OpenAI and Nvidia's $100 Billion Deal Stalled
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy NVDA?
Source: Newsfilter
- Stalled Agreement: Since the announcement of the $100 billion deal in September, negotiations between OpenAI and Nvidia have made no substantial progress, leading to investor concerns and a decline in Nvidia's market cap from a peak of $5 trillion to $4.4 trillion.
- Mutual Dependence: Despite reported friction, OpenAI relies on Nvidia's AI chips to meet its revenue growth targets, while Nvidia needs customers like OpenAI to drive sales of its expensive systems, highlighting their interdependence in the AI sector.
- Investment and Competitive Dynamics: Nvidia has shown caution in its collaboration with OpenAI, investing in other AI labs and forming partnerships with competitors like Anthropic and AMD, reflecting a strategic shift to diversify its customer base amid high concentration risks.
- Future Outlook and Challenges: OpenAI aims to include Nvidia in its upcoming funding round, yet progress on their infrastructure collaboration remains stalled, with the first phase of investment not expected to commence until the second half of 2026, indicating challenges both companies face in a rapidly evolving market.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 185.610
Low
200.00
Averages
264.97
High
352.00
Current: 185.610
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Nvidia Set to Report Earnings, Stock Poised for Surge
- New Architecture Launch: Nvidia is set to unveil its new Rubin chip architecture in 2024, which allows developers to train models with 75% fewer GPUs, thereby reducing inference costs by up to 90%, significantly enhancing AI development efficiency and lowering enterprise costs.
- Strong Earnings Expectations: Nvidia is projected to report $65.5 billion in revenue for Q4 of fiscal 2026, with an annual total expected to reach $213.3 billion, reflecting a 62% year-over-year growth, indicating that the company's robust performance in the data center market will continue to drive stock price increases.
- Positive Market Reaction: Analysts forecast earnings per share of $4.69 for Nvidia, and if actual results exceed expectations, it will further boost market confidence in its stock, potentially leading to significant price appreciation.
- Optimistic Future Outlook: Management anticipates first-quarter revenue for fiscal 2027 to hit $70.7 billion, and if this forecast is raised, it will provide strong support for Nvidia's stock price, further attracting investor interest.
See More
Nvidia Poised to Exceed Fiscal 2027 Revenue Estimates
- Optimistic Revenue Outlook: Nvidia is expected to surpass the $323.3 billion revenue estimate for fiscal 2027, driven by multiple tailwinds including strong demand for Blackwell systems and increased AI data center spending, positioning the company for sustained growth.
- Strong Pricing Power: The company is projected to maintain a gross margin of approximately 75% in fiscal 2027, primarily due to a high revenue mix of profitable data center GPUs and networking products, indicating its ability to sustain profitability amid intensifying competition.
- Market Share Defense: Despite competitive pressures from AMD and Qualcomm, Nvidia holds a 92% share of the global GPU market, only down 2 percentage points, demonstrating resilience in its market dominance and potential for recovery.
- Ecosystem Advantage: Nvidia's CUDA software ecosystem and mature developer tools create significant switching costs for customers, enhancing its competitive edge and ensuring it remains a leader in the AI hardware space even as competition intensifies.
See More
Tech Stocks Struggle While Consumer Staples Shine
- Tech Sector Weakness: On Tuesday, tech stocks like AMD and Lumentum struggled, leading to a bearish market sentiment that reflects investor concerns over high valuations, potentially impacting future investment decisions.
- Consumer Staples Resilience: In stark contrast to tech stocks, the consumer staples sector showed strong performance, indicating a market preference for stable earnings, which may attract more capital into this area to mitigate risk.
- Regional Banks' Steady Growth: Regional banks demonstrated resilience amid market volatility, drawing investor attention and suggesting that traditional financial institutions remain attractive in uncertain economic conditions, potentially driving their stock prices higher.
- Precious Metals and Industrials Recovery: The strong performance of precious metals and industrials indicates an increased demand for safe-haven assets, reflecting investor concerns about potential economic slowdowns, which could influence investment strategies in related sectors.
