OpenAI Targets $600 Billion Compute Spend by 2030
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy NVDA?
Source: Newsfilter
- Revenue Beat: OpenAI's revenue for 2025 reached $13 billion, exceeding its $10 billion forecast, indicating strong growth potential in the AI market and likely attracting further investor interest.
- Massive Investment Plans: OpenAI aims for over $280 billion in total revenue by 2030, nearly evenly split between consumer and enterprise segments, reflecting its strategic focus on diversifying revenue streams.
- Compute Resource Commitment: OpenAI has pledged to invest $1.4 trillion to develop 30 gigawatts of computing resources, sufficient to power approximately 25 million U.S. homes, highlighting its emphasis on future technological infrastructure.
- Rising Costs Impact: In 2025, OpenAI's inference-related expenses quadrupled, causing its adjusted gross margin to drop from 40% in 2024 to 33%, which may affect its profitability and investor confidence.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 187.900
Low
200.00
Averages
264.97
High
352.00
Current: 187.900
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.
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- Massive Investment Plans: OpenAI aims for over $280 billion in total revenue by 2030, nearly evenly split between consumer and enterprise segments, reflecting its strategic focus on diversifying revenue streams.
- Compute Resource Commitment: OpenAI has pledged to invest $1.4 trillion to develop 30 gigawatts of computing resources, sufficient to power approximately 25 million U.S. homes, highlighting its emphasis on future technological infrastructure.
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- Future Growth Potential: Analysts expect Nvidia to report a 57% revenue growth for fiscal 2026, accelerating to 65% in fiscal 2027, indicating strong growth momentum amid a surge in AI infrastructure spending.
- Capital Expenditure Plans: The four major hyperscalers plan to spend $650 billion on capital expenditures this year, further driving demand for Nvidia's products, with expectations for sustained demand growth in the coming years.
- Attractive Valuation: Despite the bullish outlook, Nvidia's forward P/E ratio is under 24, making the current stock price attractive, and investors should seize the opportunity to buy shares ahead of the upcoming earnings report on February 25.
See More
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- Stock Surge: Nvidia's (NVDA) stock has skyrocketed over 1,150% since the beginning of 2023, and despite relatively tame results in recent months, it is expected to soar after the earnings report on February 25, indicating strong market potential.
- Strong Growth Expectations: Analysts project Nvidia's revenue to grow by 65% this year, making it one of the fastest-growing stocks while its forward P/E ratio remains relatively low, suggesting that its value is underestimated and attracting more investor interest.
- Industry Standard: Nvidia's graphics processing units (GPUs) remain the industry standard in AI computing, and with major hyperscalers increasing their AI spending, Nvidia is poised to capture a significant share of the market, further solidifying its leadership position.
- Long-Term Investment Potential: With projections indicating that AI spending will last through at least 2030, Nvidia is not only expected to achieve significant growth in 2026 but also possesses strong long-term investment value as a key player in this technological revolution.
See More
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- Revenue Beat: OpenAI's revenue for 2025 reached $13 billion, exceeding its $10 billion forecast, indicating strong growth potential in the AI market and likely attracting further investor interest.
- Massive Investment Plans: OpenAI aims for over $280 billion in total revenue by 2030, nearly evenly split between consumer and enterprise segments, reflecting its strategic focus on diversifying revenue streams.
- Compute Resource Commitment: OpenAI has pledged to invest $1.4 trillion to develop 30 gigawatts of computing resources, sufficient to power approximately 25 million U.S. homes, highlighting its emphasis on future technological infrastructure.
- Rising Costs Impact: In 2025, OpenAI's inference-related expenses quadrupled, causing its adjusted gross margin to drop from 40% in 2024 to 33%, which may affect its profitability and investor confidence.
See More
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- Interest Rate Impact: The Federal Reserve's interest rate cuts have eased consumer financial pressure and facilitated borrowing for companies, which has driven stock prices and valuations higher, with the S&P 500's price-to-earnings ratio reaching historical highs.
- Valuation Fluctuations: Although the S&P 500 has shown little change recently, the Shiller CAPE ratio has declined for the first time, indicating that stock valuations may be coming down, which could signal potential market corrections ahead.
- Long-Term Investment Confidence: Despite potential short-term market fluctuations, historical data shows that the S&P 500 always recovers over the long term, encouraging investors to remain focused on economic reports and Fed signals to seize future investment opportunities.
See More
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- Nvidia Stake Reduction: Israel Englander sold 3 million shares of Nvidia in Q4, trimming his position by 17%, despite the company's dominance in AI infrastructure and a projected 38% annual earnings growth over the next three years, indicating an attractive valuation despite high costs.
- Palantir Stake Increase: Englander bought 543,300 shares of Palantir, doubling his stake, even though the company remains the most expensive stock in the S&P 500 with a P/E ratio of 212, reflecting his confidence in a potential rebound.
- AI Market Outlook: Nvidia's CUDA platform provides unique AI application development tools, enhancing its competitive edge, while Palantir is recognized as a leader in AI decisioning platforms, underscoring both companies' significant roles in the rapidly evolving AI market.
- Caution for Investors: While Englander's trades offer insights, investors should reassess the market conditions of both stocks before making similar trades, particularly in light of the rapid growth in AI spending.
See More
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- Valuation Warning: The Shiller P/E ratio for the S&P 500 is nearing historical highs, fluctuating between 39 and 41 over the past three months, significantly above the 155-year average of 17.3, suggesting a potential risk of declines exceeding 20%.
- Midterm Election Impact: Trump's second term faces midterm elections, with historical data showing an average peak-to-trough decline of 17.5% in the S&P 500 during midterm years, which could heighten market uncertainty.
- Bull and Bear Market Cycles: While historical data suggests a potential market pullback in 2026, past bull markets have typically lasted over 1,200 days, indicating that a long-term investment strategy remains crucial for wealth accumulation.
See More
