A Deal With Groq Is Lifting Nvidia's Stock as 2025 Approaches

Key Takeaways Nvidia earlier this week announced a partnership agreement with inference chipmaker Groq. The partnership will have Grog's founder and CEO Jonathan Ross and others from the company joining Nvidia, which is reportedly paying $20 billion for some Groq assets. The trading year is almost over-but Nvidia still has some news to make. Nvidia's shares rose early Friday, lifted by news of a deal with Groq.CFOTO / Future Publishing via Getty Images The chip giant earlier this week struck a deal with inference chipmaker Groq, a non-exclusive licensing pact that according to the announcement leaves the latter company independent-but also has founder and CEO Jonathan Ross, President Sunny Madra and other members of the company joining Nvidia ( NVDA ) “to help advance and scale the licensed technology.” Why This Matters for Investors Nvidia, the world's most valuable company, has been a powerful stock largely on the back of powerful growth in its business. This week's news of a deal that includes a licensing partnership, the acquisition of some key executives and, reportedly, a multibillion-dollar investment is another signal of optimism about its business. The news helped lift Nvidia's shares on Friday, with the stock-up some 40% in 2025 so far-more than 1.5% higher in morning trading. (Read Investopedia's live coverage of today's trading here .) Investors may be cheered in part by reports that Nvidia is also acquiring some of Groq's assets, with CNBC reporting a $20 billion price tag for them-it's considered Nvidia's biggest-ever acquisition-in an indication of sustained opportunity for dealmaking in the AI sector to close out the year. (Groq referred Investopedia to its statement and to Nvidia; Nvidia in an email said "We haven’t acquired Groq.") Groq CFO Simon Edwards is set to take over as CEO. The company in September said it raised $750 million at a valuation of $6.9 billion. "Inference is defining this era of AI, and we’re building the American infrastructure that delivers it with high speed and low cost," Ross said at the time. Wall Street analysts continue to see room for Nvidia's shares to keep rising. The mean price target as tracked by Visible Alpha is $254, well above recently prices around $191. The company remains the world's most-valuable, with a market capitalization above $4.6 billion. This article has been updated since it was first published to reflect comments from Groq and Nvidia and to note recent market action. Do you have a news tip for Investopedia reporters? Please email us at [email protected]

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