Shares of NVIDIA Corporation NVDA were trading higher by more than 2 percent on Friday as investors and traders were encouraged by the prospects of its new partnership with Alibaba Group Holding Ltd BABA's cloud unit, AliCloud.
Related Link: Nvidia Details New Partnership With Alibaba's Alicloud
Mark Lipacis of Jefferies commented in a note that AliCloud will partner with around 1,000 data developers and ultimately become a $1 billion business. The analyst stated that partnering with Nvidia will "make it happen."
Lipacis continued that the partnership represents just 1 of many similar announcements between hyperscale cloud companies and "highlights one of the growth legs that underpins our Buy thesis."
Finally, Lipacis pointed out that Nvidia's cloud business has grown at a 31 percent compounded annual growth rate over the past 3 years and represents 6 percent of revenues. The analyst added that he expects the cloud segment to continue driving growth moving forward.
Shares of Nvidia remain Buy rated with an unchanged $38 price target.
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