TLDR
- Nvidia shares dropped 4.4% to $180.03 on Tuesday as Oracle partnered with AMD to deploy 50,000 AI chips by Q3 2026
- The company invested $2 billion in Elon Musk’s xAI and secured deals to supply up to 200,000 Blackwell GPUs
- U.S. approved Nvidia to export 500,000 advanced AI chips annually to UAE, unlocking billions in new revenue
- Nvidia launched DGX Spark supercomputer targeting smaller developers with GB10 Grace Blackwell chip technology
- Company posted $165.2 billion in trailing revenue with 52.4% profit margins as Cantor Fitzgerald set $300 price target
Nvidia Corporation shares closed down 4.4% at $180.03 on Tuesday as investors weighed growing competition in the artificial intelligence chip market. The decline came despite several positive developments for the company.
The stock had gained 2.8% on Monday before Tuesday’s selloff. Nvidia’s market cap stands at $4.47 trillion with a trailing P/E ratio of 53.8.
Oracle triggered concerns when it announced a partnership with AMD for AI infrastructure. The cloud company will deploy 50,000 AMD Instinct MI450 processors starting in Q3 2026.
This marks AMD’s first rack-scale, 72-processor AI server offering. AMD shares rose 0.8% while Broadcom fell 3.5%.
xAI Deal and UAE Approval Fuel Growth
CEO Jensen Huang confirmed a $2 billion investment in Elon Musk’s xAI startup. The deal includes supplying and retaining ownership of GPUs for xAI’s Colossus 2 data center.
Musk plans to raise $20 billion to expand to 200,000 Nvidia Blackwell GPUs. The arrangement guarantees long-term demand while representing just 2% of quarterly revenue.
Huang called Musk a “visionary partner” and said he wished he “had given him more money.” The company maintains $56.8 billion in cash reserves.
The U.S. Commerce Department granted export licenses for up to 500,000 GPUs annually to the United Arab Emirates. The authorization covers H100 and Blackwell-class processors.
About 100,000 units will go to Abu Dhabi-based G42. Industry sources estimate the deal could boost annual revenue by several percentage points.
Record Financial Performance Continues
Nvidia posted trailing twelve-month revenue of $165.2 billion, more than double fiscal 2024’s $60.9 billion. Net income reached $86.6 billion with 52.4% profit margins.
Data center sales contributed over $108 billion. Q2 FY2026 delivered $46.7 billion, up 78% year-over-year.
Gross margins stood at 69.8% with operating margins near 61%. Return on equity exceeds 109%.
The company generated $77 billion in operating cash flow. It maintains a 10.6% debt-to-equity ratio.
Wall Street’s consensus 12-month target sits around $216. Cantor Fitzgerald set a $300 price target, citing AI leadership and multi-year growth.
Analysts project FY2026 revenue climbing 58% to $206.6 billion. FY2027 should see another 33% increase.
EPS is expected to rise from $4.51 this year to $6.38 next year. The PEG ratio of 1.0 suggests reasonable valuation relative to growth.
Nvidia unveiled the DGX Spark, a compact AI supercomputer with the GB10 Grace Blackwell superchip. The system scales up to 128GB of memory.
The first units were delivered to Elon Musk. Nvidia positions Spark as an entry point for smaller developers beyond hyperscaler customers.
Rivals including Broadcom, AMD, and major cloud providers are developing custom AI chips. Gartner predicts 40% of AI workloads may shift to custom silicon by 2027.
U.S. export restrictions limit China sales by $8 to $11 billion annually. Tuesday’s decline followed renewed trade tensions between the U.S. and China.
Nvidia reports fiscal Q3 earnings on November 19. Investors will watch for revenue growth above 50% and gross margins near 70%.
