Collaboration Scale Shakes the Market
On September 22, Nvidia and OpenAI jointly announced a strategic cooperation intention to deploy 10GW of computing power to support the construction and operation of AI data centers. In its latest report, Morgan Stanley stated that this cooperation agreement could bring Nvidia potential incremental revenue of $350-400 billion, surpassing all previous market predictions.
Exceeding Existing Growth Estimates
The report pointed out that the market generally believed OpenAI's computing demand would be dispersed among multiple cloud service providers, but the scale of this agreement suggests Nvidia will become a core partner. Compared to Nvidia's consensus revenue growth forecast for fiscal years 2027 to 2029 (annual increase only between $400 to $600 billion), the potential benefits of this collaboration are several times greater.
Morgan Stanley emphasized that this is a completely "new business" which had not been included in analysis models before, and therefore has a significant uplifting effect on Nvidia's future profit baseline.
OpenAI's Grand Ambitions
According to public information, OpenAI plans to achieve a 200GW computing power layout by 2033, currently only at 2GW. This means an average annual increase of 31GW over the next eight years. Industry experts believe the 10GW deployment plan is just the beginning, with immense potential for future expansion. Morgan Stanley noted that even if Nvidia only undertakes a small part, it would be enough to significantly alter the company's growth trajectory.
Prudent Risk Management Mechanisms
Notably, the agreement includes strict risk control mechanisms. The report estimates that each 1GW deployment requires about $10 billion in capital investment, with a total investment between $500 to $600 billion, $350 to $400 billion of which will go to Nvidia. These funds will be implemented in batches based on market financing conditions rather than a one-time investment. Analysts believe this phased execution approach helps ensure the project's feasibility amidst fluctuations in the capital market environment.
Investment Rating and Stock Price Outlook
Morgan Stanley maintains an "overweight" rating on Nvidia and sets the target price at $210, which is approximately 19% higher than the current price of $178.19. The report believes Nvidia's current P/E valuation is relatively reasonable, at a discount compared to major AI peers, and with its leading advantage in GPUs and AI computing power, it has higher certainty and potential for continuous expectation upgrades.
Year-to-date, Nvidia's stock price has soared by 221%, making it the most outstanding performer among semiconductor stocks covered by Morgan Stanley.
Industry Prospects and Market Signals
Analysts pointed out that this collaboration sends an important signal: the demand for computing power in the AI supply chain continues to expand rapidly, and leading companies are gradually becoming key beneficiaries of this ecosystem. With its integrated software and hardware system, Nvidia may become one of the most certain growth engines of the AI era.
Morgan Stanley lastly emphasized that even if the final benefits are not fully realized, this collaboration is enough to enhance market expectations for Nvidia's medium- and long-term profitability, becoming a new driving force for the semiconductor sector's growth.
