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.
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.
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.
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