A $6 Billion Reason to Buy Nvidia Stock Now

Nvidia Corporation (NVDA) is making another aggressive move to strengthen its position in the global artificial intelligence (AI) race, and its recently reported $6 billion licensing deal with AI startup Poolside could prove strategically important, along with $1 billion in equity investment.

The agreement gives Nvidia access to Poolside’s AI model-development technology and brings more than 100 engineers into its Nemotron effort, as the chipmaker looks to accelerate open-weight AI models that can compete with increasingly capable Chinese alternatives such as DeepSeek and Kimi.

Nvidia is currently facing a tougher battle for China’s AI market. Beijing is encouraging domestic alternatives while U.S. export restrictions have limited Nvidia’s ability to sell its most advanced accelerators in the country, even as Chinese companies continue to rely on Nvidia hardware for demanding AI workloads.

By combining Poolside’s model-building technology with Nvidia’s massive AI ecosystem, the company could strengthen its software advantage, support demand for its computing infrastructure and create another avenue to remain relevant as the AI competition increasingly shifts from chips to complete AI platforms. Thus, the Poolside deal offers a fresh $6 billion reason for investors to view Nvidia’s AI strategy as extending well beyond GPUs.

About Nvidia Stock

Nvidia is a global leader in accelerated computing and AI, renowned for pioneering the GPU that revolutionized gaming, data centers, and AI-driven computing. Headquartered in Santa Clara, California, Nvidia’s technology now powers everything from high-performance gaming and cloud computing to autonomous vehicles and generative AI applications. With a market cap of $5.2 trillion, Nvidia stands among the world’s most valuable companies, driven by its dominance in AI infrastructure and continued innovation in next-generation chip design.

NVDA has delivered strong gains in 2026, although the stock has recently come under pressure ahead of its fiscal second-quarter earnings report. Nvidia has generated a 13.1% year-to-date (YTD) return and gained 16.1% over the past year.

The stock reached a 52-week high of $236.54 in May and is currently trading 10.7% below its 52-week peak.

Meanwhile, the recent pullback has been notable. Nvidia suffered seven consecutive sessions of declines through Monday, Aug. 24, before gaining about 2.2% in the last session.

Importantly, the market reaction to Nvidia’s reported $6 billion Poolside licensing deal has been cautious rather than bullish. Nvidia shares fell 2.9% on Aug. 24, with investors focusing more heavily on the company’s upcoming earnings and concerns about elevated AI valuations than on the strategic significance of the Poolside agreement.

With the company set to report earnings on Aug. 26, the stock is entering a potentially decisive catalyst with high stakes surrounding the report.

Nvidia trades at 23.69 times forward price-to-earnings and 23.36 times sales, which is currently a premium compared to industry peers.

Solid Q1 Earnings

Nvidia delivered another exceptional quarter when it reported first-quarter fiscal 2027 results on May 20, further cementing its leadership in the rapidly growing AI infrastructure market.

For the quarter ended Apr. 26, 2026, Nvidia posted record revenue of $81.6 billion, an 85% year-over-year (YOY) increase, while net income jumped 211% YOY to $58.3 billion. On a non-GAAP basis, earnings per share (EPS) rose 140% from the prior-year period to $1.87, beating analyst estimates. Non-GAAP gross margin expanded to 75% from 60.8% a year earlier, underscoring the company’s strong pricing power and favorable AI product mix.

Moreover, the Data Center segment remained Nvidia’s biggest growth driver, with revenue surging 92% YOY to a record $75.2 billion. Data Center networking revenue soared 199% YOY to $14.8 billion, while computing revenue accounted for the remaining $60.4 billion.

Its Edge Computing revenue increased 29% YOY to $6.4 billion, supported by demand across gaming GPUs, autonomous driving, robotics, and AI-enabled edge devices.

Management also pointed to accelerating adoption of Blackwell systems and highlighted expanding opportunities in agentic AI and enterprise AI infrastructure.

Additionally, Nvidia issued another optimistic outlook for the second quarter of fiscal 2027, forecasting revenue of $91 billion, plus or minus 2%, and a non-GAAP gross margin of about 75%. The guidance assumes no contribution from China Data Center compute revenue due to ongoing U.S. export restrictions.

Street expects Nvidia’s momentum to continue, with analysts forecasting EPS growth of 92.6% YOY to $8.80 in fiscal 2027, followed by another 43.1% increase to $12.59 in fiscal 2028. The consensus EPS estimate for Q2 (about to be reported on Aug. 26) is $2.09, a rise of 111.1% YOY.

Wall Street Remains Positive About Nvidia

Raymond James maintained a “Strong Buy” rating on Nvidia on Aug. 25, while raising the price target to $352 from $330. The bullish call reflects growing confidence in Nvidia’s CPU opportunity, which Raymond James expects to expand from roughly 3% of sales currently to about 5% by calendar 2028.

Also, Rosenblatt Securities reiterated its “Buy” rating on Nvidia on Aug. 24, with a $325 price target. Analyst Kevin Cassidy expects Nvidia’s upcoming fiscal second-quarter results to beat consensus estimates for both revenue and earnings, while also anticipating stronger-than-expected fiscal third-quarter guidance.

Overall, NVDA has a consensus “Strong Buy” rating. Of the 48 analysts covering the stock, 43 advise a “Strong Buy,” three suggest a “Moderate Buy,” one recommends a “Hold,” and one offers a “Strong Sell” rating.

The average analyst price target for NVDA is $307.38, indicating a potential upside of 45.6%. Also, the Street-high target price of $500 suggests that the stock could rally as much as 136.8%.