Corporate bond research firm Gimme Credit has initiated coverage of NVIDIA’s (NASDAQ) 2030 corporate bond issue with a buy recommendation, citing the company’s robust performance in the AI market. Nvidia, which dominates the GPU market with over 85% share, saw its revenue triple in the fiscal first quarter due to high demand for its Hopper GPU computing platform.
Analysts expect Nvidia’s revenue to more than double in the second quarter and for the entire fiscal year, driven primarily by its data centre market. This segment, serving hyperscale cloud providers, contributes over 85% to the company’s total revenue. Nvidia’s financial health is strong, with nearly $27 billion in free cash flow in fiscal 2024, projected to rise to $58 billion this year. The company’s low leverage ratio of 0.3x is expected to drop to 0.1x.
Despite competition and potential export control restrictions in China, Gimme Credit remains confident in Nvidia’s continued revenue growth and operating margin expansion. The 2030 bond issue is trading at a spread of +36, reflecting this confidence.
