Why Is Nvidia Moving Higher in Premarket? New Multi-Year Meta AI Chip Deal

Nvidia (NVDA) shares are pushing higher in premarket trading on Wednesday after the semiconductor giant announced a sweeping multiyear partnership with Meta Platforms (META) to supply millions of its current and next-generation artificial intelligence chips. The deal, announced Tuesday after the market close, sent NVDA shares up 1.85% in premarket to $188.40 as of 5:25 AM EST, building on the stock’s 1.20% gain during the regular session when it closed at $184.97.

The agreement covers a broad range of Nvidia’s product lineup — from its current Blackwell GPUs to forthcoming Rubin AI chips — and notably extends into central processing units that put Nvidia in direct competition with Intel and Advanced Micro Devices. The announcement underscores Nvidia’s continued dominance in AI infrastructure even as hyperscalers like Meta pursue their own in-house chip development strategies.

The Meta Deal: What’s Included and Why It Matters

Nvidia announced the multiyear partnership with Meta on Tuesday, confirming it will supply millions of chips spanning multiple product generations. The deal includes Nvidia’s current Blackwell GPU systems as well as its forthcoming Rubin AI chips, while also covering standalone deployments of its Grace and Vera central processors, products based on Arm Holdings technology that compete directly with offerings from Intel and AMD.

Meta will also expand its use of Nvidia’s Spectrum-X Ethernet networking to improve efficiency and throughput across its data centers, and has adopted Nvidia’s Confidential Computing technology for WhatsApp to enable advanced AI capabilities while preserving user privacy.

The partnership represents the first large-scale deployment of Nvidia’s Grace-only CPU infrastructure, a significant milestone that signals the chipmaker’s growing ambitions beyond graphics and AI accelerators. Nvidia’s Grace processors have demonstrated the ability to handle tasks like database operations at roughly half the power consumption of competing solutions, with the next-generation Vera chips expected to extend those efficiency gains further.

Ian Buck, general manager of Nvidia’s hyperscale and high-performance computing unit, noted that Meta has already tested Vera for certain workloads, calling the early results very promising.

The strategic significance of the deal extends beyond its hardware scope. Meta is widely believed to be among a handful of customers that collectively accounted for 61% of Nvidia’s revenue in its most recent fiscal quarter, making the retention and expansion of this relationship a material business development.

The announcement is also seen as a signal that Nvidia has secured its position with Meta despite the social media giant simultaneously developing its own AI chips and exploring Google’s Tensor Processing Unit chips as potential alternatives.

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Nvidia Stock Performance and Valuation Overview

NVDA shares closed Tuesday’s regular session at $184.97, up $2.19 or 1.20%, before extending gains in after-hours and premarket trading to $188.40, a further rise of $3.43 or 1.85%, as of 5:25 AM EST on Wednesday. The stock has traded in a 52-week range of $86.62 to $212.19, and carries a market capitalization of approximately $4.503 trillion.

Year-to-date, the stock is down a modest 0.82%, though it has delivered a one-year return of 33.25%, significantly outpacing the S&P 500’s 11.92% gain over the same period. Nvidia’s next earnings report is scheduled for February 25, 2026, which analysts are watching closely as a broader indicator for AI-related market sentiment.

From a valuation standpoint, NVDA trades at a trailing price-to-earnings ratio of 45.90 and a forward P/E of 23.75, reflecting expectations of continued strong earnings growth. The company reported Q3 FY26 revenue of $57.01 billion with earnings of $31.77 billion, beating the consensus EPS estimate of $1.26 with an actual of $1.30.

Profit margins stand at an impressive 53.01%, with return on equity of 107.36% and levered free cash flow of $53.28 billion on a trailing twelve-month basis. The analyst consensus price target sits at $253.88, representing significant upside from current levels, with the high target reaching $352.00.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.