Nvidia stock up 2% after Meta deal: analysts see more upside

Nvidia stock moved higher on Wednesday after the semiconductor company announced a sweeping multiyear partnership with Meta Platforms.

The deal is to supply millions of artificial intelligence chips across multiple product generations.

The agreement, announced after the market closed on Tuesday, pushed Nvidia shares up 2.3% to $191.40 on Wednesday.

The partnership is aimed at supporting Meta’s expanding artificial intelligence and data centre infrastructure.

The deal covers Nvidia’s current and next-generation products and signals continued strong demand for the company’s hardware, even as major technology firms pursue their own chip development efforts.

Details of the Nvidia-Meta deal

Under the agreement, Nvidia will supply a wide range of products, including its Blackwell graphics processing units and its forthcoming Rubin AI chips.

The partnership also extends into central processing units, placing Nvidia in more direct competition with Intel and Advanced Micro Devices.

The deal includes deployments of Nvidia’s Grace and Vera central processors, which are built on technology from Arm Holdings.

These processors are positioned as alternatives to traditional server CPUs and reflect Nvidia’s growing ambitions beyond graphics and AI accelerators.

The agreement underscores Nvidia’s continued influence in the AI infrastructure market, even as hyperscale cloud operators seek to reduce dependence on third-party suppliers through internal chip initiatives.

Meta’s AI ambitions

Meta said the expanded partnership would help accelerate its artificial intelligence strategy and large-scale computing capabilities.

“We’re excited to expand our partnership with NVIDIA to build leading-edge clusters using their Vera Rubin platform to deliver personal superintelligence to everyone in the world,” Meta Chief Executive Officer Mark Zuckerberg said in a statement late Tuesday.

In addition to chips, Meta will expand its use of Nvidia’s Spectrum-X Ethernet networking platform to improve data centre efficiency and throughput.

The company has also adopted Nvidia’s Confidential Computing technology for WhatsApp to enable advanced AI features while maintaining user privacy.

These elements highlight the broad scope of the collaboration, which goes beyond processors to include networking and security technologies.

Analyst reaction and market outlook

Following the announcement, Stifel reiterated a Buy rating on Nvidia shares and maintained a price target of $250.

The firm said it expects hyperscalers to continue investing in internal silicon projects and related networking initiatives with partners such as Celestica and Arista Networks.

“While we expect hyperscalers to continue to invest in internal silicon projects (and related networking initiatives) with vendors such as… Arista Networks, we continue to expect Nvidia to compete effectively with a full-stack architecture approach,” Stifel analyst Ruben Roy wrote in a research note on Wednesday.

The analyst commentary suggests that, despite increasing competition and in-house chip development, Nvidia’s integrated hardware and software strategy remains a key competitive advantage.