Nvidia Stock Dips on AMD-Meta Deal, But Wall Street Still Bullish Ahead of Earnings

 

# Nvidia Stock Dips on AMD-Meta Deal, But Wall Street Still Bullish Ahead of Earnings

**Published: February 25, 2026**

You know that feeling when you're the star of the show, and suddenly someone else gets a big round of applause?

That's kind of what happened to Nvidia this week.

The chip giant's stock took a small hit—down about 1%—after rival AMD announced a blockbuster deal with Meta worth up to $60 billion over five years . Investors got a little nervous. Competition is heating up. Maybe Nvidia's iron grip on the AI chip market isn't quite as tight as we thought.

But here's the thing: Wall Street isn't panicking. Not even close.

With Nvidia set to report earnings after the close today, analysts are raising price targets, talking about $2 billion upside surprises, and predicting the stock could hit $275 or even $352 . The bulls are still in charge.

So what's really going on? Is the AMD deal a real threat, or just noise? And what should investors expect when Nvidia drops its numbers later today?

Let me walk you through it all in plain English.

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## The Short Version

**What happened:** AMD announced a deal to sell up to $60 billion worth of AI chips to Meta over five years . The deal includes warrants that could give Meta up to 10% of AMD's stock .

**How Nvidia reacted:** Stock dipped about 1%, part of a broader tech pullback .

**Why it matters:** Meta is one of Nvidia's biggest customers. If they're buying more from AMD, does that mean less for Nvidia? That's the question investors are wrestling with.

**The bigger picture:** Nvidia reports earnings today. Analysts expect a monster quarter—$65.6 billion in revenue, up from $39.3 billion a year ago . And they're still bullish, with price targets as high as $352 .

**The bottom line:** One deal doesn't change Nvidia's dominance. But it's a reminder that competition is real, and customers want options.

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## The AMD-Meta Deal: What You Need to Know

Let's start with the news that moved markets.

On Tuesday, AMD announced a massive expansion of its partnership with Meta. The deal runs for five years and covers up to $60 billion worth of AI chips . That's not pocket change.

**Table 1: The AMD-Meta Deal at a Glance**

| **Metric** | **Details** |

| :--- | :--- |

| Total value | Up to $60 billion over 5 years |

| Compute capacity | 6 gigawatts worth of chips |

| First delivery | 1 gigawatt of MI450 chips in H2 2026 |

| Stock warrants | Meta can buy up to 160M AMD shares at $0.01 |

| Potential ownership | Up to 10% of AMD if all milestones hit |

| Custom chips | AMD will design specialized CPUs for Meta |

**Why the warrants matter:** This is the really interesting part. AMD is essentially giving Meta a huge incentive to make this deal work. The stock warrants are tied to performance milestones—both in terms of chip deliveries and AMD's stock price hitting targets up to $600 .

If everything goes perfectly, Meta could end up owning about 10% of AMD . That's not just a customer relationship. That's a partnership.

**Matt Britzman**, an analyst at Hargreaves Lansdown, put it this way: "Meta is locking in supply, diversifying away from a single vendor, and doing whatever it takes to make sure its AI ambitions aren't bottlenecked by chips" .

For AMD, he said, "this is a vote of confidence in its next-generation AI hardware—but having to give up a 10% stake suggests it could be struggling to generate organic demand" .

**Lisa Su**, AMD's CEO, was more optimistic: "Meta is making a big bet on AMD" . She noted that the chips are optimized for "inference"—the process of running AI models after they're trained, which is expected to be an even bigger market than training .

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## The Nvidia Reaction: Why the Dip?

So if AMD's deal is so great for them, why did Nvidia's stock dip?

A few reasons.

**First, investors worry about share loss.** Meta is one of Nvidia's biggest customers. If they're spending billions with AMD, maybe they're spending less with Nvidia. That's a legitimate concern, even if it's not the full story.

**Second, it's a reminder that competition exists.** Nvidia has dominated the AI chip market, but AMD is clearly gaining traction. They signed a similar deal with OpenAI last year . Now Meta. That's two of the biggest names in AI choosing AMD for at least part of their needs.

**Third, the market is on edge.** Nvidia reports earnings today. Any negative news—even a 1% dip—gets amplified when everyone's waiting for the big number.

But here's the important context: **Nvidia's stock is still up 41% over the past year** . It's trading around $191, down from its October peak of $212, but still way above where it was . One deal with AMD doesn't change that trajectory.

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## What the Analysts Are Saying

This is where it gets interesting. Despite the AMD news, Wall Street is overwhelmingly bullish on Nvidia heading into earnings.

