Why Is NVDA Stock Up In Premarket Today?

Nvidia secured new commitments from Meta for its chips and data center equipment.

• Nvidia shares rally for a second session.
• Meta will pay tens of billions of dollars for new Nvidia hardware under the expanded agreement announced on Tuesday.
• Nvidia disclosed a nearly $8 billion stake in Intel, sending the fellow chipmaker's shares higher in Wednesday’s premarket session.

Nvidia Corp. shares rose 1.4% in early premarket trading on Wednesday, continuing its ascend from the prior day.

Meta Expands Commitment 

The rally appears to be driven by an expanded partnership with Meta Platforms, Inc. The two sides announced Tuesday a new deal under which the social media giant will purchase tens of billions of dollars’ worth of Nvidia chips and other hardware for its artificial-intelligence needs.

Meta, which has been an Nvidia customer for a decade, plans to use millions of Blackwell, as well as the newly-announced Rubin and Vera CPUs to build out its data centers.

Nvidia Discloses Portfolio Shake-Up

Nvidia released an update on its investment. The company disclosed new stakes worth $2.3 billion in Snap and worth $1.1 billion in Nokia. 

Fellow chipmaker Intel’s stock also rose 1% as Nvidia disclosed a $7.9 billion stake. In September, Nvidia said it would acquire $5 billion worth of Intel stock as part of a co-chip development deal. 

Nvidia sold off its stakes in Applied Digital, Arm Holdings, Recursion Pharmaceuticals, WeRide. Applied Digital shares were down 6.6% in the premarket session.

Another Investor Turns Bearish

Meanwhile, New York-based hedge fund Stanphyl Capital disclosed that it had taken a short position on NVDA stock, echoing the contrarian position of “The Big Short” investor Michael Burry from last November.

“It's inevitable that some of the "hyperscalers" will announce reduced capex and when they do $NVDA @23x revenue will crash through the floorboards,” Stanphyl Capital said in an X post on Tuesday.

It said it increased its short bet around $186, with an average short price near $189, and stop-loss in the mid-$190s.

Nvidia shares are down 0.8% year to date, as of the last close.

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