NVIDIA’s stock listed at another all-time high on Tuesday, gaining nearly 3 percent, and the market capitalization of the chipmaker exceeded $4.5 trillion.
Now its stock is increasing by approximately 39 percent per annum, and the stock continues to attract investors, as Nvidia is accelerating its deal-making speed and working to carve out a niche in the core of the artificial intelligence boom.
Last week, OpenAI indicated that Nvidia would make an equity investment of up to $100 billion in the AI company and construct hundreds of billions of dollars of data centers, stocked with Nvidia graphics processing units.
Subsequently, OpenAI announced five large new data centers with Oracle, which will be equipped with hundreds of thousands of GPUs.
The companies estimated that the entire project of “Stargate” will cost $500 billion.
Nvidia CEO Jensen Huang states that Nvidia products make up an estimated 70 percent of the cost of a new AI data center.
Citi’s analysts increased their price target on Nvidia from $200 to $210 on Tuesday, with an updated forecast of AI infrastructure spending in the wake of the OpenAI announcements.
Citi analyst Atif Malik wrote, “We believe OpenAI asked Nvidia for help. Nvidia has a very compelling product. The number of users and compute per user is growing.”
OpenAI is not alone. Meta, Google, and many others are also increasing their infrastructure spending.
CoreWeave is a cloud provider where Nvidia is a major shareholder. On Tuesday, CoreWeave agreed to provide Meta with $14.2 billion in AI infrastructure services.
Nvidia shares are performing better than all its megacap peers to date this year, except chipmaker Broadcom, which is up roughly 40 percent, also with the support of OpenAI.
