Morgan Stanley gave Nvidia its first credit rating and assigned a neutral view. According to Sina Finance, the bank said the chipmaker’s use of its balance sheet to fund the broader artificial intelligence ecosystem introduces risks that traditional metrics cannot capture.

Lindsay Tyler, a technology industry credit research analyst at Morgan Stanley, wrote that the firm is neutral on Nvidia’s credit rating because its extraordinary growth turns balance-sheet strength into a strategic AI financing tool while also creating new risks. She added that the situation remains early, opaque, and too large to step into.

Morgan Stanley said Nvidia is more deliberately providing support through residual value structures tied to partnerships worth more than $500 billion, shell residual value guarantees, and revenue-sharing and credit-support models. Nvidia recently announced partnerships with six financial giants aimed at raising more than $500 billion for AI infrastructure, with Nvidia acting as the lead partner rather than the funding provider.

The bank said traditional leverage measures increasingly understate the credit picture because ecosystem support exists in contingent, contractual, and potential off-balance-sheet forms. It expects total credit exposure to reach $200 billion by the end of 2028, including about $170 billion of adjustments and contingent obligations tied to these mechanisms.

Morgan Stanley also calculated leverage at about 0.4 times and free cash flow after shareholder returns at more than 100% of debt; under a stagnant-growth scenario, leverage and free cash flow would be about 0.7 times and 15%, respectively. The bank said spread compensation has improved after widening recently, but advised patience and pointed to more than $1 trillion in GPU- and XPU-related financing as the main uncertainty.

Nvidia is scheduled to report fiscal 2027 second-quarter earnings after the U.S. market close on August 26. Cantor Fitzgerald Senior Managing Director and technology analyst CJ Muse said Nvidia’s equity and revenue-sharing arrangements, its plan with leading financial firms to raise $500 billion for AI infrastructure, and deals that provide computing power to AI startups in exchange for equity have turned its graphics processing units into a financeable and increasingly substitutable asset class.