DA Davidson reiterates Buy rating on Nvidia stock, citing OpenAI deal

Investing.com - DA Davidson has reiterated its Buy rating and $210.00 price target on semiconductor giant Nvidia (NASDAQ:NVDA), which is trading near its 52-week high of $184.48, following a joint announcement with OpenAI. According to InvestingPro data, the company maintains an "EXCELLENT" financial health score, supported by remarkable revenue growth of 71.55% in the last twelve months.

The two companies announced a letter of intent for OpenAI to deploy at least 10 gigawatts of Nvidia systems for both training and inference of OpenAI’s future models.

As part of the agreement, Nvidia plans to invest up to $100 billion in OpenAI progressively as each gigawatt is deployed.

DA Davidson expressed positive sentiment about the announcement’s impact on OpenAI’s ability to scale its operations.

The firm also noted concerns that Nvidia has potentially become an "investor of last resort," suggesting the chipmaker might be bailing out OpenAI’s overextended commitments.

In other recent news, NVIDIA plans to invest up to $100 billion in OpenAI to develop AI infrastructure, aiming to deploy at least 10 gigawatts of AI data centers. This strategic partnership will focus on building infrastructure for OpenAI’s next-generation AI models, with the first gigawatt of NVIDIA systems expected to be operational by the second half of 2026. In another development, Iris Energy has announced a significant expansion by doubling its AI Cloud GPU capacity to 23,000 units, setting a revenue target exceeding $500 million in annualized run-rate by the first quarter of 2026. The company has invested approximately $674 million in acquiring additional GPUs, including NVIDIA and AMD models.

Elon Musk’s AI company, xAI, has raised $10 billion in new funding, boosting its valuation to $200 billion. Meanwhile, Samsung Electronics has secured qualification from NVIDIA for its 12-layer HBM3E high-bandwidth memory, following several failed attempts, becoming the third qualified supplier after SK Hynix and Micron. In another collaboration, NVIDIA has announced a $5 billion investment in Intel, with TD Cowen reiterating its Buy rating for NVIDIA stock. This partnership aims to integrate NVIDIA’s AI and accelerated computing capabilities with Intel’s CPU technology across AI and PC markets.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.