Evercore lifts Nvidia target on OpenAI deal, reaffirms stock as top pick

Investing.com -- Nvidia remains Evercore’s top pick after the brokerage reaffirmed confidence in the chipmaker following a management callback on its new partnership with OpenAI. It also raised its target on Nvidia shares to $225 from $214. 

The AI chipmaker has agreed to invest as much as $100 billion in OpenAI and provide the startup with data center chips, the companies said Monday, forging a major alliance between two of the most prominent players in the race to dominate artificial intelligence.

Evercore analysts said Nvidia is the preferred supplier to OpenAI. They believe the ChatGPT maker “has underestimated demand for its solution and wants to get ahead of demand going forward, and NVDA is uniquely positioned as the scale solution provider that could help OpenAI with this infrastructure buildout."

The deal covers at least 10 gigawatts of AI infrastructure, including GPUs, racks, networking and software. Evercore noted that Nvidia’s total addressable market (TAM) historically was $30–40 billion per gigawatt, but this figure could rise.

The analysts estimate the agreement will add $5.5 billion in revenue for Nvidia in the second half of 2026, citing Colossus, Prometheus and Project Rainier as benchmarks.

The $100 billion commitment is aligned with OpenAI’s 10GW buildout. On the back of this, Evercore raised its 2026 revenue and EPS forecasts by 2%, though it noted that these estimates may still prove conservative.

Analysts said that Nvidia is not just leading through its CUDA software stack but also through its connectivity solution, NVLink, which it expects to become a de facto standard.

“We reiterate our Outperform rating on NVDA as the AI ecosystem of choice,” they wrote.

The analysts acknowledged concerns that accelerating capital expenditure from top-tier hyperscalers could represent a bubble. However, they argued Nvidia’s valuation remains attractive, with shares trading at 32 times next twelve months’ earnings, below the nine-year median of 36 times.

"We view the risk/reward ratio as compelling at current levels," Evercore concluded. 

The partnership highlights how closely the strategies of major tech firms in advanced AI are converging. Nvidia gains a financial foothold in OpenAI, already one of its largest customers, while OpenAI secures the resources and chips it needs to defend its lead in a crowded market.

OpenAI has been pursuing its own chip efforts, similar to Google and Amazon, in a bid to reduce reliance on Nvidia. According to a report by Reuters, the deal does not alter those plans, nor does it affect OpenAI’s ongoing collaboration with Microsoft.

Earlier this year, Reuters reported that OpenAI had been developing a custom chip with Broadcom and TSMC.