Nvidia’s stock has pulled back from last week’s post-earnings surge, opening at $220.60 on Tuesday and slipping about 1.1% in premarket trading. The move came as investors digested a major new agreement: Anthropic has signed a $35 billion cloud-computing deal with Lambda, a cloud provider backed by Nvidia. The data center supporting the project is leased by Nvidia itself from infrastructure firm Hut 8, and the facility will be filled with Nvidia GPUs and related hardware.
The arrangement has reignited criticism over so-called “circular financing.” Nvidia is an investor in Anthropic and a backer of Lambda, meaning an Nvidia-backed AI company is buying cloud capacity from an Nvidia-backed provider in an Nvidia-leased data center using Nvidia silicon. Nvidia executives have rejected the circular financing label, but the company has not disclosed key financial terms, including how much Lambda pays for the data center lease or whether Nvidia shares revenue from the Anthropic contract.
Beyond that deal, Nvidia has built a sprawling portfolio of AI-linked investments, including stakes or options in Corning, Marvell Technology, Lumentum, Coherent, CoreWeave, Nebius, Synopsys, Nokia, MediaTek, Intel, and SpaceX. Nvidia also announced a $3.5 billion investment in MediaTek, expanding a partnership covering data-center, edge-computing, and automotive AI.
Nvidia’s most recent quarterly results remain strong. The company posted revenue of $96.22 billion, up 105.9% year-over-year, and earnings per share of $2.22, beating the $2.09 consensus estimate. Net margin came in at 63.66%, with return on equity at 96.04%. Management guided for further growth, with revenue expected to reach $108 billion in the current quarter. The company also repurchased $26 billion in shares during the second quarter and has about $99 billion remaining in buyback authorization. Nvidia has reduced its outstanding share count to 24.15 billion, down from 25.06 billion in 2022.
Analysts have responded with bullish price targets. Needham lifted its target to $300, Argus to $270, and Goldman Sachs maintained a neutral rating but raised its target to $300. The consensus target sits at $324.23, with 50 of 55 tracked analysts holding a buy or strong buy rating. ARK Invest bought roughly $53 million of NVDA stock following a post-earnings dip. From a technical standpoint, shares remain above the 50-week exponential moving average and an ascending trendline, with some analysts seeing a potential move toward the psychological $300 level.
Still, risks are building. Supply chain pressures in memory, networking, optical components, power, and copper could weigh on margins. Insiders have sold about $299 million worth of stock over the past 90 days, and the twelve-month trading range for NVDA sits between $164.07 and $236.54.
