Nvidia shares gained more than 1% Tuesday, reversing Monday's decline, after Bank of America called circular financing concerns overblown and predicted a beat-and-raise quarter ahead of Nvidia's August 26 report.
As covered in our post on Monday's Nvidia pullback, the market's initial reaction to news of Nvidia's reported $500 billion AI funding partnership with Apollo Global and Blackstone was decidedly cautious. By Tuesday, sentiment had reversed: Nvidia (NASDAQ: NVDA) shares gained more than 1% in premarket trading, bouncing back from Monday's nearly 3% decline, as new details emerged and Bank of America issued a notably bullish note on the stock.
The financing partnership expands further
Tuesday's reporting clarified that Nvidia's financing arrangement is even broader than initially understood — the chipmaker has now partnered with six large asset managers as part of the AI infrastructure funding push first reported Monday. That expanded scope, involving multiple institutional partners rather than just Apollo and Blackstone alone, appears to have helped reframe the deal as a diversified financing structure rather than a narrower, more concentrated "circular financing" arrangement.
BofA's bullish case, point by point
Bank of America analysts maintained their buy rating on Nvidia and called it a top sector pick, arguing the stock is "cheap despite how fast it's growing." Critically, the analysts explicitly addressed the exact concern that drove Monday's selloff, calling "memory and circular financial concerns" "overblown." That direct pushback against the specific narrative that had pressured the stock gave investors a credible counterargument heading into Tuesday's session.
A beat-and-raise quarter expected on August 26
Looking ahead, BofA's analysts expect Nvidia to beat revenue expectations and raise its outlook when the company reports its fourth-quarter results on August 26. They outlined five specific factors for investors to track heading into that report, including the Vera Rubin chip launch timeline — the same next-generation AI system referenced in Nvidia's SK Hynix supply agreement we covered last month — and gross margin durability amid ongoing memory cost inflation.
Why this matters for the broader AI infrastructure debate
Nvidia's rebound offers a useful contrast to some of the more skeptical reactions we've tracked this earnings season. Where AMD and SpaceX saw strong results overshadowed by capex concerns, and Alphabet's own debt-and-capex story weighed on its stock again this week (covered in our companion post), Nvidia's recovery — backed by a major bank's explicit rejection of circular financing concerns — suggests analyst conviction in Nvidia's specific position remains considerably stronger than for some of its AI infrastructure peers.
What investors should watch
- Further details on the six-asset-manager financing partnership, as more information continues to emerge
- Progress on the Vera Rubin chip launch, one of BofA's five key factors heading into earnings
- Gross margin trends amid memory cost inflation, another factor BofA flagged as worth tracking closely
- Whether Tuesday's rebound holds through to the August 26 earnings report, or whether circular financing concerns resurface with new developments
Bottom line
Nvidia's quick rebound from Monday's selloff, backed by Bank of America's explicit dismissal of circular financing concerns and a bullish beat-and-raise call ahead of its August 26 report, shows the stock retains considerable analyst conviction even amid a broader earnings season marked by skepticism toward AI infrastructure spending. Whether that conviction proves justified will become clearer as more details of the six-asset-manager financing deal emerge.
This post is based on reporting from CNBC as of August 11-12, 2026. This content is for informational purposes only and does not constitute investment advice.
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