NVIDIA CEO's AI Expansion Play Wins Fans—But Financing Risks Raise Eyebrows

NVIDIA Corp. (NASDAQ: NVDA ) stock rose more than 1% in premarket trading Thursday as investor appetite for large-cap technology and semiconductor stocks improved.

Nasdaq futures gained 1.05%, while S&P 500 futures advanced 0.52%.

NVIDIA appeared to benefit from a broader risk-on move across growth stocks rather than any company-specific news.

The stronger futures market supported buying interest in large-cap technology names ahead of the opening bell.

Read Also: Michael Burry Warns Nvidia's 'Overreaching' Is Pushing Circular Spending to 'Biblical Proportions' Amid Surge in Credit Default Swaps NVIDIA’s AI Financing Push While Thursday’s rally was driven by improving market sentiment, analysts continue to debate whether NVIDIA’s increasingly active role in financing AI infrastructure could eventually introduce new risks.

The chipmaker has used its balance sheet to help accelerate AI infrastructure investment, including equity stakes in companies such as OpenAI and Anthropic.

Some analysts view those investments as strategically important, while others are becoming more cautious about financing arrangements tied to customer expansion.

Speaking on CNBC, Wolfe Research senior analyst Chris Caso said he supports NVIDIA’s equity investments because they help customers build the computing capacity needed to meet surging AI demand.

However, Caso said he is less comfortable with reported financing backstops that help customers raise capital, warning those arrangements could create future liabilities despite NVIDIA’s strong cash flow and balance sheet.

He said Chief Executive Officer Jensen Huang is working to eliminate financing bottlenecks that could slow AI infrastructure spending and noted that Broadcom Inc. (NASDAQ: AVGO ) is pursuing a similar approach.

Caso added that potential initial public offerings by OpenAI and Anthropic could improve transparency into their business models and reduce reliance on strategic financing from companies such as NVIDIA.

The discussion comes as some market participants have pointed to wider credit default swap spreads for NVIDIA following its expanded financial support for AI customers and infrastructure partners.

Critics have argued that such arrangements could create “ circular financing ” dynamics that artificially sustain demand, while supporters say the investments help address funding constraints and accelerate AI deployment.

Technical Analysis NVIDIA is trading about 5.2% below its 20-day simple moving average of $203.13 and about 7% below its 50-day simple moving average of $207.12.

The stock is also hovering near its 200-day simple moving average of $192.99, a level that traders often view as important long-term support.

The moving average convergence divergence (MACD) indicator remains below its signal line, suggesting upside momentum has weakened.

The moving averages present a mixed picture.

The 20-day average remains below the 50-day average, reflecting short-term weakness.

However, the 50-day average remains above the 200-day average, indicating the longer-term uptrend remains intact.

Key resistance sits near $214.

Key support is around $190.

Earnings And Analyst Outlook NVIDIA is scheduled to report earnings on Aug.

26.

Wall Street expects earnings of $2.07 per share, up from $1.04 a year earlier.

Analysts project revenue of $91.70 billion, compared with $46.74 billion in the prior-year quarter.

The stock trades at about 29.1 times earnings and carries a consensus Buy rating with an average analyst price forecast of $324.67.

Recent analyst actions include: KeyBanc raised its price forecast to $330 and maintained an Overweight rating on July 14.

China Renaissance i nitiated coverage with a Buy rating and a $319 price forecast on June 5.

Needham maintained its Buy rating and $270 price forecast on June 2.

Edge Rankings Edge rates NVIDIA highly for growth and quality, while assigning more modest scores for momentum and value.

NVIDIA has a momentum score of 32.53, a quality score of 97.98, a value score of 7.83 and a growth score of 98.62.

ETF Exposure NVIDIA is among the largest holdings in several exchange-traded funds, including: Global X NASDAQ 100 Covered Call ETF (NASDAQ: QYLD ), with a 9.66% weighting.

Sapient Quality Select ETF (NASDAQ: SQS ), with a 9.95% weighting.

REX AI Equity Premium Income ETF (NASDAQ: AIPI ), with a 9.74% weighting.

Because NVIDIA represents a large share of these funds, ETF inflows and outflows can influence demand for the stock.

Price Action NVDA Stock Price Activity: Nvidia shares were up 1.38% at $192.64 during premarket trading on Thursday, according to Pro data.