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Nvidia stock has rebounded sharply from its late-August weakness as investors reassess the durability of global artificial-intelligence infrastructure spending.
NVDA closed Sept. 3 at $228.45, up 1.8% for the session after reaching an intraday high of $230.40. The stock now trades within roughly 3% of its 52-week and record high of $236.54.
The recovery coincided with Nvidia’s $12.93 billion agreement to acquire Hugging Face and several other large AI investments. Those transactions reinforce Nvidia’s strategy of expanding beyond GPU sales into software platforms, custom silicon, cloud infrastructure and financing.
Nvidia Stock Rises After $12.93B Hugging Face Acquisition
There are signs that Nvidia is becoming the central bank of the AI industry, thanks to its huge revenue growth and balance sheet.
The company has spent billions of dollars making major investments in the sector. Just this week, it announced a $13 billion deal to buy Hugging Face, a top player in the open-source AI industry. This makes it its biggest acquisition ever and positions it for growth as the AI boom gains steam.
Nvidia also announced a $3.5 billion investment in MediaTek, a top fabless semiconductor company that designs chips used across the technology industry. It counts companies like Xiaomi, OPPO, Vivo, and Samsung as its top clients.
The company is in talks to invest $2.5 billion in Thinking Machines, a company started by Mira Murati, who left OpenAI last year. Thinking Machines has recently launched Tinker and Inkling, which it hopes will become major players in the AI industry.
Nvidia has written more checks in the past few months. It announced a $30 billion investment in OpenAI, which may pay off substantially when the company goes public. It also announced a big investment in Anthropic, a company that is plotting a $2 trillion IPO. This listing may happen either later this month or early October.
The company has also announced large investments in companies like CoreWeave, Nebius, and IREN, which are among the largest buyers of its semiconductors. It also allocated capital in companies like Coherent, Lumentum, and Intel.
Most recently, Nvidia announced that it will provide the financing backstop for OpenAI’s large data center in Ohio. It also announced a huge deal that will see top financial companies like Goldman Sachs, Brookfield, and Blackstone provide $ 500 billion in financing in the AI space.
Nvidia Has One of the Best Balance Sheets in The World
Nvidia is able to make these investments because of its strong free cash flow (FCF) and balance sheet. Its most recent results showed that its revenue jumped to over $96 billion, while its net profit stood at over $59 billion. This means that its recent investments are just a small part of what it made in the last quarter.
The company has become a big free cash flow machine. Its FCF came in at over $21 billion, and the company predicts it will exceed $100 billion this year. FCF is an important metric that measures the amount of money remaining after a company makes its investments.
Its strong free cash flow means that the company has the resources to continue its investments and return to investors. It is now implementing a $90 billion share buyback program.
Nvidia Stock Price Technical Analysis
NVDA stock chart | Source: TradingView
The weekly chart shows that the NVDA stock has rebounded in the past few months and is now hovering near its highest level on record. It has jumped above the ascending trendline that links the lowest level in March and July this year.
The stock has remained above the 50-week moving average and the Supertrend indicator, a sign that bulls are in control. Therefore, the most likely scenario is where it continues to rally, potentially to the all-time high of $236. A move above that price will point to more gains.
This article is for informational purposes only and does not constitute financial advice. Equity markets can experience sharp price movements.
