Famous Big Short investor Michael Burry raised new concerns about Nvidia (NVDA) after the chipmaker teamed up with major Wall Street firms on a $500 billion deal. Burry, who bets against the company’s stock, called the plan part of a linked chain of funding deals.
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AMZO: built for a short position on AMZNWriting on his Substack page, Burry stated that “the more one understands, the more one sees that it is a sign of desperation.” He argued that Nvidia created the program “to prime the capital pump to get more sales and maintain NVDA’s 20 percentage point scarcity-induced gross margin increase.”
Nvidia’s Fundraising Caused the Stock Drop
Nvidia partnered with Apollo (APO), BlackRock (BLK), Blackstone (BX), Brookfield (BN), Goldman Sachs (GS), and KKR (KKR) to set up AI infrastructure platforms. The announced goal involves gathering over $500 billion in funding to help customers buy Nvidia graphics chips. News of the deal initially raised investor concerns over vendor financing. This caused Nvidia stock to fall 3% on Monday.
CEO Jensen Huang responded on social media to clarify how the program works. He explained that Nvidia “may provide a residual-value support mechanism for up to 25% of an opportunity.” Huang emphasized that the support remains limited and works alongside independent bank underwriting rather than replacing traditional loans.
The Cost to Insure Nvidia’s Debt Has Doubled Since May
Financial metrics show growing concern among bond investors. The price of Nvidia’s five-year credit default swaps trades near 79.8 basis points, close to its record high of 83.7 basis points set in late July 2026. The cost to insure Nvidia’s debt against default has more than doubled since late May.
Major cloud providers including Alphabet (GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT) are accumulating a lot of debt to build out AI data centers. Moreover, Nvidia often acts as both vendor and financier by helping buyers raise funding and secure site locations.
Is Nvidia a Strong Buy Now?
On TipRanks, NVDA stock continues to carry a Strong Buy consensus, based on 37 analysts issuing ratings in the past three months. This is based on 36 Buys and one Hold rating. The average 12-month NVDA stock price target is $309.94, implying about 38.3% upside potential from the current price levels. (See NVDA stock forecast)
