peony
Equity Investor & Researcher
Nvidia's Hugging Face acquisition is underappreciated by a market that treats it as marginal insurance. Big players are likely soon to move beyond using open models to cut costs and start investing in their development, to keep those models at the frontier, partly because AI labs compete with their own customers. Nvidia looks well ahead of the curve in understanding this dynamic. x.comÂ
NVIDIA's free-model plan could defend chip demand as the two largest AI labs cut reliance on its hardware. OpenAI is building a chip with Broadcom; Anthropic mostly uses Google and Amazon chips. NVIDIA is putting together Reflection AI (in talks), Hugging Face and Groq for free models and paid chips. At 11x expected 2029 earnings versus ~19x for Microsoft, Alphabet and Amazon and 32x for Apple, its price reflects fears of slower AI spending and lost customers. NVIDIA is a 'Maximum Opportunity'. … Show more
Nvidia's push into open-weight AI should make compute demand explode by making AI far cheaper. In one week it announced a $13B acquisition of Hugging Face and a $6B licensing deal with Poolside to build frontier open-weight models. Open-weight models cost less than OpenAI's and Anthropic's closed models and can be tuned into specialized models that beat frontier ones on specific tasks at a fraction of the token cost. Cheaper AI means more usage, more tokens and more compute. x.comÂ
Antitrust scrutiny of Nvidia's Hugging Face deal puts the duration of its AI-stack valuation at risk. Per Reuters, the DOJ is probing the roughly $13 billion deal. The near-term tests are whether it faces an unwind, conditions or delay, and how labs price dependence if model hubs concentrate under the same chip vendor. x.comÂ
Nvidia gets paid for AI infrastructure while the companies funding AI buildouts bear the spending. Alongside Apple's edge hardware business, Nvidia's position as a supplier distinguishes it from the AI spenders that are losing to companies collecting the cash. x.comÂ
Nvidia's CUDA retains developers, putting it among 12 stocks that could dominate the decade ahead. Nebius's GPU rental price rise signals demand; Fabrinet and Credo supply AI connectivity. DraftKings has betting scale; Microsoft has Azure and an OpenAI partnership; Figma anchors design work; Shopify powers stores. TeraWulf pivots power sites to AI leases; Constellation, the largest US nuclear operator, signs big-tech power deals; Meta spends on AI; Uber has autonomous-vehicle partnerships. x.com … Show more
Low Anthropic spending relative to customer expenses points to an enterprise AI adoption gap that leaves Nvidia reliant on intermediaries able to build their own chips. Anthropic's S-1 says over half the Fortune 500 were $100k+ annual customers as of September, yet spending among its publicly traded customers averaged under 0.1% of expenses in Q3 2026. That measures one provider and cannot show whether AI deployments succeed; Nvidia needs more enterprises buying its compute directly. x.comÂ
Anthropic's customer spending and compute buildout show AI monetizing at scale, a bullish read-through for Nvidia, Broadcom, Alphabet, Amazon, Microsoft, Nebius, CoreWeave and Hut 8. Its IPO filing reports H1 revenue up 14-fold to $16.3B, 11,900+ customers spending $100K+ annually and 1,900+ spending $1M+, alongside $9B in H1 infrastructure spending and about $430B in future compute commitments. x.comÂ
Nvidia's cash could have more value invested in AI companies with strong demand but too little capital to scale, especially neoclouds that can execute. Their valuations look very attractive now, making equity stakes preferable to more buybacks or dividends despite criticism of circular deals. SpaceX may need the money less because it is already very big. x.com x.com x.comÂ
Nvidia faces risks on both sides of the AI cycle. Vendor financing is a concern at the center of the buildout: strong AI sentiment brings competition, while weaker sentiment brings a slowdown. That makes it the largest holding of greatest concern. x.comÂ
The broad AI trade is among the most undervalued markets in years on a growth-adjusted basis because demand for intelligence keeps rising. Usage of open-weight and closed frontier models keeps climbing, while GPU rental prices are up around 80% this year despite exploding supply. Nvidia, AMD and SpaceX share this demand bet as long as both lines keep rising. x.comÂ
