Multiple Microsoft, Amazon Deals for Nvidia Chips Confirm These Price Target Hikes
We see very positive developments ahead of these two holdings reporting tomorrow.
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Without question, one of the driving topics behind the market’s performance in October was the reaffirmation of AI adoption and demand for AI chips and services. We saw that across all the Pro Portfolio’s holdings last week, and odds are we will see more of that across quarterly results from Palantir (PLTR) after today’s close and upcoming results from Eaton (ETN) tomorrow morning and Arista Networks (ANET) after tomorrow’s close. But even as we begin trading in November, fresh AI-related announcements are carrying the market higher today, as evidenced by the larger gain in the Nasdaq Composite compared to the other market averages.
Those announcements include Microsoft (MSFT) saying it will invest $15.2 billion in the United Arab Emirates between 2023-2029 as part of its efforts to grow its business in the region. We see that as part of the telegraphed increase in Microsoft’s capex, but it’s what it said alongside that announcement that matters more to us and our shares of Nvidia (NVDA) . Microsoft said it received an export license to send advanced artificial intelligence GPUs to the country, including those from Nvidia. As we understand it, the export license was approved by the Commerce Department and allows Microsoft to ship the equivalent of 60,400 additional A100 chips, and some of Nvidia’s GB300 GPUs.
That is a nice piece of data that supports the increase we made last week to our price targets for shares of Nvidia and Marvell (MRVL) .
But that wasn’t the only piece of supporting news out today.
OpenAI announced it has signed a deal with Amazon (AMZN) Web Services worth $38 billion to help supply it with “hundreds of thousands” of Nvidia's GPUs. That's another positive data point for our NVDA shares, but it also backs up the comment from Amazon management last week that it had a large number of announced new deals in October for AWS. Plain and simple, that builds on the $200 billion in AWS backlog exiting the September quarter.
Lambda, the Superintelligence Cloud, also announced today a multibillion-dollar agreement with Microsoft to deploy AI infrastructure powered by tens of thousands of NVIDIA GPUs, including NVIDIA GB300 NVL72 systems.
As we think about those announcements from today, rising capacity levels mean more demand for electricity and networking to connect that capacity. In other words, more support for a bullish outlook from Eaton and Arista Networks tomorrow — especially after OpenAI's updated agreement with Microsoft to buy an incremental $250 billion of Azure services in the coming years.
It also suggests that chip capacity levels could be constrained, and that has us thinking back to what Amazon said last week about strong demand for its Trainium AI chips. And this is where we remind you that Amazon is one of Marvell’s custom AI silicon customers.
Eaton Makes a Big Acquisition
On the subject of Eaton, it agreed to acquire the Boyd Thermal business of Boyd Corp. from Goldman Sachs Asset Management for $9.5 billion. Boyd Thermal, which provides thermal components, systems, and ruggedized solutions for data centers, aerospace, and other end markets, has forecast FY 2026 sales of ~$1.7 billion, including $1.5 billion in liquid cooling.
We like the move from a strategic perspective, but we also want to hear much more about cross-marketing opportunities and synergies Eaton plans to wring out of Boyd Thermal. We should get at least some of the pieces to that puzzle tomorrow and a more complete picture when Eaton rolls out its formal 2026 guidance in January.
At the time of publication, TheStreet Pro Portfolio was long NVDA, ETN, ANET, MSFT, AMZN, PLTR and MRVL.
