Nvidia (NVDA) stock remains in focus as the chipmaker boosts its role in AI with new partnerships and key investments. One of the most notable is its collaboration with OpenAI (PC:OPAIQ), aimed at powering the next phase of AI growth. On Monday, Goldman Sachs analyst James Schneider raised his price target on Nvidia to $210 from $200, while keeping a Buy rating. The new target suggests about 12% upside from current levels.
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Schneider said Nvidia’s growing network of AI partners, including OpenAI, could drive more demand for its chips and support continued expansion. But he also noted that these deals could raise questions about how reliable Nvidia’s growth remains over time.
Why Goldman Sachs Sees Upside for NVDA Stock
The analyst said Nvidia’s partnerships and investments could create new demand for its GPUs and help it stay strong in the fast-growing AI market. He noted that projects like OpenAI’s new data centers and Oracle’s (ORCL) AI cloud plans will likely depend on Nvidia’s chips.
Schneider added that these deals highlight Nvidia’s leading role in AI and show how important it has become to the industry’s overall growth.
Analyst Warns of “Circular” Revenue Risk
However, Schneider warned that not all of Nvidia’s growth may come from real customer demand. He explained that when Nvidia invests in companies like OpenAI, some of that money can circle back to Nvidia through GPU purchases. Schneider referred to this as “circular revenue,” meaning sales that may appear strong but are partly funded by Nvidia’s own investments. This may boost short-term sales but could make long-term growth less certain.
He added that this creates a dual role for Nvidia, as both supplier and investor. In such cases, Schneider said investors should look more closely at how much of the demand is driven by outside funding rather than Nvidia’s own capital.
Is Nvidia Stock a Buy Right Now?
Wall Street has a Strong Buy consensus rating on the stock based on 36 Buys, two Holds, and one Sell recommendation. The average NVDA stock price target of $216.50 indicates 15.39% upside potential.
