Semiconductor industry leader NVIDIA Corporation (NVDA) has struck a multi-year, multi-generational partnership with social media behemoth Meta Platforms (META), expanding the deployment of NVDA CPUs in Meta’s data center production applications. Meta is also expected to scale its artificial intelligence (AI) workloads with NVDA’s Spectrum-X Ethernet and adopt the company’s Confidential Computing for WhatsApp private processing.

Given the partnership announcement between two tech-industry heavyweights, Needham analysts have reiterated their bullish stance on the chipmaker. Needham analyst N. Quinn Bolton gave a “Buy” rating and a $240 price target, implying a 27.7% upside from current levels. Bolton also wrote in a note to clients that the collaboration would be a “positive catalyst” for NVDA into 2026. The analyst asserts that the company remains the “primary beneficiary” of the AI hyperscaler spending spree.

If Palantir is Near a Bottom, What's the Best Play in PLTR Stock?

NVDA Earnings, Tariffs and Other Key Things to Watch this Week

Adobe (ADBE) Stock Has Been Beaten Up But the Smart Money Remains Resilient

Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now!

We look into the chipmaking giant and a bit into Meta against this backdrop.

NVIDIA Corporation pioneered GPUs for gaming and graphics and has since evolved into a leader in AI and accelerated computing, with a current massive market capitalization of $4.61 trillion.

The company continues to experience explosive growth in its data center segments, driven by high demand for GPUs such as the Hopper and Blackwell platforms used for AI training and inference. Cloud providers and enterprises continue to invest heavily in AI infrastructure, outpacing supply.

The company’s stock is up about 36% over the past 52 weeks, while it has increased 1.78% year-to-date (YTD). It had reached a 52-week high of $212.19 in October 2025, but is down 11.8% from that level.

On a forward-adjusted basis, NVDA’s stock is trading at a price-to-earnings ratio of 40.47x, higher than the industry average of 22.65x.

Let’s talk a little bit about Meta before we get into NVDA’s fundamentals. It’s ironic that the reason investors prefer NVDA is the same reason they're concerned about Meta, i.e., AI. Basically, Meta’s rising AI spending is concerning to its investors. The social media giant expects its expenditures to nearly double this year, compared to 2025, raising doubts about its margin expansion. Over the past 52 weeks, Meta’s stock has declined by 5.64%, while it is down by 0.67% YTD.

Big tech AI spending is growing to an unprecedented scale, with the big four hyperscalers (including Meta) expected to spend close to $700 billion combined this year. This increase in hyperscaler capex is expected to put pressure on their free cash flows.

Meta has also engaged in layoffs to keep its AI ambitions alive, mainly in its Reality Labs segment, which focuses on “metaverse” operations. However, the company’s core operations continue to grow.

In the fourth quarter of fiscal 2025, the daily active people (DAP) across Meta’s family of apps averaged 3.58 billion in December 2025, reflecting a 7% YOY increase, while revenue from its family of apps increased 25% YOY to $58.94 billion. Moreover, analysts remain optimistic about Meta Platforms’ prospects, expecting upside from the stock.

NVIDIA’s Q3 FY2026 revenue has increased 62% year-over-year (YOY) to $57.01 billion. This was led by the company’s data center revenue, which grew by 66% YOY to a record $51.20 billion. The company’s non-GAAP EPS climbed 60% annually to $1.30. For the fourth quarter of fiscal 2026, NVIDIA expects its revenue to be $65 billion, plus or minus 2%. The company’s CEO, Jensen Huang, commented that NVDA has entered into the “virtuous cycle of AI,” with the ecosystem scaling fast.

Wall Street analysts are robustly optimistic about NVIDIA’s future earnings. They expect the company’s EPS to climb by 70.6% YOY to $1.45 for Q4 FY2026 (to be reported on Feb. 25, after the market closes). For fiscal 2026, EPS is projected to surge 51.5% annually to $4.44, followed by 58.3% growth to $7.03 in fiscal 2027.

In addition to Needham analysts, Wall Street analysts have been bullish about NVDA’s stock. In January, analysts at Jefferies maintained a “Buy” rating on the stock and raised the price target from $250 to $275. Jefferies analyst Blayne Curtis sees upside from the company’s introduction of Accelerator builds and the models that accompany them.

Analysts at RBC Capital reiterated their bullish “Outperform” rating on NVDA and maintained a $240 price target. RBC Capital analysts remain confident in the company’s gross margin outlook amid higher memory costs, as HBM pricing for 2026 has already been secured. They highlight Blackwell-driven frontier model debuts and GTC as key catalysts, with supply-chain talks signaling robust Rubin growth to sustain momentum through 2027.

NVIDIA has been in the spotlight on Wall Street for some time now, with analysts awarding it a consensus “Strong Buy” rating overall. Of the 50 analysts rating the stock, a majority of 44 analysts have rated it a “Strong Buy,” three analysts suggest a “Moderate Buy,” two analysts are playing it safe with a “Hold” rating, and only one analyst gave a “Strong Sell” rating. The consensus price target of $255.55 represents 34.6% upside from current levels. Moreover, the Street-high price target of $352 indicates an 85% upside.

On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com