Nvidia just invested $3 billion in Meta Platforms for new AI hardware
Nvidia is investing $3 billion into Meta Platforms.
The short version
- Meta will deploy new Nvidia Vera Rubin systems and networking tech.
- Nvidia stock is up 17% since the start of the year.
Nvidia, the chip designer behind the artificial intelligence boom, just pumped $3 billion into Meta, which owns Facebook and WhatsApp, as part of a massive new hardware deal. According to Barchart, Nvidia shares are climbing on Tuesday as investors digest the heavy cash injection.
Meta has agreed to deploy Nvidia's Vera Rubin systems and Vera CPUs, alongside advanced networking technology, to power its massive computing operations. Together, the two tech giants will optimize artificial intelligence workflows to slash operating costs. The multi-billion-dollar partnership ties Nvidia deeper into Meta's massive tech spending spree.
But the agreement also exposes Nvidia to Meta's share-price swings and revives whispers of circular financing on Wall Street. Even with the deal, the chip darling is trading about 9% below its year-to-date high. Nvidia's upcoming earnings report on November 18 sits just weeks away as a major test for the stock.
Analysts expect the semiconductor behemoth to post $2.49 in earnings per share, doubling its performance from last year. Piper Sandler, an investment bank and brokerage firm, recently reiterated an overweight rating on Nvidia with a $300 price target. Wall Street consensus remains a strong buy with an average price target of $329. For your portfolio, the chipmaker's relentless hardware push shows no signs of slowing down just yet.
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