Nvidia Stock Slumps Amid Rising Memory Costs and Earnings Anxiety

Nvidia's stock was down more than 2.2% on Monday, marking a seventh-straight day of declines, as anxiety heading into the company's Wednesday earnings call appears to be concerning investors.

The decline comes amid rising memory costs and growing concerns over Nvidia's practice of inking 'circular financing' deals, such as taking equity stakes in companies like OpenAI and Anthropic that also serve as some of its largest customers. For related coverage, explore our detailed analysis on Technology and Digital Systems.

Key Analysis and Detailed Timeline

Nvidia told its biggest customers it would be hiking prices as much as 15% next year for servers with its AI chips due to rising memory costs, Bloomberg reported over the weekend.

This comes amid a broader slide in semiconductor stocks, with AMD, TSMC, and Broadcom all falling on Monday, and the Philadelphia Semiconductor Index sliding 2.7%.

Many Wall Street analysts remain bullish on Nvidia, which has achieved astounding success to become the largest company in its industry.

Broader Impact and Sector Outlook

At least one analyst at Cantor Fitzgerald informed investors in a research note on Monday they expected the stock to begin climbing again very fast, with a target price of $350.

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Nvidia's practice of inking 'circular financing' deals has also come under scrutiny, with some critics questioning its impact on the company's relationships with its largest customers.

Additionally, the company's AI data center buildout needs to power its technology have sparked growing political backlash.

Nvidia reports its second quarter earnings on Wednesday after the bell, a highly anticipated report after other AI giants missed their quarterly projections, including Meta, which reported missing its earnings projections in July.

The company's trading price of just under $210 as of around 1 p.m. EDT on Monday marked a more than 2.2% drop on the day, with the stock down nearly 7% over the seven-day streak of declines.

Nvidia's CEO Jensen Huang owns about 3% of the company and has an estimated net worth of $181.7 billion, making him the eighth-wealthiest person in the world as of Monday.

Nvidia’s stock was down well over 2% on Monday afternoon, pacing for its seventh-straight day of declines as anxiety heading into the AI chipmaker’s Wednesday earnings call appears to be concerning investors.