Nvidia stock strong as Taiwan flags overbuilding risk

Nvidia shares climbed 4% to close at $210.96 on Friday, extending a weekly gain of about 8.3% and leaving the stock roughly 13% higher for 2026. The rise came as Taiwan’s central bank governor cautioned about financial risks tied to rapid AI infrastructure buildouts.

Governor Yang Chin-long told lawmakers on July 9 that AI is producing measurable economic growth but that excessive borrowing by technology firms could encourage speculative investment and overbuilding. At the parliamentary hearing, he commented, “AI is driven by real growth potential,” while warning about over-expansion caused by too much leverage.

Taiwan’s remarks drew attention because Taiwan Semiconductor Manufacturing Co. is a major chipmaker used by Nvidia and other global technology companies. Nvidia and several cloud operators rely on Taiwan-based manufacturing and supplier networks to produce advanced processors and related components.

Nvidia sells processors, networking equipment and systems used to build AI data centres. Cloud operators and hyperscalers typically invest in chips, specialised networking gear, buildings, power and cooling before those data centres produce significant revenue. If those investments generate weak cash flow or customers take on high debt, companies could delay new projects, extend the use of existing hardware or increase reliance on custom chips that cost less.

Bank of America analyst Vivek Arya reiterated a Buy rating and a $350 price target, writing that Nvidia can sustain about 65% to 70% of long-term AI capital spending and that the company’s Rubin platform should command higher prices than earlier generations, supporting gross margins in the mid-70% range despite rising memory costs. Goldman Sachs analyst James Schneider maintained a Buy rating with a $285 target, noting Nvidia trades at under 14 times his forecast for 2027 earnings and projecting revenue could rise about 55% to roughly $635 billion next year after accounting for gains by custom AI chips and rival processors.

The stock’s recent gain followed a period of underperformance; Nvidia was up about 8.3% for the week. Analysts say competition from custom chips and rival processors is included in current valuations, and they list financing and timing of customer buildouts as factors that could affect order patterns for data-centre systems and components.

Taiwan’s central bank framed its concern as a funding and timing risk for the industry rather than a problem with specific products. The governor did not predict a collapse in AI demand or single out any firm by name.