Melius Research says the new Stargate joint venture may signal more AI-friendly moves ahead and help Nvidia’s company’s long-term growth
Why is the new Stargate initiative so important for Nvidia Corp.? With the stock rising again on Wednesday, one analyst ran down the reasons.
To start, investors have been focused lately on the nitty-gritty of the next few quarters as the company works to ramp up production of its new Blackwell chip. But the newly announced Stargate joint venture, which could drive a $500 billion investment in artificial-intelligence infrastructure over the next four years, “sure puts [the] Blackwell transition in perspective,” according to Melius Research analyst Ben Reitzes.
By his assessment, “well over” $100 billion of Stargate spending could go toward Nvidia (NVDA), with more going to companies like Broadcom Inc. (AVGO) and Arista Networks Inc. (ANET) that also play into computing and networking.
Nvidia’s stock is up 4.1% in morning action Wednesday after rising 2.3% in Tuesday trading.
See also: Oracle, Nvidia and other Big Tech stocks jump as Trump rolls out Stargate AI initiative
Broadcom thrilled investors late last year when its management forecast a massive market opportunity related to artificial intelligence. Reitzes said the Stargate initiative, which President Trump announced on Tuesday alongside executives from investment partners OpenAI, SoftBank Group Corp. (JP:9984) and Oracle Corp. (ORCL), could end up being a similar impetus for Nvidia.
“Perhaps Nvidia just got their closest equivalent to what Broadcom’s CEO Hock Tan just did with his long-term forecast,” he wrote, meaning the big-picture opportunity with Stargate “makes the next quarter or two seem completely irrelevant.”
Despite all the nitpicking over current timing trends with the Blackwell ramp, it isn’t as if Nvidia investors weren’t also thinking about the longer-term view long before the Stargate announcement. Reitzes said the initiative should quell concerns investors may have had about the long run as well.
“Can the company grow in 2026 and 2027 off of huge numbers?” Reitzes asked. He had been more cautious about those growth prospects after the Biden administration moved to restrict AI-chip exports. While it’s possible the Trump administration will loosen those rules, he said Nvidia looks to be in good shape for growth even without that intervention.
The U.S. market “could be much bigger than we thought,” Reitzes wrote, noting that most of the Stargate spending seems incremental to Nvidia. By his math, even $20 billion in additional spending on Nvidia products during calendar 2026 supports Nvidia’s growth rate, while a number like $40 billion isn’t out of the realm of possibility.
Meanwhile, there is some good news for Nvidia investors, as “Trump’s first AI-friendly initiative may be signaling something,” like that the president may make more AI-friendly moves down the road, according to Reitzes. If that’s the case, “just like Oracle, maybe Nvidia gets to be part of the ‘Trump trade,'” he added.