Key Stats for Nvidia Stock
- Price change for Nvidia stock in the last 6 months: 34%
- $NVDA Stock Price as of Oct. 1: $231
- 52-Week High: $237
- $NVDA Stock Price Target: $328
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What Happened?
Nvidia’s (NVDA) $500 billion financing plan is facing pushback on Wall Street. Banks and investors are asking how much its advanced AI chips are really worth. Many think the answer is less than Nvidia says.
The plan uses chips as loan collateral. That lets AI developers get access to Nvidia’s computing power.
Nvidia said some deals could include a residual value guarantee of no more than 25%. Some lenders want more than that.
Three banking sources told Reuters that Nvidia may need to guarantee all its deals. Another option is to back the loans with payments from investment-grade customers, such as a big tech firm.
The biggest gap is chip life. Nvidia says top GPUs can earn revenue for a decade. Banks usually spread GPU costs over three to four years.
Tony Trzcinka of Impax Asset Management said Wall Street is “much more conservative.”
Nvidia pushed back. It said its AI compute is a “productive, durable and fungible asset.”
It also pointed to studies showing cloud firms stretching server lives to five or six years.
Lenders say there is not enough history yet to judge long-term value. Still, demand to finance the deals remains high.
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What the Market Is Telling Us About Nvidia Stock
For Nvidia stock, this is a question about trust in the long-term value of its chips. If lenders demand more guarantees, Nvidia may have to take on more risk.
The business itself is strong. Nvidia reported $96 billion in revenue last quarter. It expects $108 billion next quarter.
Management also expects about 70% revenue growth in fiscal 2028. It says supply, not demand, is the limit.
Nvidia also said it has invested nearly $50 billion in frontier AI labs. It expects the labs it supports with its balance sheet to account for about a quarter of its business next year.
That is why lender views matter to Nvidia stock.
Margins are another point to watch. Nvidia expects gross margin to fall to 71% to 72% in Q4. It blames higher memory costs.
Nvidia stock may now react to changes in financing terms. Investors will also watch whether lenders accept a longer life for these chips.
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So what is Nvidia stock actually worth?
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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!
