Nvidia guarantees OpenAI data center; shares up

Nvidia shares were advancing 0.8% to $226.90 on Monday after the heavyweight chipmaker agreed to guarantee up to $105 billion for an OpenAI data center in Ohio.

The deal, which also includes a $1.5 billion investment in developer SB Energy, helps secure long-term demand for Nvidia chips.

The agreement is the latest example of Nvidia financing infrastructure built using its AI processors, and may add to investor concerns about "circular funding" deals between Nvidia and its customers.

The stock is on track for its highest close since May 14, when it notched a record high close. The stock remains down about 4% from that May 14 close.

Nvidia has rallied about 22% year-to-date, outperforming a 15% rise in the Nasdaq.

The stock was recently at 20 times expected earnings, well below its average forward P/E of 35 over the past five years, according to LSEG data.

The median analyst price target is $286.50, implying 26% upside, with 59 of 62 analysts rating the stock a "buy" or "strong buy".