Not long ago, Nvidia was known mainly as a chipmaker. Today, it is the world’s most valuable company, worth $5.39 trillion – more than Apple, Alphabet, Microsoft and Amazon. Investors are increasingly treating it as one of the safest companies in the world.
Its stock has risen over 62% in the past year alone, powered by the global AI boom. But recent market signals suggest investors may be rewarding Nvidia with something even harder to earn than a soaring share price: trust.
What is a CDS and why does it matter?
The company’s five-year Credit Default Swap (CDS) recently traded at roughly 38 basis points, slightly below the US government’s 40 basis points. A CDS is essentially insurance against a borrower failing to repay its debt. The lower the CDS, the safer investors believe that borrower is.
Historically, governments such as the US have been considered among the safest borrowers. Companies rarely trade anywhere near sovereign CDS levels. That is why Nvidia’s recent CDS reading attracted attention.
The numbers explain the trust
For the quarter ended April 26, 2026, Nvidia reported record revenue of $81.6 billion, up 85% year-on-year. Net income came in at $58.3 billion – more than three times higher than a year earlier.
Even more striking was the performance of its Data Centre division, which generated $75.2 billion in revenue, up 92% from a year ago. The company also comfortably beat Wall Street expectations.
The company reportedly carries only around $8.5 billion in debt while holding more cash than debt on its balance sheet and producing close to $100 billion in annual free cash flow.
More than an AI stock
Another reason investors have confidence in Nvidia is its unique position in the AI ecosystem. While many companies are trying to monetise AI applications, Nvidia sits at the infrastructure layer.
From OpenAI and Microsoft to Amazon and Meta, many of the world’s largest AI developers rely on Nvidia’s chips and systems. Investors increasingly view Nvidia not just as a technology company but as a critical supplier to the AI economy itself.
The dividend signal
Nvidia raised its quarterly dividend 25-fold, from $0.01 per share to $0.25 per share. It also announced an additional $80 billion share buyback authorisation. Both moves send a powerful message: management believes Nvidia’s cash-generating ability is sustainable enough to support significantly larger capital returns.
Can Nvidia keep this status?
The story is not without risks. Competition from rival chipmakers, geopolitical tensions involving China, potential AI spending slowdowns, and customers developing their own chips remain important threats.
Yet for now, the message from credit markets is clear. Nvidia is no longer being judged solely on how fast it can grow. It is increasingly being judged on how reliably it can endure. And that may be an even bigger achievement than becoming the world’s most valuable company.
