Street Calls of the Week
Investing.com - Mizuho has reiterated an Outperform rating and $205.00 price target on Nvidia (NASDAQ:NVDA) following the company’s announcement of a $100 billion equity investment in OpenAI. According to InvestingPro data, Nvidia currently trades above its Fair Value, reflecting the market’s strong confidence in the company’s AI leadership position and impressive 71.55% revenue growth over the last twelve months.
The investment will fund up to approximately 10GW of AI data center capacity, beginning with the Vera Rubin NVL racks expected to launch in the second half of 2026, according to Mizuho’s analysis. With an excellent financial health score and a strong current ratio of 4.21, InvestingPro analysis suggests Nvidia is well-positioned to execute this massive investment. Get access to 20+ additional ProTips and comprehensive financial metrics with InvestingPro.
Mizuho believes the deal cements Nvidia’s GPU and networking dominance in LLM/AI training while securing demand outlook for 2026-2027 with its largest customer. The firm expects initial deployments to begin in the second half of 2026 with VR200 NVL144 shipments.
OpenAI is expected to receive an initial $10 billion from Nvidia in the next few months after an official agreement is reached, with the remaining $90 billion to be disbursed as OpenAI ramps up new capacity.
Mizuho notes that Nvidia had previously indicated it costs approximately $50 billion per GW of AI data center capacity, with about $35 billion dedicated to Nvidia infrastructure.
In other recent news, Micron Technology reported quarterly results that exceeded analyst expectations, with revenue reaching $11.32 billion, surpassing Wall Street’s estimate of $11.12 billion. The company also posted a gross margin of 45.7% and non-GAAP earnings per share of $3.03, both figures above consensus forecasts. Meanwhile, Alibaba announced a new collaboration with Nvidia focused on Physical AI, as revealed by Science and Technology Innovation Express News. This partnership will cover multiple aspects of Physical AI practices. Additionally, Nvidia’s stock rating was reiterated as Buy by UBS, DA Davidson, and Benchmark, each maintaining their respective price targets. UBS highlighted the significant revenue potential from Nvidia’s partnership with OpenAI, estimating it could generate approximately $400 billion over multiple years. DA Davidson and Benchmark both noted the strategic partnership with OpenAI, which involves deploying at least 10 gigawatts of Nvidia systems for AI data centers. These recent developments reflect ongoing strategic moves and performance highlights from these companies.
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