Nvidia Tightens Its Grip on AI Infrastructure With a $500 Billion Backlog and a New Financing Model

Nvidia is no longer content with simply selling chips. The company is rewriting its revenue playbook, moving from upfront hardware sales to a model where it finances entire data centers in exchange for a slice of partners’ recurring cloud income. All of this unfolds against the backdrop of a half-trillion-dollar order book that guarantees near-full factory utilization well into 2026. The stock, however, has been treading water.

Shares closed the week at €171.98 in Frankfurt, up 1.09% on Friday but down 7.16% over the past month. Year-to-date gains stand at a modest 6.75% — a far cry from the triple-digit rallies of previous years. The 30-day annualized volatility of 38.25% underscores persistent investor jitters.

Revenue Sharing Replaces Upfront Payments

Under the new program, approved by Chief Financial Officer Colette Kress, Nvidia supplies graphics processors without requiring partners to pay upfront. In return, it books the direct product revenue plus an ongoing royalty tied to the partner’s cloud sales. The aim is to lower the barrier for smaller “neocloud” startups and large-scale AI factories alike.

Two early projects illustrate the scale. Firmus Technologies is building a “DSX AI Factory” on the Indonesian island of Batam, a campus with 360 megawatts of power capacity that will house up to 170,000 Nvidia GPUs. Separately, Sharon AI is installing as many as 40,000 Grace-Blackwell GB300 systems in Australia. Combined, those contracts alone account for up to 210,000 processors — a token of the $500 billion order backlog that stretches across the Blackwell and Rubin chip generations.

Expanding Beyond the Data Center

Nvidia is also diversifying geographically and thematically. The company invested $1 billion in Nokia, acquiring a 2.9% stake at $6.01 per share, with the goal of embedding AI directly into mobile networks — a technology known as AI-RAN. T-Mobile plans to field-test the solution in the second half of 2026.

On the security front, Nvidia has taken a stake in Verkada, a specialist in physical AI surveillance. The partnership has already boosted video-search accuracy by 68%, according to the company. To lead global sales of these expanding product lines, Nvidia hired Nicholas Parker, a long-time Microsoft executive, as its new Executive Vice President.

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Further afield, Project “Space-1” envisions data centers in low Earth orbit; the company is actively recruiting senior software architects for the satellite infrastructure.

Market Reaction and Analyst Sentiment

Despite the strategic moves, the stock remains 15.07% below its 52-week high of €202.50, set on May 14. It trades just 4.73% above its 200-day moving average of €164.21, offering thin cushion if selling pressure returns. The 14-day Relative Strength Index sits at a neutral 43.8, leaving room for a move in either direction.

Analyst opinion is broadly bullish. Thirty-seven experts rate the shares a strong buy, with an average price target of $309. Baird sees potential upside of more than 155%. Evercore also points to an $80 billion share buyback program and steady dividends as additional supports. However, on July 4, Wall Street Zen downgraded the stock from “Strong Buy” to “Buy,” acknowledging the recent consolidation.

What’s Next

Nvidia’s fiscal first quarter delivered revenue of $81.6 billion, up 85% year-over-year. The market expects roughly $91 billion for the current quarter. For fiscal 2026, analysts project total sales of nearly $216 billion, with about $194 billion coming from the data-center segment alone.

Key milestones include Nokia’s earnings report on July 23, which could offer the first read on AI-RAN progress. Meanwhile, CEO Jensen Huang is scheduled to attend a high-level trade summit where potential easing of export restrictions on AI hardware to China may be on the agenda. Any such development would add fresh fuel to a stock that, for now, is waiting for its next catalyst.