures signal broad concern about the Nvidia AI bubble affecting retirement accounts.

Dennis Follmer, chief investment officer at Montis Financial, stated:

A great earnings report with higher guidance from Nvidia really shouldn’t surprise anyone, but it may reinforce concerns over seemingly limitless AI capital budgets.

Louis Navellier of Navellier & Associates noted concerns about “the circular financing agreements among the builders of the massive data center buildouts, which are the big buyers of Nvidia chips.” The shares have added over one-third of their value this year.

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Wednesday’s NVDA Earnings Could Validate or Expose Fake AI Chip Demand

What Jensen Huang, the CEO, says on Wednesday regarding the prospects might confirm or refute the bogus claims of the fake AI chip demand issues. The NVDA earnings event is considered to be the largest one of earning season. This will impact the Dow Jones futures and the indexes in general. After all, the Nvidia AI bubble story is the talk of the day on AI valuations and the NVDA stock price movement.