The xAI deal reportedly envisions a $2 billion contribution by Nvidia, as the former plans to raise $7.5 billion in equity and $12.5 billion in debt financing.

In this photo illustration, an Nvidia chip is seen through a magnifying glass on August 1, 2025 in Beijing, China. (Photo by VCG/VCG via Getty Images)

Shanthi M·Stocktwits

Published Oct 08, 2025 | 5:13 AM GMT-04

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Artificial intelligence (AI) chipmaker Nvidia Corp.’s (NVDA) shares are on the mend as they rose nearly a percent in Wednesday’s early premarket session, recovering from a three-session sell-off. The return of optimism toward Nvidia stock followed reports that the Jensen Huang-led company participated in an equity financing round of Elon Musk's artificial intelligence startup, xAI.

Retail traders, however, remained wary of the stock. On Stocktwits, retail sentiment toward Nvidia stock remained ‘bearish as of early Wednesday, and the message volume on the stream was ‘low.’

Screenshot 2025-10-08 at 5.12.16 AM.png — NVDA sentiment and messsage volume as of 5:10 a.m. ET, Oct. 8 | source: Stocktwits

Nvidia has been heavily investing in AI-leveraged companies. After taking stakes in small AI infrastructure firms that source chips from Nvidia, it announced a $5 bet in struggling chipmaker Intel (INTC). In late September, Nvidia announced a strategic partnership with Sam Altman-led OpenAI to enable the latter to deploy at least 10 Gigawatts of AI data centers armed with Nvidia systems.

The xAI deal reportedly envisions a $2 billion contribution by Nvidia, as the former plans to raise $7.5 billion in equity and $12.5 billion in debt financing. In return, xAI will reportedly purchase Nvidia AI chips for its Memphis data center facility.

A Stocktwits platform user sounded out the fears that have been lurking in investors' minds. While noting Nvidia’s investment in CoreWeave, OpenAI, and xAI, they said, “This is turning out to be the biggest circular scam now.”

But another watcher said, “It's a big circular dependency chain that will create a feedback loop. Yeah, this will end well.”

NVIDIA's stock has gained nearly 38% for the year-to-date period compared to the 15% gain for the SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the S&P 500 Index, and the 19% rise by the Invesco QQQ Trust (QQQ).

According to Koyin, the average price target for the stock is $214.85, implying roughly 45% upside potential from Tuesday’s close.

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