NVIDIA Stock Surges 4% After $100B OpenAI Investment

On September 22, local time, NVIDIA (NVDA.US) and OpenAI announced a collaboration that includes plans to build a massive data center and an investment of up to 100 billion dollars by NVIDIA in OpenAI. This news led to a nearly 4% increase in NVIDIA's stock price on Monday.

According to the agreement, OpenAI will use NVIDIA's systems to build and deploy at least 10 exaflops of AI data centers for training and running next-generation models. A source close to OpenAI revealed that the agreement will prompt NVIDIA to start delivering chips as early as the end of 2026. The agreement involves two independent but interrelated transactions. The source stated that OpenAI will purchase chips from NVIDIA in cash, while NVIDIA will obtain non-controlling shares in OpenAI through investment. NVIDIA's initial 10 billion dollar investment in OpenAI will commence once the two companies reach a final agreement on OpenAI's purchase of NVIDIA chips.

Regarding this collaboration, the United States bank stated that NVIDIA's 100 billion dollar investment in OpenAI could potentially generate up to 500 billion dollars in revenue in the future. The analysts, led by Vivek Arya, stated, "The collaboration includes a letter of intent where NVIDIA will participate in at least 10 exaflops of systems. The initial phase of NVIDIA's systems is targeted to go live on the Vera Rubin platform by the second half of 2026. We estimate that this could generate approximately 300 billion to 500 billion dollars in revenue in the future, equivalent to a 3 to 5 times return on investment." The bank reiterated its "buy" rating for NVIDIA and maintained a target price of 215 dollars.

On September 23, the United States bank securities issued a report reiterating its "buy" rating for NVIDIA, with a target price of 235 dollars. The report is based on NVIDIA's leading position in AI construction and its price-to-earnings growth ratio (PEG) being less than 1, making it more attractive compared to the nearly 2 times valuation of large growth peers. The United States bank securities believes that NVIDIA's 100 billion dollar investment in OpenAI is expected to generate approximately 300 billion to 500 billion dollars in revenue over time, equivalent to a return on investment of approximately 3 to 5 times.