Nvidia Pauses Some Revenue Sharing Deals With AI Cloud Companies, Putting Circular Financing House Of Cards In Jeopardy

Something remarkable happened today: at one point on Thursday afternoon, Nvidia's market cap was up almost $500 billion (reversing an earlier slide after hours on Wednesday only after Jensen Huang pulled all emergency stops during the earnings call, and unveiled a unprecedented 2028 (not 2027) forecast of 70% revenue growth vs consensus expectations of 45%, because somehow the NVDA CEO has visibility not one year into the future but two at a time, when Chinese LLMs are capturing 10% market share every month). And while the entire world was rushing into Nvidia stock, what do you think happened to Nvidia's credit as measured by the company's Credit Default Swaps. Surely a move of half a trillion dollars would send the company's credit risk crashing to record lows.

Well, no. While Nvidia stock posted the 3rd largest single-day market cap gain by any stock in history, its CDS moved... by 1 bps.