Nvidia's AI Deals Fail to Boost Stock; Up Just 5% This Year, Lagging Behind Chip Peers

According to Barron's, Nvidia (NVDA-US) saw its stock decline on Monday (27th) as the chip giant advances a series of transactions with SK Hynix (SKHY-US), OpenAI, and Siemens.

Nvidia closed down nearly 5% on Monday at $196.51, following a 0.9% drop the previous trading session. The decline came after reports that a Chinese state-backed company had begun mass-producing semiconductor manufacturing equipment, triggering a broad selloff in chip stocks.

Investors are also digesting news that Nvidia may provide a massive financing guarantee to OpenAI. The Wall Street Journal reported that Nvidia is in talks to offer OpenAI a $250 billion financing guarantee to support what could become the largest data center project to date. This guarantee would help OpenAI lease a data center project being developed in Ohio by an energy subsidiary of SoftBank.

Nvidia's performance this year has failed to keep pace with the broader chip sector rally, rising only 5.4% year-to-date, compared to a 63% surge in the Philadelphia Semiconductor Index. The index closed down 2.2% on Monday.

On the other hand, Nvidia announced late Friday that it had reached a $500 billion agreement with South Korea's memory chip giant SK Hynix to ensure long-term, stable supply of AI memory.

On Sunday evening, Nvidia also announced an expanded partnership with Siemens, under which the two companies will jointly launch agent-based AI workflows with self-verification capabilities.

Despite a string of major partnership and transaction announcements in recent days, Nvidia's stock performance continues to lag behind other chip stocks.