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Nvidia is doubling down on the artificial intelligence infrastructure boom with a plan to help mobilize as much as $500 billion in third-party capital, drawing participation from major financial firms including Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR.
The initiative has sparked debate on Wall Street. Investor Michael Burry described the plan as a “stunt,” while other market observers have questioned whether increasingly interconnected AI financing arrangements could create circular investment risks. Nvidia, however, argues that the structure could transform AI compute infrastructure into an investable asset class.
Morgan Stanley is firmly on the bullish side. Analysts led by Joseph Moore maintained Nvidia as their top semiconductor stock pick, arguing that strong demand for computing capacity supports the strategy.
The bank believes Nvidia’s approach of supporting neocloud investments while participating in revenue could create valuable recurring income with relatively limited downside. Minority investments across multiple cloud service providers could also make Nvidia’s long-term earnings more predictable while strengthening its position as the dominant AI computing platform.
Morgan Stanley estimates the four largest U.S. hyperscalers could add roughly 25 gigawatts of computing capacity in 2027, excluding Tensor Processing Units. If the neocloud market eventually reaches a similar scale and generates about $20 million in revenue per megawatt, annual revenue across the ecosystem could approach $500 billion.
The potential impact on Nvidia earnings could be substantial. Morgan Stanley estimates that if Nvidia captured one-quarter of that opportunity as high-margin revenue, its fiscal 2028 EBIT forecast could see approximately 60% upside, while fiscal 2029 estimates could rise around 25%, even without increasing initial Nvidia chip sales.
A more conservative expansion of just 2–5 gigawatts could still deliver roughly a 10% boost to Nvidia EPS, according to the analysts.
Morgan Stanley also expects broader AI infrastructure spending to reinforce Nvidia’s position as the industry’s de facto computing standard, particularly as the company approaches its major Vera Rubin AI platform product cycle.
