{"slug": "nvidia-drops-4-leading-chip-stocks-lower-amid-renewed-worries-of-circular", "title": "Nvidia drops 4%, leading chip stocks lower amid renewed worries of circular financing", "summary": "Nvidia stock fell 4% on Monday, leading chip stocks lower amid renewed concerns about circular financing after reports that the company may backstop $250 billion in funding for OpenAI to lease computing power. Apple surpassed Nvidia as the world's most valuable public company as peer AMD dropped over 5%, and memory makers Micron and SK Hynix fell more than 2% and 6%, respectively.", "body_md": "**What happened:** Nvidia ([NVDA](https://finance.yahoo.com/quote/NVDA/)) stock tumbled 4% on Monday, leading the rest of the chip sector lower. As a result of the pullback, Apple ([AAPL](https://finance.yahoo.com/quote/AAPL/)) surpassed Nvidia as the world's most valuable public company.\n\nPeer chipmaker AMD ([AMD](https://finance.yahoo.com/quote/AMD/)) also declined more than 5% on Monday, and memory makers plunged, with Micron ([MU](https://finance.yahoo.com/quote/MU)) and SK Hynix ([SKHY](https://finance.yahoo.com/quote/SKHY/)) dropping more than 2% and 6%, respectively.\n\n**What's behind the move: **Reports that the company may backstop $250 billion in funding for OpenAI ([OPAI.PVT](https://finance.yahoo.com/quote/OPAI.PVT/)) to lease computing power from a US data center project have renewed concerns about [\"circular\" financing](https://finance.yahoo.com/news/nvidia-says-it-isnt-using-circular-financing-schemes-2-famous-short-sellers-disagree-100021210.html), an arrangement where suppliers are also major investors in their customers.\n\nThe potential deal would be one of the largest of its kind for the chipmaker, according to Bloomberg.\n\nThe AI chipmaker also [announced a strategic collaboration](https://nvidianews.nvidia.com/news/sk-group-and-nvidia-expand-strategic-partnership-across-ai-factories-and-next-generation-memory) with the conglomerate SK Group, the parent company of SK Hynix ([SKHY](https://finance.yahoo.com/quote/SKHY/)), on Friday for a $500 billion-plus initiative spanning AI factories and next-generation memory.\n\nAt the same time, concerns that China may be winning the AI race are putting pressure on the sector. The Information reported that a Chinese state-backed company began mass-producing a key piece of chipmaking equipment, sparking a sell-off in ASML ([ASML](https://finance.yahoo.com/quote/ASML/)) shares.\n\n**What else you need to know:** Worries of circular investments between a chipmaker like Nvidia and the AI developer that buys its equipment only add concerns about demand, AI valuations, and debt.\n\nBloomberg [noted the price of protecting Nvidia's debt](https://finance.yahoo.com/technology/ai/articles/nvidia-credit-risk-jumps-swaps-132725734.html) against default for five years rose by the most on record on Monday, stoking fears of rising funding commitments.\n\nInvestors have also grown increasingly jittery over AI infrastructure spending, calling into question their return on investment.\n\nLast week, Alphabet** **([GOOG](https://finance.yahoo.com/quote/GOOG/), [GOOGL](https://finance.yahoo.com/quote/GOOGL/)) shares plummeted after the tech giant announced it would raise its capital spending outlook as it builds out its AI infrastructure.\n\nInvestors are now awaiting earnings this week from Microsoft ([MSFT](https://finance.yahoo.com/quote/MSFT/)), Amazon ([AMZN](https://finance.yahoo.com/quote/AMZN/)), and Meta ([META](https://finance.yahoo.com/quote/META/)), all of which are expected to announce further increases in AI-related spending.\n\nAny hint of a slowdown, however, would spell trouble for the companies that make semiconductors and related equipment.\n\n*Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at **@ines_ferre**.*\n\n**Click here for in-depth analysis of the latest stock market news and events moving stock prices**\n\n**Read the latest financial and business news from Yahoo Finance**", "url": "https://wpnews.pro/news/nvidia-drops-4-leading-chip-stocks-lower-amid-renewed-worries-of-circular", "canonical_source": "https://ca.finance.yahoo.com/news/nvidia-drops-4-leading-chip-stocks-lower-amid-renewed-worries-of-circular-financing-193309793.html", "published_at": "2026-07-27 19:33:09+00:00", "updated_at": "2026-07-27 19:52:43.936205+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-chips"], "entities": ["Nvidia", "Apple", "AMD", "Micron", "SK Hynix", "OpenAI", "SK Group", "ASML"], "alternates": {"html": "https://wpnews.pro/news/nvidia-drops-4-leading-chip-stocks-lower-amid-renewed-worries-of-circular", "markdown": "https://wpnews.pro/news/nvidia-drops-4-leading-chip-stocks-lower-amid-renewed-worries-of-circular.md", "text": "https://wpnews.pro/news/nvidia-drops-4-leading-chip-stocks-lower-amid-renewed-worries-of-circular.txt", "jsonld": "https://wpnews.pro/news/nvidia-drops-4-leading-chip-stocks-lower-amid-renewed-worries-of-circular.jsonld"}}