Nvidia among investors in xAI’s $20 bln capital raise- Bloomberg
Investing.com -- Goldman Sachs raised its 12-month price target for Nvidia to $210 from $200, citing stronger earnings prospects and strategic investments tied to OpenAI.
The bank reiterated its Buy rating on the stock, noting that Nvidia’s partnerships and equity stakes in major artificial intelligence players could reinforce its dominant position in the AI ecosystem.
“We are Buy rated on Nvidia,” Goldman Sachs said, adding that its target is “based on an unchanged 35x P/E applied to our normalized EPS estimate of $6.00 (up from $5.75).”
The analysts said Nvidia’s recent strategic investments and partnerships with OpenAI and others have “sparked investor debate around the nature of the deals and the extent to which Nvidia’s equity investments could be recycled by investees as GPU spending, recognized by Nvidia as ‘circular’ revenue.”
Goldman Sachs cautioned that such revenue “could be dilutive to NVDA’s multiple,” especially where customers are not self-financing.
However, the bank said it viewed these moves as “strategic,” arguing that Nvidia’s investments “reinforce the market for Nvidia’s CUDA software ecosystem among developers” and act as a “signaling mechanism” of confidence in the scale of the AI opportunity.
Goldman Sachs said the sustainability of OpenAI’s infrastructure spending “will increasingly depend on equity & debt financing,” potentially reaching “up to ~$75bn in 2026 alone.”
It added that projects such as Oracle’s $18 billion debt raise to support OpenAI “appear to be gaining strong market traction.”
Overall, Goldman Sachs said it remained “comfortable in risk/reward as ‘circular’ deals represent less than ~15% of revenue in 2027E,” highlighting a “strong runway of growth from core and non-traditional customers.”