**Table 2: Analyst Price Targets for Nvidia**

| **Firm** | **Analyst** | **Rating** | **Price Target** |

| :--- | :--- | :--- | :--- |

| Morgan Stanley | Joseph Moore | Overweight | $250 |

| Bank of America | Vivek Arya | Buy | $275 |

| KeyBanc | John Vinh | Overweight | $275 |

| DA Davidson | Gil Luria | Buy | $250 |

| Wedbush | Matt Bryson | Outperform | $230 |

| Street consensus | 39 analysts | Strong Buy | $255.82 |

**Morgan Stanley's Joseph Moore** is particularly bullish. He expects strong Q4 results and has "very high confidence" that Nvidia will perform well for the full year . He's projecting at least $2 billion in upside to the company's $64 billion guidance, saying a consensus revenue estimate of $72 billion "feels safe" .

Moore's target of $250 is based on 26 times his 2027 EPS estimate of $9.57 . He thinks Nvidia should trade at a premium to Broadcom given its "higher probability of upward revisions in the near term" .

**Bank of America's Vivek Arya** is even more optimistic at $275, based on 28 times his 2027 P/E estimate . He recently raised his sales and EPS estimates for Nvidia.

**KeyBanc's John Vinh** sees strong results driven by Blackwell shipments and H200 sales to China, which he estimates could contribute $3 billion to $3.5 billion in revenue this quarter .

**The Street consensus** from 39 analysts is a "Strong Buy" with an average price target of $255.82—about 33% upside from current levels .

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## What to Watch in Nvidia's Earnings

Nvidia reports after the market close today. Here's what everyone will be watching.

### 1. The headline numbers

Analysts expect $65.6 billion in revenue and $1.52 in EPS . That's up from $39.3 billion and $0.89 a year ago .

The company's own guidance called for $63.7 billion to $66.3 billion , so they're already projecting massive growth.

### 2. Guidance

As always with Nvidia, the future matters more than the past. The company has a history of "beat and raise"—crushing expectations and then lifting guidance even higher .

**Investing.com** notes that "meeting" expectations probably won't be enough . The "whisper number" is higher than the official estimates, and investors want to see that demand is still accelerating.

### 3. The Blackwell ramp

Nvidia's next-gen Blackwell chips are critical. Analysts want to hear that production is on track and demand is strong. KeyBanc's Vinh expects "increasing shipments of Blackwell Ultra to be a key driver of strong results and guidance" .

### 4. Data center diversity

The market will focus on whether data center growth is broad-based or concentrated in a few hyperscalers. If Nvidia can show demand from enterprise, sovereign AI, and other sources beyond the big tech companies, that's a huge positive .

### 5. Gross margins

Nvidia's margins are already incredible—over 70% . But any hint of pressure, whether from competition or product mix, could spook investors. The question is whether margin pressure is "transitory" (temporary as new products ramp) or "structural" (a new normal) .

### 6. China exposure

There's an interesting twist here: US export policy has quietly changed. Nvidia's H200 shipments to China are no longer under automatic denial, but subject to case-by-case review . KeyBanc estimates this could represent $3 billion to $3.5 billion in revenue this quarter .

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## The Competition Question: How Real Is the Threat?

Let's address the elephant in the room. Is AMD actually a threat to Nvidia?

**The short answer:** Yes, but not an existential one.

**Nvidia's moat is real.** They dominate AI training through their CUDA software platform, where most foundational AI code has been written and optimized for their GPUs . That's not something AMD can replicate overnight.

**But inference is different.** Running AI models after they're trained is a different kind of computing, and Nvidia's moat is narrower there . AMD's MI450 chips are specifically optimized for inference, and Meta helped design them .

**The inference market could be huge.** Industry analysts expect the market for inference hardware to dwarf the size of the market for training equipment . If AMD can carve out a meaningful share of that, it's real money.

**Broadcom is also in the mix.** Some analysts think Broadcom could be the biggest winner in inference, thanks to its custom ASIC chips for companies like Google and OpenAI . The Nasdaq article we looked at predicted Broadcom would be the "new AI inference king" by year-end .

**The bottom line:** Nvidia will remain dominant, but it won't have 90% market share forever. That's normal. That's healthy. And it doesn't mean Nvidia can't be a great investment.

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## The Technical Picture: What the Charts Say

For the chart watchers out there, here's where Nvidia stands technically.

The stock has been trading in a range between about $170 and $195 for over six months . There was a brief move above $200 in early November, but it didn't hold .

**Bulls say:** This consolidation has allowed the stock to digest its massive run-up without a sharp correction. It's "correcting through time rather than price," which is healthy.

