TLDR
- Anthropic signed a $35 billion cloud deal with Lambda, both backed by Nvidia, using an Nvidia-leased data center filled with Nvidia hardware
- Nvidia executives reject the “circular financing” label but offer little transparency on financial terms
- NVDA stock opened at $220.60 and was down 1.1% in premarket trading Tuesday
- Nvidia recently posted Q2 revenue of $96.22 billion, up 105.9% year-over-year, beating estimates
- Institutional investors continue to pile in, with State Street, Geode Capital, and Norges Bank among recent buyers
Nvidia’s latest deal is raising eyebrows, and it’s easy to see why.
Anthropic has signed a $35 billion cloud-computing agreement with Lambda, a cloud provider backed by Nvidia. The data center behind the deal is leased by Nvidia itself, secured from infrastructure firm Hut 8. And of course, the hardware filling that data center? Nvidia’s own chips.
Nvidia is also an investor in Anthropic. So an Nvidia-backed AI company is buying cloud capacity from an Nvidia-backed provider, in an Nvidia-leased facility packed with Nvidia silicon.
The arrangement has sparked renewed debate around what critics call “circular financing.” Nvidia executives pushed back on that term during the company’s most recent earnings call, but the company has not provided clarity on the financial terms of the deal, including how much Lambda pays for the data center lease or whether it shares revenue from the Anthropic contract with Nvidia.
Nvidia did not respond to a request for comment ahead of Tuesday’s premarket session, where NVDA stock was down 1.1%, opening at $220.60.
Nvidia’s Web of AI Investments
This deal is far from a one-off. Nvidia has been building a sprawling investment portfolio across the AI ecosystem. Recent stakes or options include Corning, Marvell Technology, Lumentum, Coherent, CoreWeave, Nebius, Synopsys, Nokia, MediaTek, Intel, and SpaceX, plus dozens of smaller private company bets.
The strategy appears deliberate: lock in long-term demand for its processors while taking upside in the companies buying them. Nvidia also announced a $3.5 billion investment in MediaTek, expanding a partnership covering data-center, edge-computing, and automotive AI.
ARK Invest bought around $53 million of NVDA stock following a post-earnings dip, signaling continued confidence from at least one high-profile growth investor.
Analysts have been raising price targets. Needham lifted its target to $300 with a buy rating. Argus went to $270, also a buy. Goldman Sachs kept a neutral rating but raised its target to $300. The consensus sits at $324.23, with 50 of 55 tracked analysts holding a buy or strong buy rating.
Strong Earnings, But Watch the Margins
Nvidia’s most recent quarterly results were hard to argue with. The company posted $96.22 billion in revenue, up 105.9% year-over-year, and earnings per share of $2.22, beating the $2.09 estimate. Net margin came in at 63.66%, with return on equity at 96.04%.
The company also approved an $80 billion stock buyback program in May and declared a quarterly dividend of $0.25 per share, payable October 1 to shareholders of record September 10.
That said, supply chain pressures are building. Memory, networking, optical components, power, and copper are all facing bottlenecks. Higher input costs could weigh on gross margins even as demand stays well ahead of supply.
A paused internal program that would have allowed Nvidia to share in cloud profits from already-sold chips also drew attention, reportedly shelved over antitrust concerns.
Insiders have sold $299 million worth of stock over the last 90 days. The twelve-month trading range for NVDA sits between $164.07 and $236.54.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
