Artificial intelligence (AI) and graphical processing unit (GPU) leader Nvidia (NVDA) has finally completed its acquisition of AI startup Run.ai after months of regulatory concerns. With this $700 million acquisition complete, Nvidia further secures its position as the top dog in the AI services race.
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The combination of the two companies makes sense as Run.ai’s software currently only works on Nvidia GPUs. However, Run.ai has confirmed it intends to make its software open-source. Doing so would allow it to be used on more than just Nvidia’s GPUs. This may benefit the GPU maker as it could expand its AI services beyond its current customers.
Despite initial concerns from the European Commission, the watchdog did approve the deal, noting that it was unlikely to hurt competition in the markets where the two companies operate. A separate investigation by the U.S. Department of Justice also didn’t stop the purchase from going through.
What This Means for NVDA Stock
In the short term, NVDA shareholders are somewhat excited about today’s news. The stock has seen a 1.2% increase as of this writing. However, there isn’t much trading activity with only 28.57 million units changing hands, as compared to a three-month daily average of 231.47 million shares.
Even so, today’s news is more about Nvidia’s long-term AI plans. Run.ai’s focus is on optimizing the performance of AI networks, including data centers, the cloud, or hybrid environments. With its tech, Nvidia can strengthen its offerings while also servicing AI networks that don’t use its hardware. This benefits it even if a Run.ai customer doesn’t use NVDA GPUs.
Is NVDA Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Nvidia is Strong Buy based on 37 Buy and three Hold ratings over the last three months. With that comes an average price target of $177.08, a high of $220, and a low of $135. This represents a potential 28.04% upside for NVDA shares.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