**Bears say:** This is a topping pattern, and the stock could break down if earnings disappoint.

Options pricing suggests traders expect about a 5.5% move in either direction after earnings . That's down from the 10% moves we saw last year, but still significant for a $4.7 trillion company .

**Key levels to watch:**

- **Resistance:** $195-$200 (the top of the range)

- **Support:** $170-$175 (the bottom of the range)

- **Breakout level:** Above $210 would signal new highs

- **Breakdown level:** Below $170 would suggest deeper pullback to the mid-$100s

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## What This Means for You

### If You're an Investor

Today's earnings are a big deal. Nvidia is the poster child for AI, and how it performs sets the tone for the whole sector.

If they deliver a strong beat and raise guidance, the stock could break out of its range and challenge all-time highs. If they disappoint, expect volatility.

But here's the important thing: even with competition heating up, Nvidia is still the dominant player in the most important technology of our time. One AMD deal doesn't change that.

### If You're Thinking About Buying

The stock is down from its highs and trading in a range. That's not necessarily a bad entry point, but earnings could provide clearer direction.

Some analysts think the stock is "discounting a 2026 peak in AI demand" , meaning the market may already be pricing in a slowdown. If that's wrong, there could be upside.

### If You're Just Curious

This is a fascinating moment in tech. We're watching the biggest infrastructure buildout in history—$650 billion in AI spending this year alone from the big cloud companies . And at the center of it all is Nvidia.

Whether you own the stock or not, what happens today matters. It's a signal for the whole AI trade.

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## Frequently Asked Questions

**Q: Why did Nvidia stock fall after the AMD-Meta deal?**

A: The stock dipped about 1% on concerns that Meta might shift some spending away from Nvidia. Investors worry about competition, even if the actual impact is small .

**Q: How big is the AMD-Meta deal?**

A: Up to $60 billion over five years, covering 6 gigawatts of compute capacity. Meta also gets warrants that could give them up to 10% of AMD's stock .

**Q: Is this a real threat to Nvidia?**

A: It's a reminder that competition exists, but Nvidia's dominance isn't going away overnight. AMD is gaining traction in inference chips, but Nvidia still dominates training and has a massive software moat .

**Q: When does Nvidia report earnings?**

A: Today, February 25, after market close .

**Q: What are analysts expecting?**

A: Revenue of $65.6 billion, EPS of $1.52 . Guidance is also critical—investors want to see that demand is still accelerating .

**Q: What's the stock price target for Nvidia?**

A: The consensus from 39 analysts is $255.82, about 33% upside from current levels . Individual targets range from $230 to $352 .

**Q: What's the difference between training and inference?**

A: Training is building the AI model—teaching it to recognize patterns. Inference is running the model—answering queries, generating content. Inference is expected to be a much bigger market long-term .

**Q: Who else competes with Nvidia?**

A: AMD is the main GPU competitor. Broadcom is big in custom ASIC chips for companies like Google. And some hyperscalers are developing their own chips .

**Q: Should I buy Nvidia stock before earnings?**

A: That's a personal decision. The stock could move 5-6% either way after earnings. If you're long-term bullish, dollar-cost averaging might make more sense than trying to time the announcement.

**Q: What happens if Nvidia misses?**

A: Expect a sharp selloff, and probably a pullback in the whole AI sector. But given Nvidia's track record of beating expectations, a miss seems unlikely .

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## The Bottom Line

Here's what I keep coming back to.

The AMD-Meta deal is real. It's big. It shows that Nvidia's customers want options and are willing to invest billions to create them.

But Nvidia is still the king. They're reporting another monster quarter today. Their margins are insane. Their technology is years ahead. And their customers are spending hundreds of billions on AI infrastructure—most of it on Nvidia chips.

**Morgan Stanley's Joseph Moore** put it well: he has "very high confidence" that Nvidia will perform well, and he sees $2 billion in potential upside to guidance .

**DA Davidson's Gil Luria** offered a contrarian take that's actually bullish: "The market has picked other AI winners... While these other companies' expectations are discounting a multi-year AI cycle, we believe that NVDA's share price is discounting a 2026 peak in AI demand" .

In other words: everyone's excited about other AI plays, but Nvidia might actually be the bargain because expectations are lower.

Whether you agree with that or not, one thing is clear: Nvidia is still the most important company in the most important technology on earth. And today's earnings will tell us a lot about where we go from here.

Buckle up.

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*Got thoughts on Nvidia earnings? Think AMD is a real threat? Drop a comment and let me know.*