Oracle (ORCL) and privately held OpenAI plan to fill their new U.S.-based data center with billions of dollars worth of Nvidia (NVDA) microchips and processors.
Oracle and OpenAI are developing a new data center in Texas as part of the $500 billion “Stargate” infrastructure project they announced earlier this year alongside U.S. President Donald Trump. The data center, to be situated in Abilene, Texas, is expected to house 64,000 Nvidia GB200 microchips by the end of 2026.
The rollout will occur in phases, with an initial 16,000 Nvidia microchips expected to be in place this summer, according to multiple media reports. OpenAI and Oracle reportedly plan to operate a supercomputer at the site of the Texas data center.
Good News for NVDA Shareholders
News that the data center will use thousands of Nvidia chips and processors is good news for the technology company and its shareholders. NVDA stock has been trending lower in recent weeks on concerns about demand for its chips that power artificial intelligence (AI) applications and models.
News that Nvidia’s chips will be used in the Texas data center comes more than a month after OpenAI, Oracle and Japan’s SoftBank unveiled the Stargate project at a White House event. Nvidia’s powerful GB200 microchips cost between $60,000 and $70,000 each. Based on the $65,000 midrange of this price, Oracle and OpenAI could spend $4.16 billion buying Nvidia GB200 chips.
NVDA stock has risen 20% over the last 12 months.
Is NVDA Stock a Buy?
Nvidia’s stock currently has a consensus Strong Buy rating among 42 Wall Street analysts. That rating is based on 39 Buy and three Hold recommendations assigned in the last three months. The average NVDA price target of $177.41 implies 59.64% upside from current levels.
