Wall Street is increasingly scrutinizing NVIDIA's off-balance-sheet credit exposure, which is projected to approach $200 billion by the end of 2028. The focus comes as investors weigh the company's expanding role in financing artificial intelligence infrastructure, overshadowing the upcoming second-quarter earnings release.
Analysts at Bank of America and Morgan Stanley highlight the significance of NVIDIA's commitments, including a $105 billion guarantee for OpenAI's Ohio datacenter lease over 20 years. The company also helped structure a $500 billion financing platform with six major U.S. financial institutions to support clients building AI infrastructure. NVIDIA's current leverage ratio stands at a modest 0.4x, but analysts caution that the scale of these commitments introduces new risks.
The broader AI credit market has seen debt issuance surge to $220 billion in 2026 through early August, according to BNP Paribas data cited by Reuters. This represents a $207 billion increase compared to the same period in 2025. Technology sector credit spreads have widened to 89 basis points over Treasuries, 9 basis points above the broader investment-grade market, reflecting growing concerns about sector-specific risks.
NVIDIA's second-quarter revenue is projected to nearly double year-over-year to $92.18 billion, driven by a more than twofold increase in data center sales. The consensus for the third quarter sets revenue at $104.20 billion, implying an 82.8% year-over-year rise. Despite these strong growth expectations, options traders have priced in a 5.4% potential swing in either direction post-earnings, suggesting significant volatility expectations. This implied swing is lower than the 6.5% recorded before the May results and below the 7.4% historical average over the past 12 quarters.
BofA analyst Vivek Arya noted that investors are particularly focused on NVIDIA's potential disclosure of multi-year off-balance-sheet commitments related to supply guarantees, energy, models, and demand. Arya emphasized that quantifying these liabilities would not eliminate the risks associated with AI expansion but would allow the market to better price in what is viewed as a depressed valuation. Morgan Stanley's Lindsay Tyler initiated credit coverage of NVIDIA with a neutral view, citing the company's exceptional growth as both a strategic financing tool and a source of new risks that remain too opaque and nascent to fully assess.
NVIDIA shares rose 2.2% on Tuesday, ending a seven-session losing streak, though the stock closed down 0.98% at $214.72 in regular trading. After-hours trading showed a 0.68% gain to $216.19.
