TOPSHOT - Nvidia CEO Jensen Huang delivers a keynote address at the Consumer Electronics Show (CES) in Las Vegas, Nevada on January 6, 2025. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images)
AFP via Getty Images
Partnership activity as well as chatter about Nvidia’s potential for M&A deals are picking up steam in the cloud and communications industry. There’s a reason for this: The needs for more complete technology integrations and channel expertise are emerging as the complexity and stakes of the AI infrastructure race grow.
Recent reports have stated Nvidia considered merging with a Dell Technologies or an HPE, but Nvidia officials have denied such reports, saying they hold no truth.
Meanwhile, Nvidia CEO Jensen Huang continues to make deals at a feverish pace. After announcing a new partnership with Dell at Dell Technologies World this week, he said that demand for AI infrastructure is “parabolic” and demands new solutions. That, of course, is a result of $700 billion in infrastructure spending expected in 2026 from the world’s largest hyperscalers.
Why would Nvidia need help and more assets? While it’s still the undisputed leader in AI chips and systems, it’s clear that the complexity of AI infrastructure requires diverse expertise and guidance to deliver these products to customers. As the AI infrastructure market expands into inference and enterprises, it may need a wider channel in the footprint, as well as integration expertise.
With the surging demand for AI, there are numerous bottlenecks, including power, optical components, memory chips, and networking systems. Infrastructure architects also say they need help deploying AI infrastructure at pace.
This is where the large established players such as Cisco, Dell, and HPE have been helping. Key chipmakers such as Nvidia and AMD are busy pairing with large technology companies such as these to build reference designs and integrated products for their portfolios.
MORE FOR YOU
Cisco CEO Chuck Robbins spoke of the integration challenges in addressing Cisco’s earnings report the week of May 11th, in which Cisco executives raised their annual forecast for growth in the 15% range. Robbins said that customers are flocking to Cisco’s integrated AI infrastructure, which includes its own networking, optics, and custom silicon—giving it better control over the supply chain that is struggling to secure reliable components.
Nvidia’s most prominent deals include a partnership with Cisco, struck in early 2025, to package up joint networking solutions. This week at Dell Technologies World, Dell announced a new AI Factory with Nvidia components, including a deskside agentic AI platform designed to reduce costs and boost security.
But that just scratches the surface. In March, Nvidia announced a huge number of partners in the development of its reference design for the next-generation Vera Rubin DSX AI Factory. The list included a diverse group of technology and industrial players, such as Dassault Systèmes, Eaton, Jacobs, PTC, Schneider Electric, Siemens, Vertiv, and many others.
Would Nvidia pull the lever on big headline M&A? There’s a reason people are talking about it. Nvidia has almost $6 trillion in equity, it has made billions of dollars in strategic investments, and it could afford to buy almost anybody.
Another reason it makes sense: Boom times and rising stock prices often produce huge deals. Think of the $180 billion deal among Time Warner and AOL in 2000, or even the more recent deal between SpaceX and xAI, engineered by Elon Musk.
Whether or not there’s any fire with the M&A smoke, it’s possible that the need for a larger channel presence will lead Nvidia to weigh options. Nvidia has become the most valuable technology company on Earth, but it still needs technology partners to strengthen its position in areas such as storage and networking to provide fully integrated AI system.
A deal makes sense because of Nvidia’s growing power, ballooning equity, and need to diversify. Both Dell and HPE shares have been surging on the growth in the market, but they’re still relatively cheap.
Coincidentally, networking giant Cisco has also been surging, but its recent powerful earnings report is probably the largest contributor to investor interest. I could see Nvidia and Cisco being one of the most powerful partnerships.
Judging from Nvidia’s recent actions, it sees the benefits of partnerships with the “adult” tech conglomerates to put together integrated products and help customers install them faster.
Let’s look at the wild economics that could make such a deal compelling. Nvidia has a market capitalization of $5.4 trillion, and Wall St. analysts project its 2026 annual revenue run rate at $320 billion to $374 billion. In comparison, Dell’s market cap is about $153 billion, with $120 billion of annual revenue. Nvidia’s price/sales ratio is 25 and Dell’s is 1. So, if Nvidia wanted to buy Dell, it could get $100+ million in revenue at 1/25th the multiple of its own stock. This also offers a path to wider diversification into storage, servers, and other enterprise systems.
There are similar comparisons that could be made with Cisco or HPE, with Cisco being arguably the more powerful combination (in this analyst’s opinion). Cisco is regarded as the leader in networking, which is currently seen as a critical linchpin to AI systems. Nvidia has its own networking solutions, but Cisco has a much larger footprint with enterprise businesses as well as cloud and communications providers.
Cisco’s current market cap is $470 billion and it recently guided for 14% growth this year, which is impressive for such a mature company. Yet Cisco’s market cap is only 8% of Nvidia’s. Those numbers could offer compelling economics for a deal.
Of the possible choices, HPE is probably the least appealing. It is the smallest of the companies discussed and it has less strategic pieces than either Cisco or Dell. It has a relatively paltry $44 billion market cap, with $36 billion in trailing annual sales. And even with its recent merger with Juniper Networks, HPE’s still in second place to Cisco in the networking market.
Just think about it this way: Nvidia could buy Dell, Cisco, and HPE at the current market price and it would still represent just about 10% of its entire equity! Pretty amazing.
Will it happen? Anything’s possible. The drive to partner to build more integrated systems and reach more deeply into enterprise markets is something that Huang is clearly thinking about.
此内容由惯性聚合(RSS阅读器)自动聚合整理，仅供阅读参考。 原文来自 — 版权归原作者所有。