Nvidia discusses insurance risks amid falling valuation and Chinese stocks
Nvidia is discussing with insurers the transfer of part of the credit risks associated with AI chip financing. At the same time, the Chinese stock market fell to a yearly low on chip and optical companies, and Nvidia's forward valuation dropped below 17 expected earnings.
Sources
· 10Nvidia ведёт переговоры со страховщиками о переносе рисков финансирования ИИ-чипов
1Китайские акции упали до годового минимума на фоне снижения чиповых и оптических компаний
2Падение оценки Nvidia сигнализирует о сомнениях рынка в росте прибыли
3Nvidia инвестирует $3,5 млрд в конвертируемые облигации MediaTek
4Сообщается, что Китай рассматривает разрешение ByteDance и Alibaba покупать чипы Nvidia
5Nvidia ведёт предварительные переговоры с корейским чип-стартапом Rebellions о возможной сделке
6Nvidia прогнозирует выручку в 2028 финансовом году около $700 млрд, обойдя Apple и Alphabet
7Nvidia turns to insurers to spread the risk of AI build-out
8Nvidia partners with Wall Street giants to raise $500 billion for AI buildout | Reuters
9Chinese Stocks Hit One-Year Low as Chip, Optical Firms Slide - Bloomberg
10Key points
- Nvidia held talks with insurers about transferring part of the risks of lending collateralized by chips to expand demand beyond large technology groups.
- Discussions center on insuring losses on loans to cloud computing startups ("neocloud") in the event of default and inability to resell the pledged chips.
- The benchmark CSI 300 index fell 2.4% on Monday to a yearly low, with chipmakers and optical component makers leading the decline.
- Nvidia's forward price-to-earnings ratio fell below 17 — half the 2025 level and below the mark of more than 25 expected earnings in May.
- On August 10, Nvidia signed memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR on platforms to attract more than $500 billion for AI infrastructure.
What happened
Nvidia held talks with insurance companies about taking on the risks of lending collateralized by its chips. The structures under discussion include insuring losses on loans to startups in cloud computing, or "neocloud", if they default and the pledged chips cannot be resold to repay the debt. Talks are at an early stage and may not lead to deals.
On Monday the benchmark CSI 300 index fell 2.4%, hitting a yearly low. The decline was led by chipmakers and optical component makers, including Cambricon Technologies, GigaDevice Semiconductor, Zhongji Innolight and Eoptolink Technology, whose shares each fell at least 5%.
Nvidia shares trade at a forward price-to-earnings ratio below 17, close to the lowest level in more than a decade, according to Bloomberg. That multiple is half what it was in 2025 and has fallen from more than 25 expected earnings as recently as May. The valuation decline persists even though Nvidia shares capped a five-day rally on Monday amid a broader recovery in the semiconductor sector.
What changed
On August 26, CFO Colette Kress told investors that revenue in fiscal 2028 will grow by 70%, implying revenue of about $673–700 billion. Now Nvidia's forward P/E is below 17 — half the 2025 level.
Who's affected
In China, the decline was led by chipmakers Cambricon Technologies and GigaDevice Semiconductor, as well as optical companies Zhongji Innolight and Eoptolink Technology, whose shares each fell at least 5%. Nvidia itself trades at a forward P/E below 17, close to the lowest level in more than a decade.
Context
In addition to the talks with insurers, Nvidia invested $3.5 billion in MediaTek convertible bonds, deepening the partnership in data center components. The company also held preliminary talks with South Korean AI chip developer Rebellions about possible cooperation, investment or acquisition. China's Ministry of Industry and Information Technology signaled that it may allow ByteDance and Alibaba to buy new Nvidia chips for high-performance professional computers.