Nvidia stock (NASDAQ: NVDA) surged over 1.5% on Tuesday, following the company’s $2 billion investment in CoreWeave.
The investors remain focused on the strategic tie-up as a signal of locked-in demand for Nvidia’s AI chips amid sustained hyperscaler spending plans.
Strategic positioning reinforces Nvidia’s AI infrastructure prospects
Nvidia purchased approximately 23 million shares of CoreWeave Class A common stock at $87.20 per share, boosting its ownership to roughly 9% and making it the cloud provider’s second-largest shareholder.
This builds on Nvidia’s prior 6.3% stake and a previously disclosed commitment to buy more than $6 billion in services from CoreWeave through 2032.
The deal accelerates CoreWeave’s ambition to build over 5 gigawatts of AI data-center capacity by 2030, a forward-looking target the company calls “AI factories.”
CoreWeave serves major hyperscalers and AI developers, positioning it as an early adopter of Nvidia’s next-generation Rubin chips alongside Blackwell platforms.
This partnership enhances Nvidia’s demand visibility by embedding the chipmaker deeper into the infrastructure buildout.
Nvidia CEO Jensen Huang called it a vote of confidence in CoreWeave’s growth and business model, emphasizing aligned engineering efforts to deploy computing capacity faster.
Analysts see it as a classic Nvidia ecosystem play with high switching costs via full-stack integration of chips, networking, and software.
Nvidia stock reflected the news with a modest pullback.
It closed Monday at $186.47 after trading between $185.99 and $189.12 on volume of about 124.8 million shares.
On Tuesday, shares were trading around $189.02 amid lighter volume, while CoreWeave’s valuation popped in response.
Nvidia stock: AI spending resilience outweighs competition concerns
The muted Nvidia reaction belies broader optimism about AI infrastructure demand.
Nvidia CFO Colette Kress recently noted the company’s $500 billion revenue visibility for current and future data-center chips through end-2026 “has definitely gotten larger” due to surging customer interest.
Q3 fiscal 2026 data-center revenue hit $51.2 billion, 90% of total sales, with Q4 guidance at $65 billion.
Wall Street consensus supports the bull case.
Evercore ISI reiterated Outperform with a $352 price target, citing Nvidia’s attractive 2026 PEG ratio below sector parity.
Average analyst targets cluster around $255–$263, implying 37–41% upside. Forward P/E estimates hover in the mid-20s to low-30s range, reflecting growth baked into valuations.
Competition from custom chips like Amazon’s Trainium3 or Google’s TPUs erodes pricing power, but analysts argue total compute demand expands faster than any single vendor loses share.
Nvidia retains 80% AI accelerator dominance.
Risks remain as capex slowdowns, China export curbs, or production scaling hiccups could pressure the 46x trailing P/E multiple.
Meta and Microsoft earnings on January 28 carry weight as any reaffirmation of AI budgets could reignite momentum.
For now, the CoreWeave bet validates Nvidia’s moat in a spending cycle that’s far from peaked.
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