Nvidia shares fell sharply during a broad tech sell-off on Friday, dropping as much as 5.3%. The main catalyst cited was concern over the rising cost of AI and who will pay for it, after reports that Nvidia is in talks to provide billions of dollars in credit guarantees for an Nscale data center that Anthropic will use. The article says Nvidia's data center-related commitments and guarantees reach $165 billion, and its equity stakes in publicly traded companies exceed $63 billion. It also cites fiscal 2027 second-quarter revenue of $96 billion, up 106% year over year, and more than $99 billion in cash and marketable securities as sufficient to cover these commitments. The author is positive on the stock, noting it trades at less than 26 times earnings and has not been this cheap since 2019.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
NVDAAI investmentdata centersAnthropicvaluation
Open a keyword to see other news on the same topic.
Related tickers and likely impact
NVDA
▼ Likely negativeNvidia
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.1T |
| Close on 10/29/2026 | 213.66 |
| Change that session | -0.80% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Anthropic Is in Talks for Another $45 Billion AI Deal. Nvidia Could Be a Big Winner.
Anthropic, the company behind Claude, is reportedly in talks with British neocloud provider Nscale to expand an existing compute deal by about $45 billion in contract value, which would bring its total Nscale commitment to roughly $90 billion. The proposed deal would add 460 megawatts of capacity using Nvidia's Vera Rubin chips in a second building at Nscale's Monarch campus in West Virginia, plus a right of first refusal on a planned third building. Nscale's customer base is highly concentrated, with Microsoft and Anthropic accounting for about 85% of its contract value, and Microsoft pulled out of a planned UK data center after power connection delays. Anthropic is preparing an IPO reportedly targeting a $1.5–2 trillion valuation, with 2025 revenue of about $4.6 billion, $7.33 billion spent on computing and infrastructure, and an operating loss of over $8 billion.
- Nscale in talks for $45 billion Anthropic AI deal as IPO looms
Nscale is in talks to secure a computing deal worth about $45 billion with Anthropic, according to Bloomberg News, which could strengthen the Nvidia-backed data center developer's bid for a roughly $30 billion valuation in its planned IPO. The proposed agreement would cover a second building at Nscale's Monarch campus in West Virginia, delivering 460 megawatts of capacity powered by Nvidia's Vera Rubin chips, and could be finalized within days, though terms could still change. Anthropic already has infrastructure agreements with Nscale worth as much as $44.6 billion, according to Nscale's IPO filing, and holds a right of first refusal on the campus's anticipated third building. Investors are scrutinizing AI infrastructure economics, and Nscale faces questions similar to CoreWeave's about financing, execution and converting its backlog into cash flow, since its contracts are future commitments rather than collected cash. Representatives for Nscale and Anthropic declined to comment.
- Nvidia’s GPU Rents Surge as Anthropic’s Revenue Has “Gone Vertical,” Says Gavin Baker
Anthropic's S-1, filed Monday, shows $2.08 of revenue per dollar of compute, up from $0.40 a year earlier, according to an analysis Gavin Baker endorsed. Baker argues that cheaper tokens raise total compute spending, which supports demand and pricing for Nvidia's GPUs; Social Capital puts H100 rental prices up 45% since December. Anthropic posted GAAP operating income of $974 million in the second quarter, and Nvidia has invested $10 billion in the lab. Analysts expect Nvidia's revenue to grow from $215.9 billion in fiscal 2026 to $692 billion in fiscal 2028, though gross margin is expected to dip to 71% to 72% in the January 2027 quarter as memory costs rise. The stock trades at 18x forward earnings versus a three-year average of 30x, ahead of its Nov. 17 report.
- Nvidia Stock Is 10% Below Its Record. Does Anthropic's IPO Filing Make It a Buy?
Anthropic's IPO filing shows it has agreed to pay up to about $206 billion to rent computing power built on Nvidia chips from three providers, including up to $120.5 billion with SpaceXAI, around $44.6 billion with Nscale and about $41.3 billion with Lambda. These are cloud rental contracts rather than chip orders, and rent also covers buildings, power, financing and provider profit, so Nvidia's portion is likely much smaller; commitments to Google and Broadcom alone total about $276 billion. Nvidia's data center revenue reached $89.0 billion in fiscal Q2 2027, more than double a year earlier, and the author argues its growth does not rest on any one lab. At around $216, Nvidia stock trades at about 14 times expected fiscal 2028 earnings per share; the author says they would consider investing at that level, though the filing does little to strengthen that case by itself.
- Nvidia Stock Could Be Headed for a Significant Revaluation
The article argues NVIDIA could reach $400 in 2027, a gain of about 79% from $223.55. Second-quarter fiscal 2027 revenue reached $96.22 billion, up 105.8%, with Data Center sales rising 117% to $89.02 billion. The average analyst target of $328.72 implies about 47% upside, and fiscal 2028 EPS estimates have been revised upward. At $400, shares would trade near 25x forward earnings, versus about 14x today and 21 to 23x for the S&P 500. Key drivers include Vera Rubin orders and top-five hyperscaler capex rising from nearly $800 billion in 2026 to $1.3 trillion in 2027, while risks include memory costs that could push gross margin to 71% to 72%.
- Anthropic Just Committed Up to $567 Billion to Compute and Infrastructure. These 3 Industrial Stocks Build What That Money Buys.
