Analyst Disagrees with NVDA-OpenAI Deal Concerns

NVIDIA Corp (NASDAQ:NVDA) is a frequently discussed stock among analysts. Intelligent Alpha's founder and CEO, Doug Clinton, stated on CNBC that the market's worries about NVIDIA Corp's deal with OpenAI are unfounded. These concerns often stem from the view that Nvidia's $100 billion deal with OpenAI is a form of vendor financing, where companies support their customers financially.

Some analysts are raising concerns over Nvidia’s deal with OpenAI, with many describing it as vendor financing, where companies provide financial support to their customers.

Clinton countered this perspective, suggesting it overlooks the massive infrastructure development underway. He noted that for companies like NVIDIA Corp and OpenAI, large investments are necessary to significantly impact the market. Investing in OpenAI is a strategic move for Nvidia to operate on a grand scale with a model builder.

Deals such as Nvidia's with OpenAI and Intel, along with Oracle's OpenAI partnership, indicate sustained high spending on computing and a continued strong demand for AI. NVIDIA's Hopper and Blackwell infrastructure are central to AI for LLM training, but its growth is moderating amid competition and capex limitations.

Nvidia's annual revenue growth was 56% in the last quarter, a decrease from nearly 100% year-over-year previously. Despite a strong position in the data center sector and increasing demand, Nvidia's growth may not maintain its previous pace. Increased competition, including from Broadcom, is also anticipated to affect Nvidia's profit margins long-term. Recently, Nvidia impressed the market by signing an AI infrastructure deal with Intel, investing $5 billion. Jensen Huang believes it will unlock $50 billion in TAM for both companies in the data center and PC sectors.

Columbia Threadneedle Global Technology Growth Strategy commented on NVIDIA Corporation (NASDAQ:NVDA) in their second quarter 2025 investor letter, noting that shares surged due to strong quarterly results driven by demand for the Blackwell architecture. They noted the new Blackwell chips deliver compelling performance improvements, with up to 30x faster inference capabilities as compared with prior generations and, importantly, are much more energy efficient. The company also proved resilient against a backdrop of increasing geopolitical tension, as sovereign deals announced in parts of the world such as the Middle East and Taiwan helped to offset headwinds that resulted from U.S. export restrictions on China sales.