Will Nvidia feature in the ‘Trump trade’? According to Melius Research, the new Stargate joint venture might indicate more AI-friendly future directions and support the long-term expansion patterns of the business.
Why is the new Stargate project so significant to Nvidia Corp.? One analyst ran down the reasons when the stock started surging once more on Wednesday.
First of all, while the business tries to scale output of its new Blackwell chip, investors have increasingly been focusing on the nitty gritty of the next several quarters. But Melius Research analyst Ben Reitzes says the recently revealed Stargate joint venture “sure puts [the] Blackwell transition in perspective,” and might inspire a $500 billion investment in artificial- intelligence infrastructure over the next four years.
Based on his analysis, “well over” $100 billion of the Stargate expenditure might go toward Nvidia (NVDA), with more going to companies like Broadcom Inc. (AVGO) and Arista Networks Inc. (ANET) also relevant for computation and networking.
Following Tuesday trading’s rise of 2.3%, Nvidia’s stock is up 4.1% in morning trade Wednesday.
Late last year, Broadcom delighted investors when its management projected a huge artificial intelligence market opportunity. Reitzes said the Stargate project, which President Donald Trump unveiled on Tuesday alongside executives from investment partners OpenAI, SoftBank Group Corp. (JP:9984) and Oracle Corp. (ORCL), would turn out for Nvidia similarly.
“Perhaps Nvidia just got their closest equivalent to what Broadcom’s CEO Hock Tan just did with his long-term forecast,” he said, adding the big-picture possibility with Stargate “makes the next quarter or two seem completely irrelevant.”
Though all the nitpicking about current timing patterns with the Blackwell ramp, it’s not as if Nvidia investors weren’t also considering the longer-term picture well before the Stargate announcement. Reitzes believes the project should also help to allay worries investors might have regarding the long term.
“Can the company grow off of tremendous numbers in 2026 and 2027?” Reitts inquired. After the Biden government moved to AI restrict chip exports, he had been more hesitant on those development prospects; while it’s possible the Trump administration loosens those rules, he believes Nvidia seems to be in good place for expansion even without such involvement.
Selling to the United States “could be much bigger than we thought,” Reitzes noted, pointing out that most of the Stargate expenditure is small relative to Nvidia. By his calculations, even $20 billion in more expenditure on Nvidia goods during calendar 2026 maintains Nvidia’s growth pace; a figure like $40 billion is not out of the reach of possibility.
Reitzes also have some encouraging news for Nvidia investors in that “Trump’s first AI-friendly initiative may be signaling something,” meaning the president might make more AI-friendly initiatives down the line. Should such be the case, “just like Oracle, maybe Nvidia gets to be part of the ‘Trump trade.'” he said.
