Nvidia Drew DOJ Questions and Weighed Backing Debt for an Anthropic Data Center in One Week. Here’s Why Its Cash Flow Matters More

Key Stats for Nvidia Stock - Current Price: $204.64 - Target Price (Mid): ~$500 - Street Target: ~$329 - Potential Total Return: ~145% - Annualized IRR: ~23% / year What Happened? Nvidia (NVDA) faced a regulatory question about how it sells and a report on how it finances customers within two days. On October 28, Reuters reported that the Justice Department has asked whether the $12.93 billion Hugging Face deal would let Nvidia capture a fundamental distribution point for AI. After the October 29 close, The Information reported that Nvidia is in talks to guarantee billions of dollars of debt for an Nscale data center that Anthropic plans to use. Its July-quarter cash flow, which came in under half the Street’s estimate, says more about what that reach costs. Shares fell 1.17% on October 28 and 4.22% to $204.64 on October 30, the first session after the Nscale report. That day also brought Intel’s 28.58% plunge and Amazon’s results, which sent the Philadelphia Semiconductor Index down 7.22%, so the Nscale news can’t be separated from the selloff. A Probe Into Allocations, a Guarantee for Anthropic The sharper question in the Reuters report sits in a broader conduct probe that began under President Joe Biden. Officials have explored whether Nvidia offered larger allocations of AI chips to customers that bought its networking equipment and Groq processors. Reuters noted that investigations are not evidence of wrongdoing and may not lead to any action. Nvidia expects the Hugging Face deal to close in the first half of 2027. That matters because Nvidia sells far more than chips. At Goldman Sachs’ Communacopia conference on September 10, CEO Jensen Huang described the full platform customers buy: “You come in, you can install the whole thing, add our software to it and be basically up in a couple of weeks and get to work.” The Nscale guarantee would back debt for a 460-megawatt data center Anthropic plans to use. Nothing is signed, and terms could change. Anthropic agreed in August to spend $45 billion renting capacity from Nscale’s West Virginia campus, and a second deal of similar size is under discussion. The reports do not say which project the support covers. On Anthropic, Huang said Nvidia was “happy to invest in them and help them” and that “our share of Anthropic is growing very quickly.” Of the companies Nvidia backs, he said “we see their offtake because that financing doesn’t come together without the offtake.” TIKR tracks 62 analysts on Nvidia. How many say “Buy”? See the full breakdown of Buy, Hold, and Sell ratings on Nvidia, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Nvidia’s Analyst Ratings July’s Cash Shortfall In the quarter ended July 26, revenue of $96.2 billion beat the Street by 4.4%. Free cash flow came in at $21.4 billion against a $47.5 billion estimate, and operating cash flow fell to $24.1 billion from $50.3 billion the quarter before. The earnings release shows where the cash went: rising receivables absorbed $22.3 billion and inventory $5.8 billion in the quarter. That money is tied up, not lost, but it has to come back as cash. TIKR Advanced Model Analysis - Current Price: $204.64 - Target Price (Mid): ~$500 - Potential Total Return: ~145% - Annualized IRR: ~23% / year - Revenue Growth (Mid): ~25% / year over the model’s 2026 to 2036 forecast - Net Income Margin (Mid): ~53%, against 56.9% over the past year - Next Two Quarters (Street): ~$109 billion of October-quarter revenue and ~$124 billion of January-quarter revenue - Gross Margin Guide: 71% to 72% for the January quarter Upside comes if Vera Rubin supply beats those estimates. The risk is that the model values earnings, and in the July quarter operating cash flow covered about 40% of GAAP net income of $59.7 billion. Conclusion Nvidia reports on November 17 against revenue guidance of $108 billion, plus or minus 2%. Operating cash flow is the figure to watch. A rebound toward net income would make July look like timing. Another quarter near 40%, plus a signed Nscale guarantee, would make financing the story. So what is Nvidia stock actually worth? TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Nvidia could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use. Disclaimer: Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!