Nvidia (NVDA) is climbing 2% after Bloomberg reported that Project Stargate, the massive AI infrastructure initiative, will probably utilize about 64,000 of the company's graphics processing units (GPUs) by December 2026.

NVDA's GPUs are widely used to train AI models.

A close-up of a colorful high-end graphics card being plugged in to a gaming computer.

Additional Information About the Report

NVDA's 64,000 chips are slated to be utilized by a single data center in Texas within the framework of Project Stargate, Bloomberg noted. And by this summer, 16,000 of NVDA's GPUs will support the data center, the news service added.

Oracle and OpenAI are jointly developing the data center in Texas, OpenAI reported.

Project Stargate, which is expected to invest a total of $100 billion in AI infrastructure, is being led by Oracle (ORCL), OpenAI, and Softbank (SFTBY). Unveiled at the White House in January, the project may use as many as 10 data centers eventually.

More Information About NVDA

Analysts on average expect the chip maker's earnings per share to jump to $4.50 this year from $2.99 in 2024.

The shares have a forward price-to-earnings ratio of 25 times and an Enterprise Value/EBITDA ratio of 31 times.

In the last month, NVDA has dropped 15%, while it is down 22% in the last three months. NVDA has sunk 18% so far this year.

While we acknowledge the potential of NVDA, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey