Nvidia weighs Nscale backstop as AI chip stocks retreat

By Marcus Bennett

Nvidia is discussing credit guarantees for an Nscale AI campus linked to a potential $45 billion Anthropic computing agreement as Nvidia shares fell 2% overnight.

Credit terms and exposure

The talks center on a West Virginia facility that UK-based Nscale wants to bring online as part of a series of large AI campuses. Anthropic intends to use the site. If Nvidia proceeds, its backstop would cover electricity and construction costs.

Nscale is also pursuing an initial public offering. Some investors have pushed back on its $30 billion valuation target. Nvidia invests in Nscale and supplies its GPUs, so a guarantee would place the chipmaker on both sides of the project's financing and sales economics.

The reported discussions came late Thursday. They remain preliminary, with no agreement confirmed.

Market reaction hits infrastructure names

The selloff spread across semiconductor and AI infrastructure stocks:

• Nvidia fell 2% in overnight trading before Friday's session.
• AMD fell 6.4%, while Micron Technology fell 3.4%.
• The iShares Semiconductor ETF, SOXX, dropped 5.5% after hours.
• Marvell Technology lost 13.5% in regular trading and another 5.5% overnight.
• Intel plunged 23% after forecasting below-expectation sales and profit for the December quarter and reporting continued weakness in the PC market.

Amazon's results also increased concern about the cost of building AI capacity.

Intel's decline does not settle the Nvidia case

Gene Munster, managing partner at Deepwater Asset Management, said: “The $INTC guide down should not be extrapolated on $NVDA.” He wrote on X that PC demand explains Intel's warning and should not be read as a warning about Nvidia's trajectory.

Munster also noted that Nvidia has continued to beat estimates despite elevated memory costs. Hyperscale customers have signaled that calendar 2027 capital spending will be significantly higher than in 2026. That outlook supports continued accelerator demand, although it does not remove financing risk from infrastructure projects.

What does the credit backstop change for Nvidia?

For Nvidia, the proposal would reduce Nscale's need to shoulder electricity and construction financing alone. That could help bring the campus online and support processor sales under the potential Anthropic agreement. It would also make Nvidia a financing backer for infrastructure designed to create demand for its own chips.

The trade-off is direct: Nvidia would gain exposure to project execution, power costs and the pace of customer deployment. The arrangement therefore draws the chipmaker closer to the capital intensity of AI infrastructure. Investors have become less tolerant of expensive infrastructure commitments, even when chip earnings hold up.

Deal scale and peer financing

Nscale has discussed a potential $45 billion computing agreement with Anthropic based on Nvidia's next-generation Vera Rubin processors. The agreement could generate billions of dollars in revenue for Nvidia.

AMD plans to invest up to $5 billion in Anthropic as part of a partnership that could involve tens of billions of dollars in computing infrastructure. This puts AMD in the same broad position as Nvidia: each could act as both supplier and financial backer to a major AI customer.

Analyst targets after the pullback

Sell-side coverage remained positive after the decline:

• Nvidia: Strong Buy, with 33 buy ratings, a $323.45 average 12-month target and about 51% implied upside.
• AMD: Strong Buy, with 30 buy and six hold ratings, a $664.31 target and about 17% upside.
• Marvell: Strong Buy, with 26 buy and three hold ratings, a $354.56 target and about 62% upside.

The targets and implied gains use Thursday's closing prices. Marvell offers the widest projected return among the three, but its reported acquisition talks with Lumentum have raised dilution concerns. Lumentum's valuation stands at roughly $83 billion. Neither Marvell nor Lumentum has confirmed an agreement.

Nvidia's growth increasingly depends on spending by a small group of hyperscale customers. Its shares remain about 15% higher year to date, while Stocktwits measured bearish retail sentiment for a second consecutive day.