Nvidia (NVDA) shares experienced a slight decline following reports that the chipmaker plans to enter a 16-year lease for a major data center in Storey County, Nevada. The project, designed to secure dedicated infrastructure for AI workloads, is being financed through a US$3.8 billion junk bond issuance that attracted strong investor demand, leading to an increase of US$150 million in the offering size. The bond targets an approximate yield of 6%.
The proposed data center, owned by Tract Capital's Fleet I fund, is expected to have a total capacity of 200 megawatts. Tract Capital is anticipated to contribute about US$620 million in equity, partially offset by the debt proceeds. JPMorgan Chase is leading the bond offering, with Morgan Stanley serving as co-manager, and the deal is slated to price on February 13.
A legal ruling in Storey County in 2025 cleared a path for the project, clarifying that a land covenant did not restrict single-tenant, wholesale, or dedicated cloud facilities, which Nvidia's lease represents. This move marks a strategic shift for Nvidia, which has historically relied on cloud providers like AWS and Microsoft Azure, toward gaining more control over facility design, operational costs, and long-term access to specialized AI hardware infrastructure.
Concurrently, Nvidia stock tumbled over 2% in a separate trading session as investors engaged in profit-taking. The pullback fit a pattern of momentum stock behavior after a strong stretch that had made Nvidia a consensus "crowded" winner. Analysts described the weakness as a positioning reset rather than a fundamental break, with investors weighing rich expectations against a market backdrop sensitive to rates and inflation data.
