S&P Raises Nvidia Rating, Forecasts $276B Cash Flow, Flags TSMC Risk
TSM•S&P Global Ratings upgraded Nvidia’s rating to AA from AA- and projects its free operating cash flow will jump from $97 billion in fiscal 2026 to $276 billion by fiscal 2028. The report highlights Nvidia’s reliance on Taiwan Semiconductor Manufacturing Company for advanced chip production as a key risk.
1. Nvidia Forecast and Ratings Upgrade
S&P Global upgraded Nvidia’s credit rating to AA from AA- and forecasts free operating cash flow to rise from $97 billion in fiscal 2026 to $196 billion in fiscal 2027 and $276 billion in fiscal 2028. Revenue projections climb to $394 billion in FY27 and $544 billion in FY28.
2. TSMC Dependency Highlighted
The report flags Nvidia’s reliance on Taiwan Semiconductor Manufacturing Company for advanced chip fabrication as a primary risk, noting that any production bottlenecks at TSMC could constrain Nvidia’s rapidly growing AI infrastructure business.
3. Implications for TSMC’s Operations
Accelerating AI demand may drive increased wafer orders at TSMC, potentially prompting capacity expansions and higher capital expenditures. However, elevated dependency on a single major client could heighten TSMC’s exposure to demand fluctuations in the AI market.
