TLDR
- Nvidia shares jumped Monday after Trump posted that China relations “will all be fine,” easing tariff fears that sparked Friday’s selloff
- CEO Jensen Huang said Blackwell GPU demand is “really, really high” and confirmed the company’s role in Elon Musk’s xAI project
- Piper Sandler kept its $225 price target, citing demand exceeding supply across all Nvidia product lines
- The chipmaker’s $100 billion OpenAI deal will deploy 10 gigawatts of AI data centers using Nvidia processors
- Q2 results showed earnings of $1.05 per share on $46.74 billion in sales, both topping estimates
Nvidia stock climbed Monday after a rough end to last week. President Trump eased market concerns about escalating trade tensions with China.
Trump posted Sunday on Truth Social that China issues would work out fine. This calmed nerves after his Friday threat of 100% tariffs on Chinese imports.
The Friday drop came after China restricted rare-earth material exports. These materials are essential for making semiconductors.
AI Demand Remains Strong
CEO Jensen Huang gave updates in a CNBC interview last week. He said demand for the company’s Blackwell graphics processing units is “really, really high.”
Huang confirmed Nvidia’s participation in Elon Musk’s xAI artificial intelligence venture. The confirmation came after Bloomberg first reported the news.
Piper Sandler maintained its Overweight rating with a $225 price target. The firm said demand continues to exceed manufacturing capacity across Nvidia’s entire product lineup.
The research firm noted Nvidia’s customer funding deals appear solid. Partnerships with OpenAI and CoreWeave aren’t facing the circular financing issues hitting other tech firms.
Taiwan Semiconductor posted strong September numbers Thursday. The Nvidia supplier saw sales jump 31% year-over-year to $10.9 billion.
Big Partnership Moves
Nvidia invested $100 billion in ChatGPT maker OpenAI back in September. The deal calls for OpenAI to deploy at least 10 gigawatts of AI data centers running Nvidia chips.
AMD also struck an OpenAI partnership this week. The company will power 6 gigawatts of OpenAI infrastructure with its graphic processing units.
The Nvidia-OpenAI arrangement might attract antitrust scrutiny. Lawyer Andre Barlow told Reuters the deal could get Department of Justice attention.
Evercore ISI bumped up its Nvidia sales forecast by $5.5 billion for late 2026. The firm raised its price target from $214 to $225.
Bank of America analysts think the OpenAI investment will return three to five times the initial amount. Bernstein analyst Stacy Rasgon questioned Nvidia investing in startups that then purchase its GPUs.
However, Rasgon said overall demand stayed healthy. Huang noted the U.S. isn’t “not far ahead” of China in AI tech despite better models.
Latest Financial Numbers
Nvidia posted fiscal Q2 earnings of $1.05 per share. That beat the $1.01 estimate.
Revenue of $46.74 billion topped the $46.05 billion forecast. The company showed zero sales from its China H20 chip.
Fiscal Q3 revenue guidance came in at $54 billion. Analysts expected $53.43 billion.
The company announced a $60 billion stock buyback program. In August, Nvidia got a license to sell H20 chips in China.
That deal requires the company to pay 15% of China chip revenue to the U.S. government. Piper Sandler says the company looks ready to hit Wall Street targets even without H20 revenue in Q3 guidance.