See More
Nvidia and OpenAI's Partnership Progress Stalls
- Negotiation Stalemate: Nvidia and OpenAI's $100 billion partnership negotiations are currently 'on ice' due to internal doubts at Nvidia regarding OpenAI's business model, leading to decreased investor confidence in future collaboration.
- Market Valuation Fluctuations: Despite Nvidia's market cap surpassing $5 trillion in October, it has since dropped 15% to $4.4 trillion, reflecting market uncertainty regarding its relationship with OpenAI.
- Infrastructure Development Delays: OpenAI's plan to build infrastructure requiring 10 gigawatts of power has shown little apparent progress, with Nvidia's initial $10 billion investment contingent on the completion of the first gigawatt.
- Intensifying Competition: OpenAI's increasing partnerships with other semiconductor companies like AMD indicate a potential reduction in its reliance on Nvidia, which could impact Nvidia's dominance in the AI market.
See More
OpenAI and Nvidia's $100 Billion Deal Stalled
- Stalled Agreement: Since the announcement of the $100 billion deal in September, negotiations between OpenAI and Nvidia have made no substantial progress, leading to investor concerns and a decline in Nvidia's market cap from a peak of $5 trillion to $4.4 trillion.
- Mutual Dependence: Despite reported friction, OpenAI relies on Nvidia's AI chips to meet its revenue growth targets, while Nvidia needs customers like OpenAI to drive sales of its expensive systems, highlighting their interdependence in the AI sector.
- Investment and Competitive Dynamics: Nvidia has shown caution in its collaboration with OpenAI, investing in other AI labs and forming partnerships with competitors like Anthropic and AMD, reflecting a strategic shift to diversify its customer base amid high concentration risks.
- Future Outlook and Challenges: OpenAI aims to include Nvidia in its upcoming funding round, yet progress on their infrastructure collaboration remains stalled, with the first phase of investment not expected to commence until the second half of 2026, indicating challenges both companies face in a rapidly evolving market.
See More
Super Micro Computer Raises 2026 Revenue Forecast Amid AI Demand
- Revenue Forecast Increase: Super Micro Computer raised its fiscal year 2026 revenue forecast from $36 billion to at least $40 billion, reflecting robust demand for AI-optimized servers and indicating a strong market position amid rapid growth.
- Stock Price Surge: The company's shares rose over 5% in extended trading, demonstrating investor optimism regarding future performance and enhancing overall market confidence in Super Micro's prospects.
- Customer Base Expansion: The company is benefiting from growth among existing customers while also attracting new clients, indicating its increasing competitiveness in the AI server and rack market, which is driving overall business growth.
- Strengthened Partnerships: Super Micro is closely collaborating with chip designers like Nvidia and AMD to rapidly bring servers to market, further solidifying its position as a primary beneficiary of the generative AI boom.
See More
Nvidia Set to Report Earnings, Stock Poised for Surge
- New Architecture Launch: Nvidia is set to unveil its new Rubin chip architecture in 2024, which allows developers to train models with 75% fewer GPUs, thereby reducing inference costs by up to 90%, significantly enhancing AI development efficiency and lowering enterprise costs.
- Strong Earnings Expectations: Nvidia is projected to report $65.5 billion in revenue for Q4 of fiscal 2026, with an annual total expected to reach $213.3 billion, reflecting a 62% year-over-year growth, indicating that the company's robust performance in the data center market will continue to drive stock price increases.
- Positive Market Reaction: Analysts forecast earnings per share of $4.69 for Nvidia, and if actual results exceed expectations, it will further boost market confidence in its stock, potentially leading to significant price appreciation.
- Optimistic Future Outlook: Management anticipates first-quarter revenue for fiscal 2027 to hit $70.7 billion, and if this forecast is raised, it will provide strong support for Nvidia's stock price, further attracting investor interest.
See More
Nvidia Poised to Exceed Fiscal 2027 Revenue Estimates
- Optimistic Revenue Outlook: Nvidia is expected to surpass the $323.3 billion revenue estimate for fiscal 2027, driven by multiple tailwinds including strong demand for Blackwell systems and increased AI data center spending, positioning the company for sustained growth.
- Strong Pricing Power: The company is projected to maintain a gross margin of approximately 75% in fiscal 2027, primarily due to a high revenue mix of profitable data center GPUs and networking products, indicating its ability to sustain profitability amid intensifying competition.
