NVIDIA’s stock declined 4.3% to $218.15 in afternoon trading on Friday, paring an earlier gain to $229.26 and trading near the session low of $217.89.
The chipmaker paused portions of its AI Compute Partnership Program, which allowed smaller cloud providers to finance NVIDIA-powered infrastructure through revenue-sharing agreements. The decision followed objections from potential partners over NVIDIA’s attempts to exert greater control over customer usage, according to a report by the Wall Street Journal. Internal concerns regarding regulatory and antitrust risks also contributed to the pause, the report said.
Separately, a separate report indicated NVIDIA had agreed to acquire AI model platform Hugging Face for approximately $12.9 billion. The proposed deal introduced additional uncertainty over capital allocation, contributing to investor caution.
The developments followed NVIDIA’s fiscal second-quarter results for 2027, released on Tuesday. Revenue rose 106% year-over-year to $96.2 billion, while adjusted earnings per share increased 120% to $2.22. The company guided gross margins in the fourth quarter to compress to roughly 71-72%, citing rising memory costs as a key factor.
Macroeconomic sentiment also weighed on technology equities. Federal Reserve Chair Kevin Warsh delivered a hawkish message at the Jackson Hole Economic Policy Symposium, stating that inflation remains elevated and underlying trends have not meaningfully improved. This raised expectations for a potential rate hike, prompting two-year Treasury yields to rise. The rate-sensitive Nasdaq Composite declined in response.
Semiconductor peers also traded lower, with Advanced Micro Devices, Broadcom and Micron among those declining alongside NVIDIA.
