Nvidia stock jumps as Barclays reiterates Overweight rating on OpenAI deal

Investing.com - Nvidia (NASDAQ:NVDA) received a boost as Barclays reiterated its Overweight rating and $200.00 price target on the chipmaker’s stock following a major deal with OpenAI. The semiconductor giant, currently trading near its 52-week high of $184.48, has demonstrated remarkable momentum with a 50% surge over the past six months.

The research firm highlighted that OpenAI’s partnership with Nvidia to deploy 10GW of Nvidia systems could translate to approximately $350 billion in revenue for Nvidia through the end of this decade, with each gigawatt representing about $35 billion in potential revenue. This potential deal adds to Nvidia’s already impressive performance, with InvestingPro data showing a stellar 71.5% revenue growth in the last twelve months.

Barclays noted that while recent industry conversations had shifted toward custom ASICs following Broadcom’s $10 billion deal with OpenAI, Nvidia’s agreement demonstrates that general-purpose silicon will continue to run the majority of OpenAI’s workloads for years to come. With a market capitalization of $4.46 trillion and an excellent financial health score according to InvestingPro, which offers 20+ additional exclusive insights about NVDA, the company appears well-positioned to execute on this massive opportunity.

The firm emphasized that Nvidia’s deal is 3.5 times larger than the ASIC program at OpenAI in the second half of next year, indicating strong demand for both custom and general-purpose compute solutions in the current environment.

According to Barclays, the OpenAI partnership is "entirely incremental" and could add $35 billion to consensus estimates for Nvidia, including both compute and networking revenue.

In other recent news, Nvidia has announced a strategic partnership with OpenAI, planning to invest up to $100 billion in AI infrastructure. This collaboration will deploy at least 10 gigawatts of AI data centers, with the first gigawatt expected to be operational in the second half of 2026. DA Davidson has reiterated its Buy rating for Nvidia, with a price target of $210, following this joint announcement. Meanwhile, Iris Energy has doubled its AI Cloud capacity to 23,000 GPUs, purchasing additional Nvidia and AMD units worth approximately $674 million. The company aims for over $500 million in AI Cloud annualized run-rate revenue by early 2026. In another development, Elon Musk’s AI company, xAI, has raised $10 billion, increasing its valuation to $200 billion. Samsung Electronics has secured Nvidia’s qualification for its 12-layer HBM3E high-bandwidth memory, becoming the third qualified supplier after SK Hynix and Micron. Initial supplies to Nvidia will be limited, but this qualification is significant due to Nvidia’s leading role in the AI sector.

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