- Market Share Defense: Despite competitive pressures from AMD and Qualcomm, Nvidia holds a 92% share of the global GPU market, only down 2 percentage points, demonstrating resilience in its market dominance and potential for recovery.
- Ecosystem Advantage: Nvidia's CUDA software ecosystem and mature developer tools create significant switching costs for customers, enhancing its competitive edge and ensuring it remains a leader in the AI hardware space even as competition intensifies.
See More
Tech Stocks Struggle While Consumer Staples Shine
- Tech Sector Weakness: On Tuesday, tech stocks like AMD and Lumentum struggled, leading to a bearish market sentiment that reflects investor concerns over high valuations, potentially impacting future investment decisions.
- Consumer Staples Resilience: In stark contrast to tech stocks, the consumer staples sector showed strong performance, indicating a market preference for stable earnings, which may attract more capital into this area to mitigate risk.
- Regional Banks' Steady Growth: Regional banks demonstrated resilience amid market volatility, drawing investor attention and suggesting that traditional financial institutions remain attractive in uncertain economic conditions, potentially driving their stock prices higher.
- Precious Metals and Industrials Recovery: The strong performance of precious metals and industrials indicates an increased demand for safe-haven assets, reflecting investor concerns about potential economic slowdowns, which could influence investment strategies in related sectors.
See More
Nvidia and OpenAI's Partnership Progress Stalls
- Negotiation Stalemate: Nvidia and OpenAI's $100 billion partnership negotiations are currently 'on ice' due to internal doubts at Nvidia regarding OpenAI's business model, leading to decreased investor confidence in future collaboration.
- Market Valuation Fluctuations: Despite Nvidia's market cap surpassing $5 trillion in October, it has since dropped 15% to $4.4 trillion, reflecting market uncertainty regarding its relationship with OpenAI.
- Infrastructure Development Delays: OpenAI's plan to build infrastructure requiring 10 gigawatts of power has shown little apparent progress, with Nvidia's initial $10 billion investment contingent on the completion of the first gigawatt.
- Intensifying Competition: OpenAI's increasing partnerships with other semiconductor companies like AMD indicate a potential reduction in its reliance on Nvidia, which could impact Nvidia's dominance in the AI market.
See More
OpenAI and Nvidia's $100 Billion Deal Stalled
- Stalled Agreement: Since the announcement of the $100 billion deal in September, negotiations between OpenAI and Nvidia have made no substantial progress, leading to investor concerns and a decline in Nvidia's market cap from a peak of $5 trillion to $4.4 trillion.
- Mutual Dependence: Despite reported friction, OpenAI relies on Nvidia's AI chips to meet its revenue growth targets, while Nvidia needs customers like OpenAI to drive sales of its expensive systems, highlighting their interdependence in the AI sector.
- Investment and Competitive Dynamics: Nvidia has shown caution in its collaboration with OpenAI, investing in other AI labs and forming partnerships with competitors like Anthropic and AMD, reflecting a strategic shift to diversify its customer base amid high concentration risks.
- Future Outlook and Challenges: OpenAI aims to include Nvidia in its upcoming funding round, yet progress on their infrastructure collaboration remains stalled, with the first phase of investment not expected to commence until the second half of 2026, indicating challenges both companies face in a rapidly evolving market.
See More
Super Micro Computer Raises 2026 Revenue Forecast Amid AI Demand
- Revenue Forecast Increase: Super Micro Computer raised its fiscal year 2026 revenue forecast from $36 billion to at least $40 billion, reflecting robust demand for AI-optimized servers and indicating a strong market position amid rapid growth.
- Stock Price Surge: The company's shares rose over 5% in extended trading, demonstrating investor optimism regarding future performance and enhancing overall market confidence in Super Micro's prospects.
- Customer Base Expansion: The company is benefiting from growth among existing customers while also attracting new clients, indicating its increasing competitiveness in the AI server and rack market, which is driving overall business growth.
- Strengthened Partnerships: Super Micro is closely collaborating with chip designers like Nvidia and AMD to rapidly bring servers to market, further solidifying its position as a primary beneficiary of the generative AI boom.
See More
