Wedbush Flags Near-Term Risks From Nvidia’s Alleged OpenAI Data Center Support

AI infrastructure spending is moving faster than anyone expected. Capital expenditure estimates for 2026 have risen to about $750 billion, which works out to 67% growth from last year. Forecasts for 2027 are already closing in on $1 trillion. With numbers that big, investors are starting to wonder whether all these data centers can actually get funded and built on time.

Nvidia Corporation (NVDA) is now caught up in that debate. Reports say the company may put up a credit backstop of as much as $250 billion for OpenAI’s planned data center project in Ohio. Wedbush says the deal introduces a near-term risk for Nvidia, though the firm still sees the bigger picture for AI infrastructure demand as positive over the long haul.

Can Nvidia turn this huge wave of AI demand into steady, properly financed growth? 

AI Demand Drives Record Financials

Nvidia sits right in the middle of the AI boom. It designs the high-performance GPUs and complete computing systems that run data centers, cloud services, and heavy AI workloads. The stock has been calmer than its big run last year. It is up 11.2% over the past 52 weeks and 6.9% so far this year.

On valuation it trades at a forward price-to-earnings ratio of 21.62 times, a bit under the sector average of 23.04 times, suggesting the market is starting to price in the strong earnings growth.

Nvidia has also stepped up returns to shareholders. It added an extra $80 billion to its share buyback program and raised the quarterly dividend from $0.01 to $0.25. The stock yields 0.15% a year with a payout ratio of just 0.70%, so there is plenty of room to raise it again. 

The latest numbers show the rapid pace in which the business is growing. Revenue hit a record $81.6 billion, up 85% from a year ago. Most of that came from the data center segment, which jumped 92% to $75.2 billion. Inside that, compute revenue reached $60.4 billion, up 77% year-over-year (YOY) and 18% from the prior quarter. Meanwhile, networking revenue soared 199% to $14.8 billion. Gross margins stayed strong at 74.9% on a GAAP basis and 75.0% non-GAAP. 

Earnings per share came in at $2.39 GAAP and $1.87 non-GAAP. Looking ahead, the company guided for $91.0 billion in revenue next quarter with margins still near 75%. That guidance leaves out any China data center compute sales, which shows both solid demand and the geopolitical limits still in play.

OpenAI Exposure Sparks Risk Debate

Nvidia is reportedly talking about putting up a roughly $250 billion backstop for an OpenAI data center project in Ohio. The Wall Street Journal called the potential guarantee one of the biggest financial moves yet in America’s AI boom, with Nvidia basically covering a large chunk of OpenAI’s data center spending.

Wedbush Securities says this creates a near-term risk for Nvidia. The firm points out that backing such a big OpenAI commitment brings balance sheet and concentration risks, especially if the project runs late or costs climb higher. Still, Wedbush sees the overall picture as positive for the long run because closer ties to OpenAI’s needs lock in Nvidia's role as the main supplier of AI computing power.

That exposes Nvidia to a clearer look at OpenAI’s multi-year demand and strengthens its spot as the key supplier. At the same time, the size of the guarantee adds balance sheet and concentration risks that investors are now balancing against the longer-term upside from ongoing hyperscaler and AI lab spending.

Analysts Stay Bullish Despite Concerns

Nvidia is set to report its next earnings on August 26, after the market closes. Analysts expect $2.01 per share for the current quarter, up from $0.99 a year ago. That works out to 103.03% growth. For the full fiscal year 2027, they are looking for $8.79, compared with $4.57 last year, or 92.34% growth.

Bank of America stuck with its “Buy” rating and raised its price target to $350 from $320. The bank pointed to Nvidia's ongoing lead in AI computing chips, even though the stock has trailed the wider market this year. It also noted that demand from big infrastructure projects still looks solid. 

HSBC took a similar view, holding its “Buy” rating and lifting its target to $325 from $295. That move was tied straight to heavy spending by the big cloud providers and the data center building boom that has pushed 2026 estimates toward about $750 billion.

The overall Street view matches that optimism. All 47 analysts covering the stock rate it a consensus “Strong Buy”. Their average price target is $304.32, which sits about 52.8% above current levels.

Conclusion

Nvidia’s OpenAI link adds a new layer of risk to an already huge AI story, but it does not change the broader setup that has kept the stock firmly in the market’s favorite camp. The near-term debate is really about funding, timing, and exposure, while the bigger picture still points to strong demand for AI compute and data center buildout. Shares are more likely to stay volatile in the short run, but the bias still looks upward as long as Nvidia keeps delivering the kind of growth and margins it has been posting.