The Stargate Project: Why Oracle and NVIDIA Are Poised for Long-Term Dominance in AI Infrastructure

Samuel ReedFriday, Jun 6, 2025 9:52 pm ET
26min read

The Stargate Project, a $500 billion initiative led by OpenAI, has emerged as a cornerstone of global AI infrastructure development. Central to its success are Oracle and NVIDIA, whose partnership is driving a paradigm shift in how artificial intelligence is deployed, scaled, and monetized. For investors, the duo's roles in Stargate present a compelling opportunity to capitalize on a long-term structural shift—one that is underappreciated in their current valuations. Here's why both companies are positioned for sustained growth and why now could be an ideal time to buy.

Oracle: Building the Cloud Backbone of AI

Oracle's stake in Stargate is twofold: as a key equity partner and as the primary provider of cloud infrastructure. The company's Oracle Cloud Infrastructure (OCI) is the backbone of the project, managing the deployment of NVIDIA's GPU clusters and enabling OpenAI to lease computing power at scale. The Abilene, Texas data center—Phase 1 of which will be operational by mid-2025—represents a $40 billion bet on NVIDIA's Blackwell GPUs, with 400,000 units earmarked for the site alone. This is no mere cost center: UBS estimates the Texas facility alone could generate $20 billion in revenue for Oracle in its first phase, with total project-related revenues for both Oracle and NVIDIA projected to hit $250 billion over time.


Despite these tailwinds, Oracle's stock trades at a P/E ratio of ~16x, below its historical average and far below cloud peers like Amazon Web Services. This undervaluation stems from investor focus on Oracle's legacy software businesses, which still dominate its top line. However, OCI's AI-focused growth—bolstered by Stargate's demand—could redefine Oracle's trajectory. The initiative positions Oracle to rival AWS, Microsoft Azure, and Google Cloud in the AI infrastructure race, a market expected to grow at 25% CAGR through 2030.

NVIDIA: The GPU Powerhouse with a Sustainable Moat

NVIDIA's role in Stargate is equally pivotal. Its Blackwell series GPUs (GB200/GB300) are the lifeblood of AI training and inference, offering 25x better energy efficiency than prior generations. The Texas data center alone will house over 400,000 of these chips, with plans to expand to 5 gigawatts of capacity. Beyond Texas, NVIDIA's chips are powering global outposts like the UAE's 1-gigawatt supercomputing cluster, part of OpenAI's “Stargate for Countries” program. This initiative aims to build sovereign AI infrastructure in 10+ nations, creating recurring demand for NVIDIA's hardware.


NVIDIA's stock, however, has lagged behind its peers in 2025, trading at a P/S ratio of ~4.5x—a discount to its historical premium. This reflects near-term concerns about AI chip demand volatility and competition from in-house designs by firms like Google and Meta. Yet Stargate's multiyear rollout and the global push for sovereign AI infrastructure create a demand floor for NVIDIA. Its GPU sales to Stargate alone could hit $200 billion in the Texas phase alone, while the UAE and other markets promise incremental upside. NVIDIA's moat—the combination of its CUDA ecosystem, hardware-software integration, and sheer scale—remains unmatched.

Why Now Is the Time to Invest

The Stargate Project's long-term potential is underpriced in both stocks. For Oracle:
- Valuation: Its AI infrastructure play is a fraction of its current valuation, yet it could grow into a $100+ billion annual business by 2030.
- Competitive Edge: OCI's AI Blueprints and partnerships (e.g., Soley Therapeutics for healthcare) create sticky revenue streams.

For NVIDIA:
- Demand Resilience: Stargate's multiyear buildout ensures steady orders, even if near-term AI hype cools.
- Undervalued Innovation: Its cuVS library and NIM microservices are underappreciated tools for enterprise AI adoption.

Risks and Mitigants

  • Over-Reliance on OpenAI: Diversification through partnerships with governments and enterprises via “Stargate for Countries” mitigates this.
  • Regulatory Pushback: The project's emphasis on data sovereignty and ethical governance frameworks (e.g., World Economic Forum's AI Alliance) aims to preempt concerns.
  • Energy Costs: While the Texas site relies on fossil fuels, modular nuclear and renewables integration plans address sustainability critiques.

Conclusion: A Decade-Long Growth Story

Oracle and NVIDIA are not just vendors to Stargate—they are architects of a new era in AI infrastructure. Their current valuations ignore the project's multiyear revenue trajectory and the global AI arms race it has sparked. For investors with a 3–5 year horizon, these stocks offer asymmetric upside: a relatively low-cost entry point into a $500 billion opportunity with limited downside given their entrenched positions.

Investment Recommendation:
- Oracle (ORCL): Buy for long-term exposure to AI cloud growth. Target price: $100+ by 2030 (vs. current ~$80).
- NVIDIA (NVDA): Accumulate on dips. Target price: $800+ by 2027 (vs. current ~$500).

The Stargate Project isn't just a data center—it's a blueprint for the future of AI. Oracle and NVIDIA are writing that blueprint.