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 CoursesRecent news
IBM Shares Fall as CEO Doubles Down on Quantum While Market Stays Skeptical
At New York Tech Week on Tuesday, IBM’s CEO made his strongest argument so far that quantum computing is real, ready for business, and closer than most people think. Even as Arvind Krishna called quantum the next step after CPUs and GPUs and promised a $10 billion investment over five years, IBM shares dropped along […]
SpaceX IPO: Musk Pitches $3.4T Revenue Vision to JPMorgan Investors
Elon Musk spoke at a JPMorgan investor event on Thursday to promote SpaceX before its highly anticipated IPO. He left the detailed numbers to the bankers and instead shared his vision of a company that could change global computing, transportation, and even human civilization. Morgan Stanley estimates that SpaceX’s revenue could reach $3.4 trillion by […]
NVIDIA Shares Slip 1.4% as Real Computex Catalyst Goes Unnoticed
NVIDIA made headlines at Computex with its biggest announcement, but that might not be the most important news for investors. Shares dropped 1.4% in premarket trading on Friday, wiping out earlier gains from the week after the RTX Spark PC chip was revealed. Investors are waiting to see if consumers will pay higher prices for […]
Trade with fewer limits
Day trade with fewer limits at fast speed. Buy stocks and ETFs at low fees.