Nvidia is already in talks for its next AI deal after Groq

Nvidia (NASDAQ: NVDA) remains in focus today following reports that it’s already in advanced talks for another artificial intelligence (AI) deal, just days after its $20 billion agreement with Groq.

According to CTech, the semiconductor titan is now going after “AI21 Labs” – an Israeli startup – and is willing to spend as much as $3.0 billion for the acquisition.

The deal would mark NVDA’s fourth major acquisition in Israel and highlights its broader strategy of securing top AI talent worldwide.

At the time of writing, Nvidia stock is up roughly 100% versus its year-to-date low in early April.

What this deal means for Nvidia stock

The expected transaction (AI21 Labs) would be largely positive for NVDA shares, mostly because it stands to strengthen the giant’s artificial intelligence ecosystem.

AI21 Labs has a workforce of about 200 highly skilled employees, many with advanced academic backgrounds, representing a rare concentration of expertise in large-scale language models (LLMs).

For Nvidia, the agreement will likely resemble an acquihire – effectively expanding its talent base in Israel at a cost of $15 million tops per employee.

Such a move would accelerate innovation in enterprise-focused AI, where accuracy and reliability are paramount.

Investors may view this as a strategic hedge against intensifying competition from Google’s tensor processing units (TPUs), reinforcing NVDA’s leadership in AI workloads.

Is it worth owning NVDA shares heading into 2026?

Despite Nvidia shares’ meteoric rally this year, Mizuho’s senior analyst Vijay Rakesh believes they will push higher in 2026.

Critics have long argued that NVDA dominates the AI market for training only, not so much for inference. But the “Groq” deal effectively mutes such concerns, Rakesh said in a research note last week.

Plus, the giant’s expanding software ecosystem adds recurring revenue streams beyond hardware sales, which could drive its stock up to $245 next year, or up another 32% from here, he noted.

All in all, as AI adoption continues to accelerate globally, Nvidia’s positioning as the go-to supplier of advanced chips makes it a compelling investment heading into 2026, Rakesh concluded.

Nvidia’s valuation isn’t even that stretched

Valuation concerns have weighed on AI stocks’ sentiment in the final quarter of 2025, but to some, NVDA stock isn’t even trading at a particularly stretched multiple heading into the new year.

Stacy Rasgon – a senior Bernstein analyst – for example, argues Nvidia, at a forward P/E multiple in the low 20s, isn’t really expensive given the firm’s “amazing growth rate”.

Unlike some of the other high-flying AI stocks, the multinational’s earnings growth continues to outpace expectations, leaving room for further upside.

That’s partly why options traders also expect NVDA to push higher in 2026.

Contracts expiring in late March suggest potential upside of another 15%, which means the AI darling could be trading at about $214 within the next three months.

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