Nvidia Shares Rise 2.6% Amid Hugging Face Deal, Blowout Earnings As Analysts Stay Bullish Heading Into Fall

SANTA CLARA, Calif. — Shares of Nvidia Corp. climbed $5.91, or 2.59%, to $234.36 as of 9:55 a.m. ET Friday, extending a week of strong gains for the chipmaker following its confirmed acquisition of AI platform Hugging Face and continued momentum from a blowout quarterly earnings report last week.

Nvidia officially confirmed Thursday that it has agreed to acquire Hugging Face, one of the world's most widely used platforms for sharing and deploying open-source artificial intelligence models, in a deal valued at $12.93 billion. CEO Jensen Huang and Hugging Face CEO Clément Delangue joined CNBC's "Squawk Box" to discuss the transaction, emphasizing the strategic importance of keeping AI development open rather than centralized around a small number of proprietary providers.

Huang told CNBC that open models "matter greatly to our company," reinforcing comments he made in the deal's official announcement, in which he pledged that Hugging Face would remain a neutral platform available to developers regardless of which computing hardware or cloud provider they choose to use.

Patrick Moorhead, an industry analyst who covers the semiconductor sector, offered his own assessment of the strategic logic behind the acquisition in remarks to CNBC.

"It's about accelerating open source growth," Moorhead said of Nvidia's rationale for acquiring Hugging Face.

Rosenblatt analysts weighed in on the deal as well, framing it within the broader context of Nvidia's expanding role across the AI industry's financial ecosystem. According to Rosenblatt, Nvidia is increasingly using its balance sheet to help maintain the overall health of the broader AI ecosystem, extending its influence beyond simply selling computing hardware to actively investing in and acquiring key pieces of AI infrastructure and software.

Friday's gains build on Nvidia's continued momentum following its fiscal second-quarter earnings report released in late August, which significantly exceeded Wall Street's expectations. The company reported revenue of $96.2 billion, up 106% year over year, with its data center segment alone contributing $89 billion of that total. Non-GAAP earnings per share rose 120% to $2.22, comfortably beating analyst estimates of $2.09 on revenue of $92.3 billion. Diluted earnings per share on a GAAP basis soared 128% to $2.46.

For the current quarter, Nvidia guided for revenue of $108 billion, plus or minus 2%, implying year-over-year growth of roughly 89%, with non-GAAP gross margin expected to hold around 75%. Huang described the company's outlook in terms of continued supply constraints rather than any weakening in underlying demand.

"A supply-constrained outlook," Huang said of the company's near-term production capacity, adding that Nvidia expects "supply to remain a bottleneck at least through the end of fiscal year 28."

Supporting that assessment, industry data cited by analysts shows the cloud computing industry's backlog of orders now exceeds $2 trillion, with capital expenditures among the top five hyperscale cloud providers tracking toward nearly $800 billion in 2026 and an estimated $1.3 trillion in 2027. Nvidia's next-generation Vera Rubin computing platform is expected to generate approximately $40 billion in revenue per gigawatt of deployed capacity, a significant step up from the $25 billion figure associated with the company's current Blackwell architecture.

Wall Street analyst sentiment toward Nvidia has remained overwhelmingly positive following the earnings report and the Hugging Face deal. According to compiled analyst ratings, Nvidia currently holds 48 "buy" ratings and 10 "strong buy" ratings, with a consensus price target of $305.79, implying meaningful upside from current trading levels. The stock's forward price-to-earnings ratio of 24 remains below the average multiple of the broader Nasdaq-100 index, which some analysts argue makes the stock reasonably valued given its projected growth trajectory and 65.6% operating margins.

Despite the bullish near-term outlook, some risks remain on the horizon. Analysts have noted that Nvidia's third-quarter guidance does not include any revenue contribution from China data center compute sales, a market that has faced ongoing export restrictions and regulatory uncertainty. Gross margins are also expected to bottom out in the fourth quarter, in a range of 71% to 72%, as the company ramps up production of its newer Vera Rubin platform, a transition that historically introduces temporary cost pressures before yields improve.

Insider trading activity at Nvidia has also drawn some investor attention this week. Nvidia board member Mark Stevens filed a Form 144 notice with the U.S. Securities and Exchange Commission on Sept. 2, signaling intent to sell shares totaling approximately $1.5 billion, according to data compiled by financial trackers. Such filings are a routine disclosure requirement for insider stock sales and do not necessarily indicate any change in a company's underlying business outlook, though large insider sales are often closely watched by investors regardless of the specific circumstances.

Nvidia's stock has now climbed 901% over the trailing five years, according to Motley Fool analysis, transforming the company into a $5.4 trillion market capitalization giant and one of the most closely watched stocks in global markets. Sell-side analysts project the company's revenue will continue expanding at a roughly 58% annual rate between fiscal 2026 and fiscal 2029, supported by sustained pricing power tied to persistent supply constraints across the broader AI computing hardware market.

Some market commentators have flagged September's historically weak seasonal performance for equities broadly, noting that the S&P 500 and Nasdaq Composite have both typically posted negative average returns during the month. Despite that historical pattern, several analysts have argued that Nvidia's current fundamental momentum, bolstered by the Hugging Face acquisition and continued strong demand signals from hyperscale cloud customers, could allow the stock to buck the broader seasonal trend this year.

With Nvidia's next major earnings report not expected until November, investors are likely to continue focusing in the near term on integration details surrounding the Hugging Face acquisition, along with broader industry data points from other major semiconductor companies reporting quarterly results this month, including Broadcom, which reported its fiscal third-quarter results Sept. 2, and Micron Technology, which is scheduled to report on Sept. 30. Both companies' results are expected to offer additional insight into the broader health of the AI hardware supply chain heading into the final months of 2026.