A Major $12.9 Billion Catalyst Is Brewing for Nvidia Stock

Subhasree Kar

Sun, August 30, 2026 at 5:15 PM GMT+3 6 min read

NVDA -4.57%

Nvidia Corporation (NVDA) may be setting up another major catalyst for investors as the chip giant reportedly agreed to acquire Hugging Face for $12.9 billion. According to The Information, the deal would rank among Nvidia's largest acquisitions and give the company control over one of the most important platforms in the open-source artificial intelligence (AI) ecosystem.

The strategic logic extends well beyond simply adding another AI company to Nvidia's portfolio. Hugging Face hosts millions of AI models and datasets and has become a key destination for developers building and deploying open-source AI. Owning the platform could allow Nvidia to strengthen its position at the software and developer layer of AI, potentially reinforcing demand for its GPUs and CUDA ecosystem. It could also provide a counterweight to closed-model leaders such as OpenAI and Anthropic, which are increasingly pursuing proprietary AI chips that could reduce their dependence on Nvidia.

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The reported acquisition arrives as Nvidia's AI growth story remains exceptionally strong. The company just delivered another powerful quarterly performance, while its latest outlook points to continued AI-driven growth. If completed, the $12.9 billion Hugging Face deal could give Nvidia another powerful lever to extend its AI dominance from the chips powering the revolution to the models and developers driving it.

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 $5.5 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 regained strong upward momentum after a period of consolidation, with the latest earnings report providing a major boost to the stock. Shares closed at $227.98 on Aug. 27, jumping 8.7% in a single session and marking Nvidia's largest-ever one-day increase in market capitalization. The stock's latest rally came after the company delivered stronger-than-expected quarterly results and issued an outlook calling for roughly 70% revenue growth in fiscal 2028, easing concerns about a potential slowdown in AI infrastructure spending.

NVDA is now up 16.7% year-to-date (YTD) and nearly 20.8% over the past 52 weeks. The stock's 52-week high stands at $236.54, reached on May 14, leaving shares only about 8% below that record level.

Recent trading has been particularly volatile ahead of the earnings release. Nvidia fell 1.6% to $209.66 on Aug. 26, following a string of declines, before its powerful post-earnings rebound.

With NVDA now trading close to its 52-week high, the potential Hugging Face acquisition could provide another catalyst for the stock if it strengthens Nvidia's position across the AI software and open-source model ecosystem. The acquisition reports broke concurrently with Nvidia's strong quarterly earnings report.

Meanwhile, Nvidia is expanding well beyond its traditional role as an AI chipmaker. Recently, the company reportedly agreed to pay $6 billion to license Poolside's AI model-development software, while separately investing $1 billion in the startup and bringing more than 100 Poolside engineers into Nvidia's open-weight Nemotron effort.

Nvidia is also accelerating its infrastructure reach as it recently announced partnerships with major financial firms to mobilize more than $500 billion of third-party capital for AI compute infrastructure, while its expanded AWS partnership is expected to bring 2 million additional Nvidia GPUs to AWS infrastructure in 2027–2028.

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Nvidia trades at 23.82 times forward earnings and 23.50 times sales, which is currently a premium compared to industry peers.

Solid Q2 Earnings

Nvidia delivered another blockbuster quarter, reporting its fiscal second-quarter 2027 results on Aug. 26, for the quarter ended July 26. Revenue reached a record $96.2 billion, up 106% year-over-year (YOY) from $46.7 billion, and increased 18% sequentially. The result also comfortably exceeded Nvidia's prior guidance of $91 billion, plus or minus 2%.

The company's profitability expanded even faster. On a non-GAAP basis, net income climbed 118% to $54 billion, versus $24.8 billion in Q2 fiscal 2026, while adjusted EPS jumped 120% to $2.22, exceeding expectations. Non-GAAP gross margin rose to 75% from 72.5%. Operating income surged 124% to $63.7 billion.

Nvidia's Data Center segment remained the primary growth engine, generating $89 billion in revenue, up 117% YOY from the prior-year quarter and representing majority of total company revenue. The performance reflects continued demand for Nvidia's accelerated-computing platforms as hyperscalers and AI companies expand infrastructure.

Furthermore, Nvidia issued an even stronger outlook. For Q3 fiscal 2027, the company expects revenue of $108 billion, plus or minus 2%. Importantly, the forecast assumes no Data Center compute revenue from China. Nvidia expects GAAP and non-GAAP gross margins of approximately 74%, plus or minus 50 basis points.

Its worth noting that Nvidia is not merely maintaining its AI growth trajectory, it is accelerating it, with management pointing to full production of its next-generation Vera Rubin platform and continued strength across AI infrastructure.

Street expects Nvidia's momentum to continue, with analysts forecasting EPS growth of 95.2% YOY to $8.92 in fiscal 2027, followed by another 41.1% increase to $12.59 in fiscal 2028.

Wall Street Remains Positive About Nvidia

Wall Street analysts have become even more bullish on Nvidia following the company's stronger-than-expected fiscal second-quarter results and upbeat outlook.

Bernstein maintained its "Outperform" rating on Nvidia and raised its price target sharply to $400 from $315 on Aug. 27.

Also, JPMorgan maintained its "Overweight" rating on Nvidia and raised its price target to $320 from $280 on Aug. 27, citing Nvidia's stronger-than-expected July-quarter results and October-quarter revenue outlook, while highlighting accelerating Data Center growth.

The most aggressive call came from Raymond James, which maintained its "Strong Buy" rating but raised its price target dramatically to $515 from $352, reflecting confidence in Nvidia's prospects. Analyst Simon Leopold even suggested Nvidia could eventually generate $1 trillion in annual revenue by fiscal year 2029.

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 $321.59, indicating a potential upside of 47.8%. Also, Raymond James' Street-high target price of $515 suggests that the stock could rally as much as 136.7%.