• DA Davidson maintains a Buy rating and $210 price target on NVIDIA despite concerns over its massive OpenAI commitment.
  • The firm warns the chipmaker could become OpenAI's "investor of last resort" to fund the $100 billion pledge and 10 GW system deployment.
  • The unprecedented scale of the deal underscores the intensifying global race for AI compute capacity.

NVIDIA Corp.'s landmark strategic partnership with OpenAI, which includes a pledge to invest up to $100 billion and deploy 10 gigawatts of its AI systems, is being viewed with a measure of caution by at least one Wall Street firm. While reaffirming a Buy rating on the stock, analysts at DA Davidson have raised flags about the potential financial exposure for the world's most valuable chipmaker.

The firm, which kept its $210 price target on NVIDIA shares, suggested in a note to clients that the sheer scale of the commitment could position NVIDIA as a financial backstop for OpenAI's ambitious infrastructure build-out. "While supportive for OpenAI's mission, NVIDIA risks acting as the 'investor of last resort' to cover these heavy commitments," the note stated, according to people familiar with the matter. A spokesperson for DA Davidson declined to comment further when reached.

The deal, announced earlier this week, represents a historic escalation in the AI infrastructure arms race. The 10 GW of compute capacity—enough to power millions of homes—is intended to support OpenAI's next-generation datacenter needs. This deepens a collaboration that dates back to 2016, when NVIDIA hardware first powered OpenAI's deep learning research.

Efforts to obtain comment from NVIDIA on the analyst's concerns were unsuccessful. The company's stock was trading slightly lower in pre-market activity Friday, though it remains up significantly for the year on explosive demand for its AI chips.

The partnership signals a multi-year investment cycle that will ripple through global semiconductor supply chains and datacenter construction. However, the analysis from DA Davidson highlights the underlying tension for NVIDIA: its dominance in supplying the picks and shovels of the AI gold rush now involves underwriting the ambitions of its largest customers. Without such deep backing, some of these capital-intensive projects might struggle to get off the ground, the firm implied.

Correction: An earlier version of this article misstated the timing of the DA Davidson note; it was issued after the market closed on Thursday.