Nvidia Stock Climbs on Oracle Cloud Deal & AI Growth Momentum

Nvidia’s stock, already enjoying elite status, appears to have received a boost of adrenaline after analysts went from being negative to positive very rapidly. Nvidia’s stock climbed on Thursday morning, increasing 0.6% in premarket trading to $178.43 after ascending 3.9% the day before. 

The surge follows as Wall Street processes Oracle’s blockbuster cloud-computing guidance, which sends shockwaves through the larger artificial-intelligence (AI) industry. Nvidia, who is the market’s top AI chipmaker, remains to be a crucial beneficiary of the AI buildout, and analysts are changing their attitude from cautiousness to fresh optimism.

Oracle’s Cloud Deal Fuels Momentum

Oracle’s deal of booking $317 billion in future contract revenue for its most recent quarter that concluded on August 31^st shocked the Street, marking all-time high demand for AI-powered cloud services. 

Oracle’s stepping up underscored the demand for high-performance computing capacity, which is something that directly validates Nvidia’s growth narrative. The AI boom isn’t a solo act, cloud giants are climbing to get a hold of GPU compute power, and that momentum is translating into stock upgrades for Nvidia.

Analyst Upgrades

D.A. Davidson analyst Gil Luria, upgraded the stock to Buy from Neutral and set a new price target at $210, which is up from $195. His justification was that the AI computing demand boom will continue to drive Nvidia’s acceleration next year and beyond. 

Export restrictions and supply chain difficulties persist, but they are secondary issues in his view as compared to Nvidia’s strong leadership in the GPU market. 

Lurria said,

“We believe the growth in AI compute demand will drive enough demand to sustain Nvidia’s growth into next year and likely beyond. While there are still several cross-currents, we believe those are not enough to change that trajectory”.

Also, BNP Paribas’s David O’Connor highlighted the longer-term implications, pointing out that $500 billion of cloud-rental revenue for Oracle would equal about $100 billion of computing infrastructure expenditure and five gigawatts of data-center capacity. 

He reiterated a Buy-equivalent rating on Nvidia with a target price of $240, highlighting how directly the fortunes of Nvidia are linked to the AI cloud growth. He wrote,

“This step-up…reflects the continuing need for GPU Compute to satisfy AI demand across both training and inference. And is a long term positive for Nvidia”.

OpenAI & Oracle Deal

Adding yet another level of optimism, as per the Wall Street Journal report, OpenAI has made a $300 billion deal with Oracle to buy computing power for about five years. 

However, very few details are available on this matter. If Oracle is constructing the “AI super-factories” of the future, Nvidia’s GPUs are the foundation within them.

Nvidia’s Era of Super-Factory & Chip Sector Reaction

CEO Jensen Huang of Nvidia recently discussed the economics of next-generation data centers. He highlighted that one gigawatt plant could cost $35 billion in Nvidia hardware, along with an additional $15 billion in other components. 

With demand trajectories looking towards multiple gigawatts “AI super-factories,” the opportunity for Nvidia’s revenue path is enormous. Oracle’s shift to hyperscale infrastructure reinforces that reality and solidifies Nvidia as the hardware ecosystem backbone of AI.

Whereas Nvidia is riding high on powerful momentum, peers were less optimistic in early trading. Advanced Micro Devices stock dipped 1%, and Broadcom dropped 0.2% premarket. The difference underscores Nvidia’s special place in AI, where its dominance of GPUs continue to grab premium investor interest.

Nvidia’s Growth Story

The coming together of Oracle’s cloud growth, multi-billion-dollar AI hardware deals, and new analyst upgrades indicates that Nvidia is entering its latest phase of expansion. Though dangers of export controls and competition from AMD and Huawei are hanging over the company, its place at the center of AI infrastructure investment remains to be its strongest aspect. 

As Wall Street sentiment turns back towards being bullish, Nvidia is well-positioned to continue its dominance quite well past 2025. Of course, there are headwinds, export restrictions, tariffs, and high competition, but these risks are soft as compared to the secular demand wave that Nvidia is riding. 

Despite all the fuss over AI, the most obvious winner isn’t some trendy startup or a cloud newcomer, rather it’s Nvidia, which is a chip company that’s been around for 30 years and has remade itself as the unchallenged foundation of artificial intelligence. 

Investors will have to consider whether the stock’s high prices are reasonable by its growth path, but here is something very clear that Nvidia is scripting the whole AI cloud story. If Oracle is constructing castles in the air, Nvidia is selling the bricks in the background, and that is generally where the true wealth is.