Should You Buy, Sell, or Hold Nvidia Stock on Gretel Acquisition News?
Nvidia (NVDA) is a technology company specializing in computing infrastructure, such as providing computer graphics and networking solutions. The company is known for popularizing the graphics processing unit (GPU) and for advancing the gaming industry.
Nvidia's stock has had an interesting year so far, to say the least. The stock had a massive selloff when the market was introduced to artificial intelligence (AI) models from Chinese startup DeepSeek. NVDA's stock recorded the most significant one-day loss in history crashing 17%. Shares are down 16% in the year to date.
Nvidia Completes AI Acquisition
Nvidia has penned a deal to acquire synthetic data provider Gretel. The deal was closed for an undisclosed nine-figure amount that is reportedly higher than Gretel's latest $320 million valuation. The move will see around 80 of Gretel's employees being incorporated into Nvidia.
Nvidia has been rolling out synthetic data generation tools for developers to train their AI models, and Gretel offers a synthetic data platform and a host of APIs that will support developers in these efforts.
Experts believe in theory that the use of synthetic data can solve the data scarcity problem, something the industry has been struggling with since 2022 when ChatGPT's breakthrough. This is a problem that suggests there may not be enough data to accurately train AI models and allow them to make good predictions.
Synthetic data is machine-produced, non-human data which mimics real-world data. It is created using statistical methods and techniques like deep learning and generative AI. In the place of real data, synthetic data can help train models. However it is to be noted that experts do warn that synthetic data in generative AI models has its own sets of risks.
Interestingly, Gretel raised more than $67 million before being acquired by Nvidia, and in December 2023, it penned a deal with Microsoft (MSFT) to join the Microsoft for Startups Pegasus program and in November 2024, the two companies announced a Gretel Azure OpenAI Service partnership.
Nvidia Outscores Analysts
Nvidia announced its fourth-quarter results for its fiscal 2025 on Feb. 26, posting a profit of $22.09 billion. It can be translated to a profit of $0.89 per share, beating analysts' $0.84 per share estimates. The company also posted revenue of $39.33 billion for the quarter, easily outscoring analysts' $37.72 billion estimates.
On a full-year basis, Nvidia posted a profit of $72.88 billion, translated to $2.94 per share, with total revenue of $130.5 billion.
For first quarter of its fiscal 2026, management anticipates revenue in the range of $43 billion with GAAP gross margin at 70.6%.
Analyst Opinions on NVDA Stock
Despite the recent turmoil surrounding NVDA, analysts maintain a solid position on Nvidia with a 'Strong Buy' consensus rating and a mean price target of $177.19. This reflects upside potential of more than 50% from the current trading level.
The stock has been reviewed by 44 analysts and received 38 'Strong Buy' rating, two 'Moderate Buy' ratings, and four 'Hold' ratings.
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