BofA Sticks with Buy on NVDA Amid $105 Billion AI Commitments

BofA Securities has reaffirmed its Buy rating on Nvidia stock (NVDA) after meeting with senior management to discuss the company's $105 billion OpenAI commitments.

The firm believes Nvidia is committed to securing chip supply, land, power, and infrastructure for frontier labs and neo-clouds, a strategy aimed at diversifying the company beyond public hyperscalers building custom chips.

BofA cited solid GPU rental rates, compute scarcity, and Nvidia's free cash flow generation as factors supporting the commitments, but noted risks if AI demand slows, which could pressure both Nvidia's growth rate and balance sheet.

The firm expects Nvidia to provide more disclosure around off-balance-sheet commitments on August 26 earnings.