Nvidia's (NASDAQ: NVDA) shares sharply reversed course on Monday. Shortly after the market open, they jumped by about 3%, then fell by about 2% following news from Groq.
Earlier today, Nvidia announced the start of mass production of its Groq 3 LPX rack, turning the technology acquired through its largest-ever acquisition into ready-to-use hardware.
In December of last year, Nvidia spent $20 billion to acquire assets from the AI chip development startup Groq. These racks will be supplied to the neo-cloud computing company Nebius Group (NASDAQ: NBIS), where they will be used with Vera CPUs and Rubin GPUs.
Nvidia senior director Dion Harris told reporters that the launch is scheduled for later this year. Nvidia aims to accelerate data processing where speed matters for AI agents, especially for programming systems that need to respond without long delays. Nvidia states that cloud providers can charge a higher fee for tokens that meet stricter speed and latency requirements.
According to FactSet (NYSE: FDS), Nvidia's current market capitalization is approximately $5.2 trillion, making it the world's largest company by market cap. By Friday's market close, the company's stock had risen nearly 7% in August, while the S&P 500 index had gained about 2.5%.
Data from London Stock Exchange Group (LSE: LSEG) indicates that analysts expect quarterly revenue and profit to reach roughly double the level of the same period last year.
Nvidia Integrates Groq 3 into Client Systems as Faster AI Data Processing Creates Another Paid Service Tier
Each Groq 3 LPX rack houses 256 individual Groq 3 chips. According to Nvidia, a full setup can generate 3400 tokens per second based on AI benchmarks. Each processor has 500 megabytes of RAM (SRAM) directly on the chip.
This allows data to be stored near the processor and eliminates slowdowns caused by slower memory. Samsung (KRX: 005930) manufactures the Groq chips, while Taiwan Semiconductor Manufacturing (NYSE: TSM) produces Nvidia's GPUs.
Dion explained how Nvidia and cloud providers can monetize this speed. "For those providing tokens, this opens up the possibility of offering premium service tiers for those users and customers who truly require the most latency-sensitive service level agreements," he said.
Cloud companies can then create another pricing level for customers who need faster AI responses instead of the standard service speed.
Nvidia is also ramping up shipments of its Vera Rubin systems, production of which began earlier this year. When Vera Rubin and Groq 3 LPX were unveiled in March, CEO Jensen Huang stated that Blackwell and Vera Rubin together could generate a total of $1 trillion in sales by 2027.
Jensen also stated plans to allocate 25% of the data center floor space used for software processing to Groq processors. "The rest of my data center is 100% occupied by Vera Rubin processors," Jensen said.
Wall Street Raises the Bar for Nvidia as Analysts Maintain High Stock Price Expectations
Analysts at Rosenblatt Securities maintained their "Buy" recommendation for Nvidia stock and kept their price target at $325.00. Nvidia shares were trading at $214.72, while InvestingPro estimated a fair value of $259.96.
Rosenblatt analysts expect Nvidia's Q2 FY2027 report to exceed Wall Street expectations for both revenue and profit. They also expect the earnings release to push the company's stock higher.
Wedbush analyst Matt Bryson, who rates Nvidia shares "Outperform," expects the recent stock rally to continue after Wednesday's results. Matt also believes Nvidia will beat its own forecasts and provide guidance for the October quarter that is better than Wall Street analysts expect.
"We again expect NVDA to beat its forecasts and confirm guidance for October above analyst expectations, given 1) hyperscale spending growth, which was further solidified by Q2 results, and 2) a supply situation we still view as best-in-class, where access to components and materials, not end demand, defines shipment volumes," wrote Matt.
Nvidia is scheduled to release its second-quarter financial results on Wednesday after the market close, and as usual, Cryptopolitan will provide live coverage.
end-content
