Elon Musk's xAI Plans $30–$40 Billion GPU Buy Near Memphis — Gene Munster Says Its A 'Good Day' To Be A Nvidia Salesperson
Elon Musk's AI company, xAI, plans to invest $30–$40 billion in 1 million GPUs near Memphis, primarily from Nvidia. Gene Munster of Deepwater Asset Management highlighted this potential, suggesting it could significantly boost Nvidia's revenue. Nvidia is set to report earnings on May 28, with analysts expecting earnings of 89 cents per share on $43.07 billion in revenue. Currently, Nvidia shares are trading at $134, with a consensus price target of $172.32, indicating potential growth.
On Tuesday, Deepwater Asset Management's managing partner, Gene Munster, noted that Elon Musk's AI enterprise xAI's plans for a massive investment could result in Nvidia Corporation NVDA as the biggest beneficiary.
What Happened: In a post on X, formerly Twitter, Munster highlighted Musk's revelation on CNBC that his AI company, xAI, plans to deploy 1 million GPUs near Memphis.
The majority of the 1 million GPUs expected to be deployed will come from Nvidia, with a smaller portion supplied by Advanced Micro Devices AMD, said Munster, adding that the estimated total cost of acquiring these chips could range between $30 billion and $40 billion.
“If it was done in CY26, it would account for about 15% of the current Street revenue estimate,” he stated, adding, “Good day to be an Nvidia salesperson.”
Why It's Important: Nvidia is scheduled to release its first-quarter earnings on May 28 after the market closes. Analysts, as per Benzinga Pro, expect the company to post earnings of 89 cents per share on revenue of $43.07 billion.
The stock currently holds a consensus price target of $172.32, based on ratings from 39 analysts. The highest target, $220, was issued by Rosenblatt on Feb. 24, 2025.
Recent updates from BofA Securities, UBS and Seaport Global have set an average price target of $145, indicating a potential upside of 8.21%.
Price Action: Nvidia shares have dropped 0.28% in after-hours trading, currently sitting at $134, according to Benzinga Pro data.
According to Benzinga Edge Stock Rankings, Nvidia holds a robust growth score of 95.02%. Click here to see how it compares to other leading tech companies.
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