Wells Fargo Maintains Overweight on NVIDIA, $265 Price Target

Wells Fargo analyst Aaron Rakers reiterated an Overweight rating and $265 price target on NVIDIA (NASDAQ: NVDA).

“What’s New?

Despite various reports that NVDA was spending as much as $20B+ to acquire privately-held Groq, Groq cleared the confusion by officially announcing that it had entered into a non-exclusive licensing agreement with NVIDIA (see here).

More notably, this agreement could be considered an acqui-hire in that Groq’s Founder, Jonathan Ross + President & COO, Sunny Madra, along with other Groq employees will join NVDA to focus on driving global scale high-performance, low cost AI inferencing.

Our Initial Thought / Questions. We think this is a very interesting strategic move by NVDA from which we believe investors will be focused on: 1.

This appears very succinctly focused on the proliferation of low-cost latency-sensitive + deterministic AI inference; providing NVDA w/ access to Groq’s novel hardware architecture + software (compiler) capabilities.

2. What does this mean in terms of NVDA’s views on HBM given Groq’s LPUs using only on-chip SRAM (10x performance vs. HBM).

We would note NVDA’s $900M acqui-hire of Enfabrica, a move we see as clearly focused on the evolving memory architecture / optimization. 3.

Does integrating NVDA’s NVLink C2C interconnect capabilities with Groq architecture provide NVDA w/ a more inference- optimized architecture / portfolio? 4.

How should we think about Groq relative to NVDA’s Rubin CPX intro’d in early Sept w/ a focus on large context inference optimization – available late-26; utilizing 128GB GDDR7 memory.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.