Roughly a quarter of Nvidia's expected fiscal 2028 business comes from AI labs the company itself plans to back financially, management says. That backing, combined with a fast-growing equity portfolio and slower customer payments, raises a question about how much of Nvidia's growth rests on money the company put there first.
Why Nvidia backs its own customers
As a hypothetical example of how this kind of support works, a chipmaker invests in a young customer, and that customer then spends the money buying the chipmaker's products. The sale is real, but the chipmaker's own money sits on both sides of it, and management said on the fiscal Q2 2027 call that some will call Nvidia's support circular financing.
Management says a surge in AI demand is driving a global buildout of computing infrastructure, and it points to revenue-sharing deals with cloud partners. Those deals can expand Nvidia's addressable market and create a recurring revenue stream tied to usage, management says.
How big the support has become
Nvidia has already invested nearly $50 billion in frontier AI labs, according to management. For one AI lab, it will provide credit support for nearly 2 gigawatts of computing capacity, and with some cloud partners it guarantees a minimum level of revenue on part of a facility's capacity.
The lab investments sit inside a broader expansion: Business Insider reported that Nvidia's overall equity portfolio has reached $99 billion, up from roughly $7 billion in summer 2025. Meanwhile, days of sales outstanding — the average time to collect cash after a sale — increased to 60 days, which management said reflects extended payment terms for large purchases by certain investment-grade customers, shipped over multiple quarters.
What the stock's price already assumes
Nvidia stock trades at 28.1 times its past year's earnings, against 22.5 times for the S&P 500, and that multiple sits in the bottom tenth of Nvidia's own 10-year range. The price likely assumes growth holds up and that the backed customers keep paying, management says, pointing to the size of customers' commitments as support.
OpenAI's existing and planned commitments represent about 12 gigawatts of Nvidia computing, with deployments committed through 2030. Nvidia's own finances remain strong, however: its debt is just 0.7% of its market value, versus 21% for the S&P 500 as a whole.
Roughly a quarter of expected fiscal 2028 business comes from AI labs Nvidia plans to back, and that share is a key risk factor for investors to monitor. Nvidia's next update comes at its fiscal Q3 2027 earnings call on November 17.
Source: Trefis via Yahoo Finance
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