Nvidia (NVDA) stock is picking up on Monday, up 2% during Monday’s trading session after falling half a percent in the last five days. Other AI stocks are also up, including INTC, AVGO and AMD. Nvidia’s stock is expected to rise according to several analysts if its potential $100B investment into OpenAI goes through. Nvidia CEO Jensen Huang said last week on a podcast that he expects ChatGPT developer OpenAI to be “the next multi-trillion-dollar” company. Thus, a potential investment would be crucial for Nvidia’s revenue to skyrocket.
OpenAI to Spur an NVDA Stock Boom?
Nvidia’s future growth is linked to OpenAI’s success, particularly its Stargate AI infrastructure project, a key industry investment. “While AI is powered by Nvidia, OpenAI could indeed be the most important company in terms of the trillions in value its vision is supporting right now,” wrote Melius Research analyst Ben Reitzes in a recent research note. “We aren’t very concerned about OpenAI’s ability to raise all this money (into a rate-lowering cycle), we just hope they (and their rivals) get the power they need to keep this going.” The Melius analyst predicts that OpenAI’s platform could generate well over $40 billion in annual advertising revenue, which could result in strong blowback revenue for NVDA.
Alternatively, the Nvidia/OpenAI deal could raise antitrust concerns, Andre Barlow, an antitrust lawyer with Doyle, Barlow & Mazard, said, according to a Reuters report, indicating the partnership may capture the Department of Justice’s attention. DOJ involvement could steer investors away from NVDA, sending shares lower.
Also Read: Robinhood HOOD up 229% YTD: Citigroup Raises Stock Forecast
Other analysts are optimistic about Nvidia (NVDA)’s potential, with all price targets above the current $178.19 closing price. Bernstein, with a strong historical price target accuracy of 94.19, suggests a $225 target, indicating a positive outlook on NVDA stock. At the time of writing, NVDA is trading near the top of its 52-week range and above its 200-day simple moving average. Its shares are nearing a flat base’s 184.48 buy point, and NVDA cleared its 50-day moving average earlier today.
On Thursday last week, Barclays became the latest to join a chorus of analysts turning bullish, giving Nvidia stock a price target of $240, up from $200, while maintaining an overweight rating. Nvidia is positioned to gain the most from the $2 trillion spending on AI infrastructure, Barclays noted.
