Nvidia (NASDAQ:NVDA) stock has hit new heights in 2025. Its graphics processing units (GPUs) have become the critical hardware powering artificial intelligence (AI) training and inference. But the stock jumped again this week on some big news. Let’s explore.
ChatGPT investment
On 22 September, Nvidia announced a landmark partnership with Microsoft-backed OpenAI, committing up to $100bn (£73bn) to build and deploy at least 10 gigawatts of next-generation AI data centres.
For shareholders, the news underlines Nvidia’s ambition to cement its position not just as the leading chipmaker but as the backbone of global AI infrastructure. Nvidia will also receive a significant equity stake in OpenAI — the developer of AI chatbot ChatGPT.
The collaboration will see millions of Nvidia GPUs power OpenAI’s next models, with the first gigawatt of capacity expected to go live in the second half of 2026 on Nvidia’s new Vera Rubin platform. OpenAI has grown rapidly, with over 700m weekly active users, and demand for compute to support this expansion looks enormous.
Nvidia will serve as OpenAI’s preferred strategic compute and networking partner. The two firms will co-optimise their roadmaps, aligning Nvidia’s hardware and software with OpenAI’s model and infrastructure development.
Importantly, this partnership does not preclude Nvidia from working with rivals such as Anthropic or xAI, leaving the door open for additional growth. This deal could be worth as much as $500bn in revenue over time, Bank of America said. Of course, only time will truly tell.
Is Nvidia still a good investment?
Nvidia’s market position remains unmatched. Its GPUs power the bulk of AI data centres, making the company indispensable to OpenAI and other generative AI players.
Its technological moat — from hardware to software ecosystem integration — creates high switching costs, reinforcing its dominance.
From a valuation perspective, Nvidia trades at a forward price-to-earnings ratio of 39.67, down from the 2025 figure of 59.68. This continues to suggest the company is experiencing rapid growth.
Its forward P/E-to-growth (PEG) ratio of 1.11 is also lower than the sector average of 1.87, suggesting expected earnings growth is strong relative to price.
While absolute multiples remain elevated versus peers, the gradual decline in P/E and PEG over the next few years, combined with dominant market share, makes Nvidia well worth consideration for investors willing to accept a premium for long-term growth potential.
Of course, there are risks. So far, investments in AI have surpassed most people’s expectations with one big deal after the next. However, there’s obviously some concern that these huge investments won’t go on forever. I’m a bull, but it’s a risk I accept.
It’s not a risk I’ve seen discussed before, but I’m also wondering whether we’ll one day see traditional compute replaced by quantum computing in certain areas. Nvidia may not be a leader in the quantum era, although it certainly has a good chance to be.
The bottom line
Nvidia isn’t expensive in my book, and the ChatGPT tie up simply adds to my bullishness. I believe the stock will push higher, and the ChatGPT investment could be part of that.
