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NVIDIA's Hugging Face Buyout: Can It Further Strengthen AI Dominance?
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Key Takeaways
NVIDIA's $12.93B Hugging Face deal could expand its reach beyond chips into the open-model ecosystem.
Hugging Face brings 18M users, 3M models, 500,000 datasets and 1M applications to NVIDIA.
NVIDIA could pair its AI infrastructure with Hugging Face's developer community, models and data.
NVIDIA Corporation’s (NVDA - Free Report) proposed $12.93 billion acquisition of Hugging Face could strengthen its AI leadership by expanding its reach beyond chips and into the open-model ecosystem. The deal would give NVIDIA access to a platform used by more than 18 million developers, researchers and creators. Hugging Face hosts more than 3 million models, 500,000 datasets and 1 million applications, while 200,000 companies use its platform.
The acquisition is strategically sound. NVIDIA already contributes heavily to Hugging Face, with more than 500 models and 250 open datasets on the platform. By bringing Hugging Face into its business, NVIDIA can combine its AI infrastructure with a developer community and a library of models and data.
This could support NVIDIA’s growth as AI adoption spreads from cloud providers to enterprises, startups and institutions. Open models can increase demand for computing as developers customize, train, test and deploy AI applications. NVIDIA has assured that, post-acquisition, Hugging Face will remain open and continue supporting multiple models, clouds and AI accelerators.
The acquisition comes at a time when NVIDIA’s AI business is already booming. In the second quarter of fiscal 2027, revenues jumped 106% year over year to $96.22 billion, while Data Center revenues surged 117% to $89.02 billion. Non-GAAP gross margin expanded 250 basis points year over year to 75%.
The $12.93 billion acquisition amount is substantial, but the deal could give NVIDIA a stronger software and developer ecosystem around its hardware. If Hugging Face expands AI adoption and increases compute usage, the acquisition could strengthen NVIDIA’s strong AI moat.
AMD and Intel Challenge NVIDIA’s AI Ecosystem Lead
Advanced Micro Devices, Inc. (AMD - Free Report) and Intel Corporation (INTC - Free Report) are strengthening their AI offerings, making them key competitors as NVIDIA expands beyond GPUs (graphics processing units) with its Hugging Face acquisition.
Advanced Micro Devices is broadening its data center AI opportunity from Instinct accelerators to the Helios rack-scale platform. In the second quarter of 2026, AMD’s Data Center revenues rose 107% year over year to $6.7 billion, while Instinct sales more than doubled. Helios is in production, with initial shipments expected late in the third quarter and a larger ramp-up in the fourth quarter and 2027.
The Helios platform has already garnered multiple large deals from big tech companies. Anthropic plans to deploy up to 2 gigawatts of MI450-series GPUs using the AMD Helios rack-scale platform, with the first gigawatt beginning in the first half of 2027. Microsoft plans to deploy Helios at scale on Azure. Advanced Micro Devices expects Data Center segment revenues to more than double year over year in 2027.
Intel is also gaining momentum in data center AI. Its second-quarter revenues rose 25% to $16.13 billion, while Data Center and AI revenues surged 59% to $6.26 billion. Intel also launched Xeon 6+ and expanded its open-source OpenVINO Physical AI framework, giving developers tools for AI and robotics applications.
Intel is building a broader AI infrastructure platform spanning CPUs, ASICs, graphics, networking and advanced packaging as customers design workload-specific systems. In the second quarter of 2026, purpose-built silicon revenues increased about 20% sequentially and nearly tripled year over year. During the last earnings call, management noted that purpose-built silicon revenues are approaching an estimated $2 billion run rate, and the company is targeting $4 billion in the near future.
Still, NVIDIA has a broader advantage through its GPUs, software stack and developer ecosystem. Hugging Face could further strengthen that position by connecting NVIDIA’s computing platform with millions of AI developers and open models. This could make NVIDIA’s ecosystem harder for AMD and Intel to match.
NVIDIA’s Price Performance, Valuation and Estimates
Shares of NVIDIA have risen around 23.5% year to date, outperforming the Zacks Computer and Technology sector’s gain of 17.9%.
