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Morning Edition · Tuesday, August 25, 2026Published at 1:15 AM EDT · New York
Chip Stocks Fall Before Nvidia's Results as JPMorgan Lends Against Private AI Shares
Micron dropped 5.8% on Monday, and the bank has shortened the horizon on loans backed by SpaceX stock while considering the same for Anthropic holdings.
Semiconductor shares fell more than the broader market on Monday. The Nasdaq Composite fell 0.76% to 25,980.19 and the S&P 500 slipped 0.28% to 7,652.86, while the Dow Jones Industrial Average rose 0.26% to 53,417.16, according to Washington Post market data. Micron Technology lost 5.8%, with Advanced Micro Devices down more than 3% and Broadcom more than 2%, as investors considered the new Iran sanctions and the Canadian tariffs ahead of Nvidia's earnings report on Wednesday. Analysts cited by the Motley Fool expect about $91bn in quarterly revenue and adjusted earnings of $2.09 a share, compared with $1.05 a year earlier.
Alongside that public market, a private lending market has grown around it. The Financial Times reports that JPMorgan has eased its approach to lending against shares in private artificial intelligence (AI) companies, shortening the time horizon over which SpaceX employees and investors can borrow against their stock, and considering the same treatment for Anthropic holdings. Credit extended against illiquid shares turns paper valuations into money that can be spent now, which is the same mechanism that amplifies both the rise and the fall of a cycle.
A separate, slower-moving constraint is physical. The South China Morning Post describes residents of Kota Damansara in Malaysia opposing a data center approved next to a community forest, one of several local disputes over land, water and power that now shape where AI infrastructure can be built in Southeast Asia.
Part of a tracked trend
AI Trade Derating
Concentration of index gains in a few AI-linked chip and platform stocks makes global equities recurrently vulnerable to sharp, correlated drawdowns whenever investors question the return on AI spending.
What this means
Two factors determine whether the current pace of AI capital spending continues. One is the credit that funds it. Lending against unlisted shares extends the cycle while creating a channel through which a drop in valuation can trigger a margin call. The other is physical siting, since data centers need land, water and grid connections that local governments in Malaysia and neighboring countries can withhold. Nvidia's results on Wednesday feed directly into the first factor, because a large share of stock index gains is concentrated in a small number of closely linked chip and platform companies.
What to watch
- Nvidia's guidance rather than its reported quarter, since forward orders show whether customers are still committing capital at this rate.
- How far other banks follow JPMorgan into lending against private AI equity, which measures how much leverage now sits behind unlisted valuations.
- Data center approvals and rejections in Malaysia, Indonesia and Vietnam, a practical limit on where AI infrastructure can physically be built.
Observations to monitor, not financial advice.
Source: Financial Times
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