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Nvidia (NVDA) received a major vote of confidence from Wall Street as Barclays analyst Tom O'Malley boosted his price target to $240 from $200, maintaining an “Overweight” rating. The upgrade reflects growing optimism around the chipmaker's dominant position in artificial intelligence (AI) infrastructure spending.
Barclays estimates that over $2 trillion will be spent on planned AI initiatives across approximately 40 gigawatts of global capacity over the next four to five years. Using the firm's calculations, which indicate that each gigawatt requires $50-60 billion and roughly 500,000 graphics processing units, Nvidia appears positioned to capture the majority of this massive buildout.
The analyst expects around 65-70% of this spending, approximately $1.5 trillion, will flow toward compute and networking capabilities, where Nvidia maintains market leadership. This could translate to nearly 19 million GPU purchases, with the majority of these sales expected to flow through Nvidia's profit-and-loss statement over the next five years.
Significant capacity additions include Meta's (META) 2-gigawatt project, the massive 10-gigawatt Stargate initiative with OpenAI and partners, and numerous sub-1-gigawatt projects from Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOG) (GOOGL). International expansion across Saudi Arabia, South Korea, and other regions adds further momentum.
NVDA stock has delivered market-beating returns over the past decade but has flatlined over the past month. The $240 NVDA stock price target suggests an upside potential of almost 40% from current levels. The upgraded valuation uses a 35x price-to-earnings multiple on projected 2026 earnings per share, up from a previous multiple of 29x.
While Nvidia's near-term performance has disappointed some investors amid broader AI stock rotation, the fundamental thesis remains compelling. With trillions in infrastructure spending beginning to materialize, NVDA stock appears attractively positioned below $180 for investors betting on sustained AI adoption.
The Bull Case for Nvidia Stock
Nvidia is executing a comprehensive strategy to cement its leadership position in the artificial intelligence ecosystem through landmark partnerships, massive infrastructure investments, and open-source initiatives that could reshape the competitive landscape.
The chipmaker's recent announcement of a potential $100 billion investment in OpenAI is the largest AI infrastructure project in history. This collaboration will deploy at least 10 gigawatts of Nvidia systems, including millions of GPUs, to power OpenAI's next-generation models. OpenAI serves over 700 million weekly active users. So, this partnership validates Nvidia's dominance in AI training and inference infrastructure at an unprecedented scale.
Moreover, Nvidia disclosed a £2 billion ($2.6 billion) investment in the U.K. AI ecosystem, which provides it with geographic diversification. It is collaborating with leading venture capital firms to accelerate AI startups while building sovereign AI infrastructure through partnerships with CoreWeave (CRWV), Microsoft, and Nscale. These initiatives will deploy 120,000 Nvidia Blackwell Ultra GPUs across U.K. data centers by 2026.
Nvidia's partnership with Intel also indicates a shift in semiconductor dynamics. The $5 billion Intel investment will enable the creation of custom x86 CPUs for Nvidia's AI platforms and integrate RTX GPU chiplets into Intel's (INTC) system-on-chip (SoC) designs. This deal combines Nvidia's CUDA architecture dominance with Intel's x86 ecosystem, which should create additional competitive moats.
What Is the NVDA Stock Price Target?
Despite its massive size, Nvidia’s growth story is far from over. Additionally, its recent strategic moves position the semiconductor giant to capture value across the AI infrastructure stack.
Analysts forecast Nvidia's revenue to increase from $130.5 billion in fiscal 2025 (ended in January) to $378 billion in fiscal 2029, indicating an annual growth rate of 23.7%. During this period, adjusted earnings per share are forecast to increase from $2.99 to $8.92, representing a 24.4% annual growth.
Out of the 46 analysts covering NVDA stock, 39 recommend “Strong Buy,” two recommend “Moderate Buy,” four recommend “Hold,” and one recommends “Strong Sell.” The average NVDA stock price target is $214, above the current trading price of $178.
