S&P Global Ratings upgrades Nvidia to ‘AA’ from ‘AA-,’ citing explosive AI-driven growth despite key supply and execution risks.
- S&P Global raises Nvidia’s revenue forecast to $394 billion (FY27) and $544 billion (FY28) on strong AI demand.
- Firm says it expects free operating cash flow to jump from $97 billion (FY26) to $276 billion (FY28).
- Risks include TSMC dependency and AI capex reliance on capital markets.
S&P Global Ratings has upgraded Nvidia (NVDA) to ‘AA’ from ‘AA-’, pointing to stronger-than-expected business performance driven by accelerating AI demand. The firm also raised all issue-level ratings on the company’s debt while keeping the short-term rating at ‘A-1+’.
The outlook remains stable, reflecting expectations of continued performance improvement over the next two years.
The NVDA stock closed the regular session on Thursday up 2.22% and extended the gains in after-hours trading. At the time of writing, shares were slightly higher by 0.03%.
AI Growth Forecast
S&P expects Nvidia’s revenue to surge sharply, projecting $394 billion in fiscal 2027 and $544 billion in fiscal 2028, up from $216 billion in fiscal 2026. The fiscal 2027 projection is ahead of the consensus estimates of $392 billion, according to Fiscal.ai
The upgrade is based on what it calls “insatiable demand for AI systems,” with data center infrastructure growth significantly exceeding earlier expectations.
“We expect S&P Global Ratings-adjusted EBITDA margins to strengthen to approximately 68% over the next two years from 65% in fiscal 2026,” said the firm in a note.
The report also highlights Nvidia’s transition to its Blackwell GPU platform, with a clear roadmap toward the Rubin architecture expected in the second half of 2026. This rapid product cadence, spanning Hopper, Blackwell and Rubin, is seen as a key factor reinforcing its leadership in AI chips and sustaining its “competitive moat and pricing power,” according to S&P Global.
Free operating cash flow is projected to rise from $97 billion in fiscal 2026 “to $196 billion in fiscal 2027 and $276 billion in 2028.” The firm also noted strong liquidity, with $81 billion in cash and securities versus $8.5 billion in debt.
Shareholder returns remain a priority, with $80 billion added to buyback authorization and dividend payout increased sharply in May 2026 to $0.25 per share (about $24 billion annually) from $0.01 per share (about $1 billion annually).
Risks Still On The Radar
Despite the bullish outlook, S&P Global flagged a few risks, including reliance on Taiwan Semiconductor Manufacturing Company (TSMC) for advanced chip manufacturing.
“If TSMC’s manufacturing capacity proves insufficient to meet Nvidia’s demand or it is unable to maintain its manufacturing leadership over other foundries, this could impair Nvidia’s ability to maintain its AI infrastructure market leadership,” said the firm.
S&P said over 90% of TSMC’s wafer capacity is in Taiwan, creating risks from geopolitics, natural disasters and utility shortages. It also expects TSMC to keep its most advanced technologies in Taiwan, meaning “Nvidia will continue to rely on those fabs for its most advanced products.”
It also said that AI infrastructure demand is increasingly tied to capital market conditions and energy availability, both of which could impact future growth visibility.
NVDA Stock: What Retail Thinks
On Stocktwits, retail sentiment around NVDA was ‘bearish,’ unchanged in the last 24 hours, while message volume was ‘low.’
In the past 12 months, NVDA stock has gained 43%.
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