NVIDIA YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 18.07, below the sector’s average of 20.80.
NVIDIA Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 93.3% and 64%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
NVIDIA's Hugging Face Buyout: Can It Further Strengthen AI Dominance?
Key Takeaways
NVIDIA Corporation’s (NVDA - Free Report) proposed $12.93 billion acquisition of Hugging Face could strengthen its AI leadership by expanding its reach beyond chips and into the open-model ecosystem. The deal would give NVIDIA access to a platform used by more than 18 million developers, researchers and creators. Hugging Face hosts more than 3 million models, 500,000 datasets and 1 million applications, while 200,000 companies use its platform.
The acquisition is strategically sound. NVIDIA already contributes heavily to Hugging Face, with more than 500 models and 250 open datasets on the platform. By bringing Hugging Face into its business, NVIDIA can combine its AI infrastructure with a developer community and a library of models and data.
This could support NVIDIA’s growth as AI adoption spreads from cloud providers to enterprises, startups and institutions. Open models can increase demand for computing as developers customize, train, test and deploy AI applications. NVIDIA has assured that, post-acquisition, Hugging Face will remain open and continue supporting multiple models, clouds and AI accelerators.
The acquisition comes at a time when NVIDIA’s AI business is already booming. In the second quarter of fiscal 2027, revenues jumped 106% year over year to $96.22 billion, while Data Center revenues surged 117% to $89.02 billion. Non-GAAP gross margin expanded 250 basis points year over year to 75%.
The $12.93 billion acquisition amount is substantial, but the deal could give NVIDIA a stronger software and developer ecosystem around its hardware. If Hugging Face expands AI adoption and increases compute usage, the acquisition could strengthen NVIDIA’s strong AI moat.
AMD and Intel Challenge NVIDIA’s AI Ecosystem Lead
Advanced Micro Devices, Inc. (AMD - Free Report) and Intel Corporation (INTC - Free Report) are strengthening their AI offerings, making them key competitors as NVIDIA expands beyond GPUs (graphics processing units) with its Hugging Face acquisition.
Advanced Micro Devices is broadening its data center AI opportunity from Instinct accelerators to the Helios rack-scale platform. In the second quarter of 2026, AMD’s Data Center revenues rose 107% year over year to $6.7 billion, while Instinct sales more than doubled. Helios is in production, with initial shipments expected late in the third quarter and a larger ramp-up in the fourth quarter and 2027.
The Helios platform has already garnered multiple large deals from big tech companies. Anthropic plans to deploy up to 2 gigawatts of MI450-series GPUs using the AMD Helios rack-scale platform, with the first gigawatt beginning in the first half of 2027. Microsoft plans to deploy Helios at scale on Azure. Advanced Micro Devices expects Data Center segment revenues to more than double year over year in 2027.
Intel is also gaining momentum in data center AI. Its second-quarter revenues rose 25% to $16.13 billion, while Data Center and AI revenues surged 59% to $6.26 billion. Intel also launched Xeon 6+ and expanded its open-source OpenVINO Physical AI framework, giving developers tools for AI and robotics applications.
Intel is building a broader AI infrastructure platform spanning CPUs, ASICs, graphics, networking and advanced packaging as customers design workload-specific systems. In the second quarter of 2026, purpose-built silicon revenues increased about 20% sequentially and nearly tripled year over year. During the last earnings call, management noted that purpose-built silicon revenues are approaching an estimated $2 billion run rate, and the company is targeting $4 billion in the near future.
Still, NVIDIA has a broader advantage through its GPUs, software stack and developer ecosystem. Hugging Face could further strengthen that position by connecting NVIDIA’s computing platform with millions of AI developers and open models. This could make NVIDIA’s ecosystem harder for AMD and Intel to match.
NVIDIA’s Price Performance, Valuation and Estimates
Shares of NVIDIA have risen around 23.5% year to date, outperforming the Zacks Computer and Technology sector’s gain of 17.9%.
NVIDIA YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 18.07, below the sector’s average of 20.80.
NVIDIA Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 93.3% and 64%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over the past 30 days.
Image Source: Zacks Investment Research
NVIDIA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.