Oracle (ORCL) Plans to Buy $40B Worth of Nvidia Chips

Tech company Oracle (ORCL) plans to spend around $40 billion on Nvidia’s (NVDA) GB200 chips in order to support a massive new data center for OpenAI, according to the Financial Times. Indeed, this facility, which will be built in Abilene, Texas, is the first part of the $500 billion U.S. Stargate Project. It will also be one of the largest data centers in the world (1.2 gigawatt) and is expected to begin operations by mid-2026. As a result, Oracle will buy 400,000 Nvidia chips in order to handle AI training and applications.

For reference, the Stargate Project was officially announced in January by President Donald Trump, alongside major tech players like SoftBank Group (SFTBY), Oracle, and OpenAI, to build large-scale AI infrastructure in the U.S. Other partners include Microsoft (MSFT), Arm (ARM), and Nvidia. It is worth noting that both SoftBank and OpenAI have already contributed $18 billion each in order to support the initiative.

In addition to the Texas site, a similar project called Stargate UAE was announced this week, which will see OpenAI, Nvidia, Oracle, SoftBank, Cisco Systems (CSCO), and G42 work together. The one-gigawatt computing hub will be built by G42 and run by OpenAI and Oracle, using the same Nvidia Grace Blackwell chips. This move will help expand the Stargate project internationally and further support AI development.

Is NVDA a Good Stock to Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 34 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $164.51 per share implies 25.2% upside potential.

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