NVIDIA Rises 4% on Reported $12.9B Hugging Face Deal, Dell Jumps 8% After Guidance Beat
NVIDIA and Dell are both surging on separate catalysts today, but the chip sector fund is barely moving, and that split reveals something important about where the real AI buildout money is actually flowing.
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Two AI infrastructure names are surging on separate company-specific catalysts, and the broader chip fund is barely moving alongside them. The split says today’s buying is concentrated in two names, not a sector-wide bid on the semiconductor complex.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) stock is up 4% to $225.96 midday after Bloomberg reported that the chipmaker is in advanced talks to acquire AI platform Hugging Face for $12.9 billion, with roughly another $1 billion potentially going toward employee retention. Bloomberg said an agreement could come as soon as this week, but no final deal has been reached.
Meanwhile, Dell Technologies (NYSE:DELL) stock is up 8% to $457.15 after the server maker raised its full-year revenue outlook by roughly $25 billion and posted its largest quarter on record. The iShares Semiconductor ETF (NASDAQ:SOXX) is up 0.2% to $501.28, so a sector-wide AI bid isn’t showing up in the fund.
Dell Guidance Beat Fuels a Record Quarter
Dell reported fiscal second-quarter revenue of $46.97 billion, up 57.8% year over year, and adjusted EPS of $7.04. Dell founder Michael Dell said in a post on X that earnings per share rose 273% year over year, and management flagged broadening demand across compute, storage, and networking.
AI-Optimized Servers revenue doubled year over year to $16.4 billion in the quarter, and Dell booked a record $60.9 billion in AI orders. Dell’s traditional server and networking revenue climbed 122% year over year, storage revenue rose 26%, and the client solutions group was up 20%.
Dell’s full-year fiscal 2027 revenue guidance was raised to $192 billion, up roughly $25 billion from the prior outlook, with AI-Optimized Servers revenue guided to $74 billion for the year. Non-GAAP EPS guidance was lifted to $25.50, and Dell exited the quarter with a record $95 billion AI backlog. The Dell founder captured the moment on X: “There’s an old Texas saying I may have just made up … If you keep growing EPS 200%+ y/y something good will happen.”
NVIDIA’s Reported Hugging Face Bid
The Hugging Face report gives NVIDIA a fresh handle on the open-source model layer that sits on top of its GPUs, and it lands on a day when Dell’s guidance is arguing that AI infrastructure spend is still accelerating. That combination is doing most of the work in NVIDIA stock’s move today.
Hugging Face has become a default distribution point for open-source AI models, and folding it into NVIDIA’s stack tightens the connection between the hardware layer and the model layer that runs on it. Nearly all open models run on NVIDIA, so an acquisition would be less about winning developers than locking in a hub where they already live.
NVIDIA has separately guided to 70% revenue growth for fiscal 2028, well above prior forecasts of 45%. CEO Jensen Huang put the setup plainly on the company’s last call: “AI is now doing productive and useful work. AI is generating profitable tokens.”
Bloomberg’s report remains a scoop rather than a company announcement, so terms and timing can still shift. Neither NVIDIA nor Hugging Face has confirmed the reported figure, and today’s move should be read against a deal that is pending rather than closed.
Server Maker Outruns the Chipmaker
Through Tuesday’s close, Dell stock was up 241% year to date, while NVIDIA stock was up 17% over the same period. That spread cuts against the assumption that NVIDIA is the purest way to own the AI buildout this year, and it reframes Dell as the deployment-layer beneficiary that has captured the most upside.
Our September 1 coverage noted that Dell’s rally had raised the bar going into this report. Adding another 8% on the release says the results cleared that bar, and by a wide margin.
The read-across for NVIDIA is real but secondary. Dell’s $95 billion AI backlog represents future demand that ultimately routes back to NVIDIA silicon, which helps explain why the chipmaker is up on a day whose primary catalyst belongs to a customer rather than the company itself.
What to Watch Next
Traders can watch for whether the concentrated bid in Dell and NVIDIA broadens into the wider chip complex over the next several sessions. If SOXX starts catching up, the story shifts from two company-specific repricings to a sector-wide reflation of AI hardware names.
Investors sizing their exposure to AI infrastructure should consider whether NVIDIA’s dominance narrative still justifies a single-name concentration in their positions, or whether spreading their allocation across the server layer captures more of the actual buildout (we pulled together seven non-chipmaker suppliers powering this buildout in a free report here). The year-to-date gap between Dell and NVIDIA is the argument for the second view, and today’s action did nothing to close it. A moderate weighting on both layers, sized to their conviction on which one captures more margin over time, is the more balanced read for a prudent investor’s allocation.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.
His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.
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