Nvidia (NASDAQ:NVDA) stock climbed 1.6% in premarket trading Wednesday, while Meta Platforms (NASDAQ:META) shares gained around 1% following the announcement of a multiyear strategic partnership to expand Meta’s AI infrastructure using Nvidia technology.

The collaboration will involve Meta building hyperscale data centers optimized for AI training and inference, deploying millions of Nvidia Blackwell and Rubin GPUs along with Nvidia CPUs. The partnership also includes integration of Nvidia’s Spectrum-X Ethernet switches into Meta’s network infrastructure.

“No one deploys AI at Meta’s scale — integrating frontier research with industrial-scale infrastructure to power the world’s largest personalization and recommendation systems for billions of users,” said Jensen Huang, Nvidia’s founder and CEO.

The agreement represents the first large-scale deployment of Nvidia’s Grace-only CPUs, which are expected to deliver significant performance-per-watt improvements in Meta’s data centers. The companies are also collaborating on deploying Nvidia Vera CPUs, with potential large-scale implementation in 2027.

Meta has additionally adopted Nvidia Confidential Computing for WhatsApp to enable AI capabilities while protecting user privacy, with plans to expand these privacy-enhanced features across Meta’s portfolio.

“We view the deal as an incremental positive for NVDA,” RBC Capital Markets analyst Srini Pajjuri said in a note.

Pajjuri said the opportunity is “clearly incremental for Nvidia” and should also support Arm Holdings (NASDAQ:ARM). He added that if Meta expands deployment of Nvidia’s standalone CPUs, it could be seen as a modest negative for AMD and Intel’s (NASDAQ:INTC) server CPU exposure at Meta.

Advanced Micro Devices (NASDAQ:AMD) stock fell 1.2% in premarket trading, while Arista Networks (NYSE: ANET) stock dipped about 3%. 

However, Pajjuri noted that overall server CPU demand remains strong, with demand significantly outstripping supply, driven by Agentic AI, retrieval-augmented generation and other applications.

“As such, we expect any impact to AMD and INTC’s near term estimates to be modest,” he added.