Anthropic's IPO prospectus shows about $417 billion in future compute and infrastructure payment obligations as of December 31, 2025, plus an estimated $125 billion to $150 billion for additional computing capacity, for a total of $542 billion to $567 billion. The article argues data centers need backup power and equipment, highlighting Caterpillar for generators and construction machinery; Bloom Energy, whose third-quarter revenue rose 138% to $1.24 billion and which raised its full-year revenue outlook to $4.4 billion–$4.6 billion; and GE Vernova, whose second-quarter orders reached $24.2 billion, an 88% organic increase. The article notes these companies will not necessarily receive contracts from Anthropic.
Related markets
Latest news
- Anthropic turns profitable but could go back into losses: Seaport analyst
Seaport Research Partners analyst Jay Goldberg views Anthropic's operating profit of almost $1 billion as likely temporary. He said the company has warned it may be profitable in the next quarter or two before returning to losses, as it shifts from leasing computing capacity by the hour from Amazon to building its own compute, which it considers a key competitive advantage and will spend heavily on. Goldberg described the relationship with Amazon (AMZN) and Google (GOOG, GOOGL) as complex, since Anthropic is both a major customer, with a large share of Amazon's AI revenue coming from it, and a potential competitor. He does not think conclusions about Anthropic can be drawn from this week's tech market moves, citing interest rates and an ongoing war. Anthropic's computing bill is falling quickly, which is good news for now, but that is expected to reverse as it starts buying its own compute.
- Why GE Vernova Stock Fell on Friday
GE Vernova shares fell as much as 4.9% in Friday's trading despite strong third-quarter results, with revenue up 27% year over year and orders surging 96% organically, amid an AI infrastructure stock sell-off. Backlog rose $20 billion to a record $197 billion, and management expects it to top $200 billion in the fourth quarter. The company will acquire Trench Group for $9 billion, funding half the price with debt, and several analysts cut price targets, including TD Cowen to $1,125 from $1,235 and Jefferies to $1,100 from $1,185. The analysts are not bearish on the stock but are concerned about conversion timing and limits on margin expansion. Management raised full-year guidance, lifting free cash flow at the midpoint to $16.5 billion from $12 billion, and doubled its buyback authorization to $20 billion.
- Orezone Files Technical Report for the Casa Berardi Updated Life-of-Mine Plan
Orezone Gold has filed the NI 43-101 technical report supporting the updated Life-of-Mine Plan for its Casa Berardi mine in Quebec, Canada, which was previously announced on September 15, 2026. The report, a Preliminary Economic Assessment with an effective date of June 30, 2026, is available on SEDAR+ and the company's website. Orezone states there are no material differences between the report and the results disclosed in the earlier news release. The company notes that Casa Berardi, which it recently acquired, has produced over 3.2 million oz of gold to date.
- Evercore ISI downgrades Reddit, says monetization may not offset traffic weakness
Evercore ISI downgraded Reddit to In Line from Outperform and cut its price target to $120 from $265 after the company's third-quarter results beat estimates but warned of declining traffic due to AI search summaries. Analyst Mark Mahaney said U.S. daily active users fell 2% year over year, and management warned global daily active users could drop by a low-double-digit percentage in the fourth quarter from about 130 million if search-referral losses continue at October's pace. Revenue rose 53% to $895 million and adjusted EPS was $1.40, but fourth-quarter guidance had a midpoint of $1.015 billion, below the $1.05 billion Wall Street estimate, and shares fell more than 29% on Friday. Evercore still views monetization positively but is less confident that it can offset pressure on user growth.
- Intel Stock Suffers Worst Crash in 50 Years as Weak Forecast Overshadows AI Chip Demand
Intel shares plunged nearly 30% to $65.76 on Friday, wiping out more than $146 billion in market value in the worst single-day decline in over 50 years, after the chipmaker forecast fourth-quarter revenue of $15 billion to $16 billion, below the $17.07 billion Wall Street expected. Its third-quarter results were strong, with revenue up 21% to $16.5 billion and Data Center and AI revenue reaching $7.3 billion, up 78%. However, Intel forecast adjusted EPS of $0.25 versus the $0.43 estimate and a non-GAAP gross margin of 38%, down from 44.1%, citing weak PC demand, server chip manufacturing constraints and an accident at an Israel factory. CFO Dave Zinsner called 2027 an investment year and warned that positive free cash flow is probably not likely next year, as Intel spends heavily on manufacturing expansion.
- Former SEC Chair: Broadcom's $63 Billion Package Feels Like "That 08 Off-Balance Sheet Craze"
Broadcom has put together a $63 billion package so Anthropic can buy its chips, and banks plan to sell as much as about $21 billion of high-grade bonds from it as soon as early next year. Former SEC Chair Gary Gensler compared the package to the off-balance-sheet deals of 2008 and raised concerns about guarantees written by Broadcom, NVIDIA and AMD. Broadcom provides residual value support on the $42 billion of senior debt, which costs it if the chips are worth less than what is owed. Anthropic is both Broadcom's growth driver and its credit risk, as its run-rate revenue passed $30 billion while its IPO filing showed steep losses. Broadcom trades at 20x forward earnings, near its three-year low, and the author says some of that risk is already reflected in the price.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.