Nvidia’s investment playbook is drawing scrutiny and pushing its stock higher at the same time. Shares climbed 1.2% in premarket trading Friday after the chipmaker announced an AI infrastructure partnership with IREN. Critics call the deal circular. Analysts call it smart.
The agreement puts five gigawatts of AI infrastructure across IREN’s data centers. Nvidia gets a five-year option to buy 30 million IREN shares at $70 each, worth up to $2.1 billion. IREN gets a five-year cloud services deal valued at roughly $3.4 billion in revenue.
The structure is not new for Nvidia. It has struck similar arrangements with Corning, Marvell Technology, Lumentum, Coherent, CoreWeave, Nebius, Synopsys, and Nokia. The pattern raises a fair question: is Nvidia financing its own demand?
J.P. Morgan’s U.S. equity strategist and head of Thematic Research does not think so. He argues the model reflects genuine market demand and mirrors supply chain financing that industrial companies have used for decades. The real goal, he says, is to spread Nvidia’s customer base and lock in demand for future GPU generations.
IREN started out as an Australian Bitcoin miner called Iris Energy. It has since pivoted to AI cloud infrastructure, building and running data centers powered by renewable energy. Its shares jumped 11% in premarket trading Friday, even though third-quarter revenue missed analyst expectations. The Nvidia deal was simply a bigger story.
Featured Courses
Recent news
OpenAI Weighs 5% U.S. Government Stake Ahead of Blockbuster IPO
OpenAI has held discussions about offering the U.S. government a 5% ownership stake, potentially structured through a sovereign wealth fund, according to a Financial Times report citing people familiar with the matter. The ChatGPT maker did not immediately respond to a request for comment. The move would add Washington to an already formidable roster of […]
Tesla Deliveries Loom as Investors Bet on Second Straight Quarterly Gain
Tesla is poised to report second-quarter delivery figures Thursday morning, capping a period marked by geopolitical conflict, a spike in oil prices, and continued fallout from shifting U.S. electric-vehicle policy. The automaker’s shares have rallied sharply ahead of the report, a signal that investors anticipate a strong outcome. Even so, forecasts vary widely enough that […]
Nvidia Stock Trails Chip Peers in First Half as Competition Broadens
Nvidia shares rose 0.4% to $195.75 in premarket trading on Tuesday, ending a first half that trailed the broader semiconductor sector. The stock is up 4.5% for the year through Monday, much less than the PHLX Semiconductor Index’s 94% gain over the same period. Here’s a look at why Nvidia has underperformed and what investors […]
Trade with fewer limits
Day trade with fewer limits at fast speed. Buy stocks and ETFs at low fees.