NVIDIA Also Turns to Debt... "Plans to Issue $20 Billion in Corporate Bonds"

[Financial News]  


On the 15th local time, NVIDIA disclosed plans to issue a large-scale corporate bond for the first time in five years.
According to CNBC and other foreign media outlets, NVIDIA reported to the U.S. Securities and Exchange Commission (SEC) that it would issue investment-grade corporate bonds.
The company did not specify the amount, but CNBC, citing sources, said the offering would be worth about $20 billion, or roughly 30 trillion won.
This is NVIDIA's first corporate bond issuance in five years since 2021.
Earlier this year, NVIDIA said it could raise up to $25 billion through unsecured commercial paper.
Despite the bond plan, NVIDIA shares closed at $212.45, up $7.26, or 3.54%.
The move showed that even NVIDIA, which has dominated the AI semiconductor market and reaped huge profits, is not immune to the massive wave of AI investment.
Big Tech companies focused on AI have already been raising large sums through corporate bonds and new share issuances.
Meta Platforms Inc. issued $30 billion in corporate bonds in October last year and completed a $25 billion bond sale last month after raising its AI capital expenditure cap for this year to as much as $145 billion.
Alphabet Inc. issued $17.5 billion in dollar-denominated corporate bonds and $6.5 billion in euro-denominated bonds in November last year, then raised another $20 billion through senior notes in February. The company has raised more than $55 billion since last November. Earlier this month, it also issued $85 billion in convertible bonds (CB) that can be converted into shares.
Last week, AI server maker Super Micro Computer, Inc. (SMCI) unveiled plans for a $7 billion CB offering.
Amazon.com, Inc. said last week that it plans to raise about $10 billion in Canada through a corporate bond sale, following about $54 billion raised earlier this year through bond offerings in the United States and Europe.
NVIDIA currently has about $7.5 billion in long-term debt and $1 billion in short-term debt outstanding. Its last issuance was in 2021, when it sold corporate bonds maturing in 2031 and raised $5 billion. At the time, annual revenue stood at $27 billion. Last year's revenue reached $216 billion.

dympna@fnnews.com Song Kyung-jae Reporter