Barclays lifts Nvidia target to $240, sees 35.6% upside

Barclays on Thursday raised its target for Nvidia stock to $240, up from $200. That means a possible upside of 35.6%, based on where the stock trades now, and it cited a massive surge in artificial intelligence spending that could push the chipmaker’s numbers way higher in the next five years.

The prediction came in a note from Barclays analyst Tom O’Malley, who said the flood of AI partnerships and cash is landing directly in Nvidia’s income statement over the long haul.

According to Barclays, this makes Nvidia the most attractive stock in the entire AI sector. Over the past few weeks, Nvidia has sealed a string of deals that position it at the center of AI infrastructure.

The biggest one is a strategic agreement to invest up to $100 billion in OpenAI, the company behind ChatGPT. The money will go into compute resources and chip deployment.

At the same time, Nvidia also signed a separate agreement with Alibaba to build out physical infrastructure for AI data training and storage. And earlier this month, the company committed $5 billion to Intel, which will now have its CPUs integrated into Nvidia’s AI platforms.

Nvidia signs billion-dollar deals while others raise cash

In O’Malley’s view, the impact of these moves is already visible in the broader AI landscape. He said, “With the wave of announcements that have come over the last 6-9mo, we now estimate over $2T of planned spend at ~40GW of power in total.”

That figure includes government, corporate, and private efforts to build massive AI systems that need tons of compute power. Much of that demand flows straight into Nvidia’s GPU business, which fuels everything from large language models to recommendation engines.

The recent deals are happening alongside fresh funding efforts elsewhere. On Thursday, Nscale, a British AI infrastructure firm based in London, announced it had raised $1.1 billion in Series B funding. Norwegian investment firm Aker led the round.

Other backers include Nvidia, Nokia, and Dell. The money will be used to build AI data centers across Europe, especially in the U.K., where Microsoft, OpenAI, and Nvidia recently launched multi-billion-dollar infrastructure projects through Nscale.

Barclays isn’t alone in backing Nvidia. Of the 66 firms that cover the stock, 60 have it rated as a buy or strong buy, based on LSEG data. And even though Nvidia’s shares dipped by 1% on Thursday morning, they’re still up about 31% since the start of the year.

So far, Nvidia’s performance has been driven by massive chip sales to OpenAI, Microsoft, Amazon, Google, and Meta; all hungry for the hardware that powers generative AI.

The OpenAI-Nvidia cash loop

But not everyone is thrilled. Some analysts are warning about how the cash is moving in circles, with no clear value being created. Jamie Zakalik, analyst at Neuberger Berman, pointed out that the latest Nvidia–OpenAI deal is just another example of money cycling back into the same players.

“The Nvidia deal is the latest example of OpenAI raising money that it pours right back into the company providing the capital,” Jamie said. The concern is that companies like Microsoft invest in OpenAI, which then spends that cash on chips from Nvidia, giving everyone a revenue boost, without making anything new.

Jamie added, “It’s goosing up everyone’s earnings and everyone’s numbers, but it’s not actually creating anything.” That statement echoes what many skeptics have been whispering across trading desks: the numbers are growing, but the output isn’t.

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