Nvidia continues its strategy of funding AI infrastructure partners like Cohere, Nebius, and CoreWeave to secure long-term demand for its H100 chips as it reports record Q2 revenue of $96.2 billion.
Nvidia reported record Q2 FY2027 revenue of $96.2B (more than double YoY), beat EPS consensus ($2.22 vs $2.08), received multiple Buy ratings with target prices up to $515, and its valuation metrics are below historical averages.
Cohere is in talks to raise $3B at a $20B valuation (nearly triple last year's $7B), with ARR quadrupling to $240M, and Nvidia's backing plus sovereign AI positioning drive growth.
Nvidia has previously backed Nebius as part of its strategy to fund AI firms using its hardware, which supports NBIS's growth.
Nvidia also invested in CoreWeave, an AI cloud provider, continuing the pattern of funding demand for Nvidia chips.
Oracle is mentioned as a customer of Cohere's sovereign AI, which could enhance its enterprise offerings, but no specific financial impact is discussed.
SOXX is used as a benchmark, up 101% over the past year and 72% YTD, to compare Nvidia's relative performance in the sector.
Nvidia is expanding its strategic investment portfolio by backing Toronto-based AI firm Cohere, which is currently in talks to raise $3 billion at a $20 billion valuation. By supporting sovereign AI providers that utilize its hardware, Nvidia is effectively funding its own demand while maintaining a strong balance sheet with $23 billion in net cash.
Sovereign AI refers to AI models built for private servers, allowing organizations like banks and governments to keep data internal. Nvidia invests in these firms to ensure their platforms are optimized for Nvidia chips, thereby creating a self-sustaining cycle of hardware demand.