Barclays has raised its target on Nvidia shares by 20%. Why does he believe in its leadership in AI?

The world's leading manufacturer of processors for artificial intelligence Nvidia is able to further strengthen its position in the race for leadership in this area, and its shares can rise by another 35%, according to Barclays. He increased the target price of securities of the company, which is now already the most expensive on the market. According to the bank, active deals in the AI sphere make Nvidia "the most attractive" on the market.

Nvidia could be the main beneficiary of the race for leadership in artificial intelligence, given how deals in the segment are gaining traction, Barclays analysts wrote in a note quoted by CNBC. The investment bank raised its target price on Nvidia shares to $240 from $200, implying a 35% upside from the closing level on Sept. 24.

"We expect [the deals being done] to have a significant impact on Nvidia's financial results over the next five years or more. This will markedly improve key metrics and make the company the most attractive in our sector," Barclays analyst Tom O'Malley wrote.

Nvidia shares were up 1.9% at one point in trading on September 25, but then slowed to about 0.5%. Compared to early 2025, they are now 32% more expensive. Nvidia now has the world's largest capitalization among public companies - more than $4.3 trillion.

Nvidia has struck several major deals in recent weeks, including a strategic partnership with ChatGPT chatbot maker OpenAI involving investments of up to $100 billion, and a collaboration agreement with Alibaba to develop AI solutions. In mid-September, the chipmaker agreed to invest $5 billion in processor maker Intel as part of an agreement that will see Intel processors integrated into Nvidia's AI infrastructure platforms.

When Nvidia CEO Jensen Huang first said in March that the artificial intelligence infrastructure industry could benefit from building $1 trillion worth of data centers by the end of the decade, Barclays analysts were skeptical. But now analysts believe the estimate was too conservative, MarketWatch writes.

Barclays now estimates the total amount of planned investments in AI infrastructure at more than $2 trillion, which is equivalent to about 40 GW of capacity. Of that amount, the analysts estimate that 65-70% will be in computing resources and networking equipment. They added that "with new deals likely in the pipeline," Huang's updated forecast in August of AI infrastructure spending growing to $3-4 trillion is starting to "look much more realistic."

According to LSEG data, cited by the channel, Nvidia shares were rated by 66 analysts, with 60 of them recommending them to buy (Buy and Overweight ratings).

At the same time, Nvidia's $100 billion deal with OpenAI worried analysts on Wall Street. They saw it as a sign of a possible bubble and a bad sign for Nvidia, as it would essentially give OpenAI money that it would spend on buying equipment from Nvidia itself. This reminded analysts of the dot-com bubble and raised doubts about the deal's antitrust compliance.

This article was AI-translated and verified by a human editor