Key Stats for Nvidia Stock
- Current Price: $221.97
- Target Price (Mid): ~$546
- Street Target: ~$329
- Potential Total Return: ~146%
- Annualized IRR: ~23% / year
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What Happened?
Nvidia (NVDA) closed at $221.97 on October 21, up 2.54%, a day after SpaceX (SPCX) said on its earnings call it is on track to bring roughly 200,000 Nvidia GB300s online “every month for the remainder of this year.” Chip stocks rallied broadly the same day, and Nvidia was hosting its GTC Berlin conference, so SpaceX was one catalyst among several.
The harder question is who pays for chips at that pace. SpaceX’s answer, still under negotiation, is debt likely backed by the chips themselves, the structure Jensen Huang pitched to investors in September.
Huang Wants Nvidia’s Chips to Secure Their Own Loans
The Financial Times reported on October 6 that SpaceX is seeking about $40 billion in loans and investment-grade debt to buy Nvidia chips, with Apollo Global Management (APO) expected to lead. A person familiar with the talks told CNBC the deal will likely use the GPUs as collateral. Bloomberg reported that the talks are early and could end without a deal.
Nvidia is a SpaceX shareholder as well as its supplier, having disclosed a stake worth about $21 billion at the end of June. Founder and CEO Jensen Huang told the Goldman Sachs Communacopia + Technology Conference on September 10 that Nvidia compute is “a computer that could be asset-backed. And so we can use it to secure loans.” In August, Nvidia signed memorandums with Apollo and five other financial firms to build platforms targeting more than $500 billion of outside capital, and Huang said “hopefully, most of that $500 billion is going to be asset backed.”
Debt secured by the chips lets buyers like SpaceX keep ordering without raising fresh equity. Huang told the same conference Nvidia “could grow 70% year-over-year” and called the upstream supply chain “very challenging.” Once supply catches up, the next limit is what customers can finance, and GPU-backed debt means Nvidia’s own balance sheet does less of that lending.
TIKR tracks 63 analysts on Nvidia. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Nvidia, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Nvidia’s Analyst Ratings
The Rent Math Lenders Have to Believe
Huang put Nvidia’s equipment for a 1-gigawatt data center at “probably like $60 billion,” about $10 billion a year over six years, and said, “the revenues per gigawatt right now is about $50 billion.” He added that “All the Ampere in the world are all rented out,” a chip architecture Nvidia launched in 2020.
Those are his estimates, not disclosed figures. The $50 billion is rental revenue before power, buildings, and interest, and in the same talk he valued Australia’s planned 2 gigawatts at $80 billion, so his per-gigawatt costs vary. If rental rates fall, so does the value of the collateral.
Nvidia carries part of that risk itself. TIKR data shows free cash flow of $21.40 billion in the July quarter, down from $48.59 billion a quarter earlier and below the ~$47.5 billion analysts expected. Nvidia’s CFO commentary tied the drop in operating cash flow to working capital and cash taxes, with days sales outstanding rising to 60 from 45 on extended payment terms for certain investment-grade customers. Its DSX Pod, unveiled October 21, targets time to revenue: Nvidia says the containerized racks can serve tokens in 14 days instead of six months, with deliveries expected from early 2027.
TIKR Advanced Model Analysis
- Current Price: $221.97
- Target Price (Mid): ~$546
- Potential Total Return: ~146%
- Annualized IRR: ~23% / year
The mid case’s inputs, set across a forecast running to 2036, assume revenue growth around 25% a year and net margins near 53%, even with gross margin guided down to 71% to 72% for the January quarter. The Street’s ~$329 mean target sits about 48% above the price, with 49 Buy, 10 Outperform, 2 Hold, 1 Sell and 1 No Opinion ratings. The primary risk is financing: if rental rates slide and lenders pull back, growth could fall short of the 70% Huang described. Upside comes if GPU-backed debt becomes routine and widens the pool of buyers. Downside comes if growth fades faster than the model assumes.
Conclusion
Nvidia’s third-quarter report, expected in mid-November, needs revenue at or above the $108 billion guide and a reaffirmed fiscal 2028 outlook. The SpaceX loan is the longer test: a close on GPU collateral at investment-grade terms, which the Financial Times expects in 2027, would show lenders accepting Huang’s pitch. Talks that stall would suggest lenders still price the chips as risky.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
