Nvidia plans to mobilize up to $500 billion in potential investment for AI infrastructure through six institutional partners. Morgan Stanley says the structure could ease concerns over circular financing and could add more than 10% upside to fiscal 2029 earnings per share, while reiterating its Overweight rating and $288 price target.
Morgan Stanley analysts said Nvidia's plan to mobilize up to $500 billion in potential investment for artificial-intelligence infrastructure is a positive for the chipmaker's shares. The structure could ease concerns over circular financing while opening new recurring revenue streams, the analysts said.
Six partners, independent platforms
Nvidia announced the potential investment from six institutional partners to create independent compute financing platforms that could invest in AI factories. The partners will assess projects individually, while Nvidia may provide residual support of up to 25% of investments.
Morgan Stanley analysts said third-party decision-making and funding should reduce concerns that Nvidia is financing its own growth. The structure, they added, should also help drive demand for Nvidia's products and open revenue-sharing opportunities.
Upside to earnings, but added risk
The analysts estimated that a 35% revenue share above breakeven could provide more than 10% upside to Nvidia's fiscal 2029 earnings per share, depending on GPU pricing and deployment. They acknowledged risks, however, including additional credit exposure and potentially higher leverage across the AI ecosystem.
That $500 billion figure also represents potential investment rather than committed funding. Morgan Stanley nevertheless reiterated its Overweight rating and $288 price target, calling Nvidia its top semiconductor pick.
Source: Investing.com
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