Nvidia reported quarterly revenue of $96.2 billion, with Data Center sales reaching $89 billion. The company provided guidance for approximately $108 billion in revenue for the current quarter. Following the earnings report, Nvidia shares initially fell about 3% before turning higher during the conference call.

The company is increasingly utilizing its balance sheet to support the AI industry. Nvidia's broader equity investments, including public and private holdings, totaled roughly $99 billion at the end of July, rising from less than $100 million in early 2020. The portfolio includes stakes in several companies: Intel (INTC), CoreWeave (CRWV), Coherent (COHR), Nokia (NOK), Synopsys (SNPS), and Nebius (NBIS).

CEO Jensen Huang expressed satisfaction with the scale of these investments, stating, regarding Nvidia's investments in AI labs.

Financing AI customer growth

Nvidia CFO Colette Kress noted that frontier AI labs face "extraordinary demand" for computing power but are "growing faster than what their balance sheets and credit profiles can support." Kress indicated that AI labs requiring the use of Nvidia's balance sheet could account for approximately one-quarter of the company's business next year.

To support these customers, Nvidia has implemented several financial strategies:

• Extended Payment Terms: The company provides some large customers up to one year to pay for data center purchases. Consequently, accounts receivable rose to $63.1 billion, and the average collection time increased to 60 days from 45 days.
• Revenue Guarantees: For certain AI cloud providers, Nvidia guarantees a minimum level of revenue to help them secure financing. Under this model, Nvidia receives a cut if revenue exceeds the established floor. Kress stated,

Nvidia disclosed as much as $108.5 billion in guarantees. Of that total, $105 billion is tied to the SB Energy data center buildout for OpenAI. This support is phased in as nine data centers come online starting around fiscal 2029 and decreases as OpenAI makes payments.

Infrastructure investment strategy

Nvidia is attempting to attract outside capital for AI development, reporting preliminary agreements with large investors intended to channel more than $500 billion into AI infrastructure. The company views AI infrastructure as an "investable asset class" and aims to make projects easier to finance rather than funding the entire boom itself.

The company's investment portfolio has begun to impact its earnings, with gains on investments contributing $7.8 billion to income during the quarter. During the same period, Nvidia returned approximately $25.8 billion to shareholders through dividends and buybacks, exceeding its free cash flow of $21.3 billion. The company also issued $25 billion in debt, though there was no indication that this borrowing was used to fund buybacks.