TLDR
- Nvidia stock rose 0.9% in premarket trading to $219.32 on Wednesday, looking to recover from a 3% drop earlier this week.
- CEO Jensen Huang said Nvidia’s financing exposure may be limited to a residual-value support mechanism of up to 25% per opportunity.
- Nvidia’s credit default swaps had risen to their highest level this year over fears the company was guaranteeing debt for AI chip buyers.
- Nvidia partnered with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to mobilize over $500 billion in AI infrastructure financing.
- Wall Street is also watching Nvidia’s emerging CPU business, with Huang projecting $20 billion in CPU revenue this year alone.
Nvidia stock climbed 0.9% to $219.32 in premarket trading Wednesday, looking to reverse a 3% slide earlier in the week.
The bounce came after CEO Jensen Huang moved to calm fears around the company’s exposure to AI-related debt financing.
Nvidia’s credit default swaps had risen to their highest level this year. The concern centered on Nvidia guaranteeing financing for companies buying its AI chips, including a reported $250 billion financing deal being negotiated with OpenAI.
Huang addressed the issue directly in a post on X. He said Nvidia may provide a residual-value support mechanism for up to 25% of any opportunity, assessed on a project-by-project basis. That appeared to put a ceiling on the company’s financing exposure, which had been left unclear.
The move came days after Nvidia announced a partnership with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to establish AI infrastructure financing platforms, targeting more than $500 billion in mobilized capital. That announcement had raised fresh questions about so-called circular financing.
Hyperscalers including Alphabet, Amazon, Meta, and Microsoft have taken on heavy debt to fund AI infrastructure. The cost to insure that debt has risen in recent months, and Nvidia had been caught in the same wave of concern.
CPU Business Quietly Growing
While the debt story has dominated headlines this week, investors are also watching a newer part of Nvidia’s business heading into its fiscal Q2 2027 earnings on August 26.
Last quarter, Nvidia launched its Vera CPU, built specifically for agentic AI workloads. Huang told analysts the move opens up a $200 billion total addressable market, and Nvidia expects around $20 billion in CPU revenue this year.
Intel CEO Lip-Bu Tan has said the ratio of CPUs to GPUs used for AI inference has already shifted from 1:8 to 1:4, and could move toward parity. Bank of America analysts projected the CPU market could grow fivefold from $35 billion in 2025 to $170 billion by 2030.
$1 Trillion GPU Target in Focus
Nvidia’s data center division generated nearly $194 billion in fiscal 2026. Wall Street consensus estimates, per Visible Alpha, put data center revenue at $368 billion in fiscal 2027 and $531 billion in fiscal 2028.
Huang has previously said he expects Blackwell and Vera Rubin GPU platforms to combine for $1 trillion in sales between 2025 and 2027.
Investors will be watching whether those projections hold when Nvidia reports earnings on August 26.
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