Nvidia’s (NVDA) multi-year deal with Meta Platforms (META) – announced on Tuesday—is being considered a “positive catalyst” for the chip giant and could get the stock moving higher, Needham said.
“While specifics of the deal are still unknown (value, power, etc.), we view this announcement as another positive catalyst for NVDA into 2026 and beyond, reaffirming that hyperscaler propensity to spend on AI infrastructure remains strong and NVIDIA will be a primary beneficiary,” Needham analyst N. Quinn Bolton wrote in a note to clients. Bolton has a Buy rating and $240 price target on Nvidia shares.
Delving deeper, Bolton said Nvidia is likely to remain the biggest growth engine of the data center market, given the explosion in hyperscaler spending needs. “We expect the competitive dynamics in the data center market can exert pressure on the company’s long- term positioning; however, we believe several industries will transition to AI-based systems faster than before,” Bolton added.
As part of the deal, Meta said it will increase its usage of Nvidia’s Grace CPUs in its data centers. The collaboration represents the first large-scale NVIDIA Grace-only deployment, Nvidia added. The two tech giants are also working on the eventual deployment of Nvidia’s upcoming Vera CPUs, which may be deployed at scale next year.
Meta will use Nvidia’s GB300 systems in its data centers and use Nvidia’s cloud partner deployments to simplify its operations.
The Facebook parent also will use more of Nvidia’s Spectrum-X Ethernet to boost network efficiency and throughput. Lastly, Meta has adopted Nvidia’s Confidential Computing for WhatsApp, which allows for increased AI capabilities while protecting user privacy at the same time.