Nvidia Won 'Very Competitive' Ohio AI Data Center Bid, SB Energy Co-CEO Says – BofA Claims Financing Risks May Be Overstated

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SB Energy Co-CEO Rich Hossfeld shrugged off concerns surrounding the rapid depreciation of AI chips, stating that SB Energy is only focused on the physical campus part of the deal.Nvidia’s stock traded in the red on Tuesday, on track to clock its third consecutive session in the red.According to BofA analyst Vivek Arya, Nvidia's current valuation looks “compelling,” and much of the risk tied to its growing vendor financing commitments may already be priced into the stock.Nvidia (NVDA) won a “very competitive” bidding process tied to the massive new Ohio data center project set to be leased by OpenAI, according to SB Energy Co-CEO Rich Hossfeld, who said the chipmaker's involvement will help support financing and “ensure the success” of the project.“It was a very competitive process,” Hossfeld said in an interview with CNBC. “I think that’s emblematic of the demand we’re seeing for compute. It’s not just OpenAI. It’s not just Anthropic.” He added that competing interest in the project came from leading hyperscalers, cloud providers and frontier AI companies.Hossfeld also stated that Nvidia's participation could help SB Energy secure favorable financing for the infrastructure portion of the project. “Nvidia helps us to unlock things like investment-grade financing. It helps us to ensure the project is a success,” he said.NVDA stock fell more than 2% in midday trade, marking a third consecutive session in the red, amid weakness in the broader market. On Stocktwits, retail sentiment around the AI bellwether remained in ‘bearish’ territory over the past day.NVDA stock price performance over the past three month on August 18 as of 12:30 p.m. ET | Source: TradingViewSB Energy Shrugs Off Concerns Over Chip DepreciationHossfeld also shrugged off concerns surrounding the rapid depreciation of AI chips, particularly as Nvidia introduces new GPU architectures at a faster pace.“Well, our view doesn't really matter because we're not financing, and we don't own the chips. We're not taking risk on the chips. That's something that Nvidia, OpenAI, and others will do,” he told CNBC.Instead, SB Energy is focused on infrastructure that it expects to remain in use for decades. “It's a 20-year lease. If you look at a data center, the data center life can be 20, 30, 40 years. That's how we look at our infrastructure. We're kind of the bedrock that underpins it,” Hossfeld said.The project is part of a broader push to build the infrastructure needed to support rapidly growing demand for artificial intelligence computing. SB Energy, which is backed by SoftBank, OpenAI and now Nvidia, is responsible for developing the site, including securing land, arranging power and building the physical data center infrastructure.BofA Sees 'Compelling' Valuation For Nvidia Amid Vendor Financing RisksIn a note to investors cited by TheFly, Bank of America (BofA) analyst Vivek Arya stated that Nvidia's current valuation presents a “compelling” opportunity. The analyst said the shares are trading at a 34% to 50% free cash flow discount even after accounting for risks tied to the company's growing vendor financing activities.Arya acknowledged that Nvidia's “off-balance-sheet risk matters but resists easy valuation,” adding that the stock's current price could be overstating those risks.BofA reiterated its ‘Buy’ rating and $350 price target on Nvidia. The firm also expects the company to provide additional disclosure on its off-balance-sheet commitments when it reports earnings on August 26. Wall Street is expecting Nvidia to report adjusted earnings per share (EPS) of $2.08 on $91.96 billion in revenue, as per Koyfin estimates.Read also: Everpure Stock Hits Record High – TD Cowen Says Oracle Could Be Its New Hyperscale Customer, Sees Meta Revenue Growth AheadFor updates and corrections, email newsroom[at]stocktwits[dot]com.

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Despite winning the fierce bidding for a large Ohio data center project to be leased by OpenAI, NVIDIA (NVDA) shares fell for the third consecutive session amid broader market weakness. Bank of America (BofA) evaluated NVIDIA's valuation as attractive at a 34% to 50% discount on a free cash flow basis, analyzing that vendor financing risks are already priced in. Investors are closely watching NVIDIA's off-balance-sheet commitments and earnings report, weighing infrastructure demand against chip depreciation risks.

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DYAX 전담 분석

Although NVIDIA won the bid for SB Energy's Ohio data center project, proving the robustness of AI compute infrastructure demand, its stock recently dropped over 2% to extend its losing streak to three sessions. BofA diagnosed that NVIDIA's current stock price overly reflects vendor financing risks, maintaining its buy rating and $350 price target.

The bullish scenario is that the August 26 earnings report beats Wall Street estimates of $91.96 billion in revenue and $2.08 in adjusted EPS while resolving financial risks, whereas the bearish scenario is that concerns over chip depreciation and off-balance-sheet debt persist, leading to further correction. Key monitoring indicators are the scale of data center infrastructure orders and additional disclosures regarding vendor financing.

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