Nvidia (NVDA) Seen as Key AI Beneficiary Despite Risks Tied to OpenAI Funding

Core Viewpoint - NVIDIA Corporation is recognized as a significant player in the AI sector, with a recent announcement of a $100 billion equity investment in OpenAI, which is expected to enhance its market position and growth potential [1][4]. Investment and Partnership Details - DA Davidson analyst Gil Luria has reiterated a Buy rating for NVIDIA with a price target of $210, following the announcement of the investment in OpenAI [1]. - NVIDIA and OpenAI have signed a letter of intent to deploy at least 10 gigawatts (GW) of NVIDIA systems for training and inference of future AI models [4]. - NVIDIA plans to progressively invest up to $100 billion in OpenAI as each gigawatt is deployed, indicating a long-term commitment to the partnership [4]. Concerns and Market Position - There are concerns that NVIDIA may be becoming the "investor of last resort" for OpenAI, suggesting that it is stepping in to cover OpenAI's substantial commitments [2][4]. - The company has previously had to support CoreWeave's IPO, which has since tripled in value, but there is a preference for more traditional investors to fund the data center expansion [3]. Market Outlook - While NVIDIA shows potential as an investment, there are opinions that other AI stocks may offer greater upside potential with less downside risk [5].