Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about Nvidia (NVDA - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Nvidia currently has an average brokerage recommendation (ABR) of 1.14, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 51 brokerage firms. An ABR of 1.14 approximates between Strong Buy and Buy.
Of the 51 recommendations that derive the current ABR, 47 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 92.2% and 5.9% of all recommendations.
Brokerage Recommendation Trends for NVDA
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The ABR suggests buying Nvidia, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is NVDA Worth Investing In?Looking at the earnings estimate revisions for Nvidia, the Zacks Consensus Estimate for the current year has increased 0.1% over the past month to $9.25.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Nvidia. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Nvidia may serve as a useful guide for investors.
Shares of Nvidia (NVDA - Free Report) have gained 6% over the past four weeks to close the last trading session at $239.24, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $326.9 indicates a potential upside of 36.6%.
The average comprises 48 short-term price targets ranging from a low of $180.00 to a high of $515.00, with a standard deviation of $65.44. While the lowest estimate indicates a decline of 24.8% from the current price level, the most optimistic estimate points to a 115.3% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's because the ability and unbiasedness of analysts in setting price targets have long been questionable.
But, for NVDA, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You Should Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Why NVDA Could Witness a Solid UpsideAnalysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason to expect an upside in the stock. That's because empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current year, one estimate has moved higher over the last 30 days compared to no negative revision. As a result, the Zacks Consensus Estimate has increased 0.1%.
Moreover, NVDA currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much NVDA could gain, the direction of price movement it implies does appear to be a good guide.
Tzv. kreativní destrukce bývá někdy mylně vztahována k nějakému „očišťování“ ekonomiky během recesí a krizí. Bez ohledu na to, že během nich může úplně zbytečně padnout i řada zdravých firem. Joseph Schumpeter tento koncept používal ve vztahu ke konkurenci. Tedy k inovacím a k tomu, že tvořením nového zaniká něco staré. Možná bychom mohli ještě lépe mluvit o neustálé transformaci, ale to nechme nyní stranou. Dnes se chci podívat na kreativní destrukci a výbuch ziskovosti v polovodičích a souvisejících sektorech.
Následující obrázek ukazuje vývoj marží společností vyrábějících polovodiče a paměťové čipy. Zejména v druhém případě došlo v posledním roce k prudkému růstu toho, jaké zisky generují firmy z každého dolaru tržeb. Zatímco dříve mohl být standard zhruba na 30 – 40 centech, nyní je to více než dvojnásobek. U polovodičů došlo ke zvýšení z cca 50 – 60 centů na necelých 70:
Zdroj: X
Goldman Sachs přidává ke grafu i předpovědi dalšího vývoje pro následující dva roky. Podle nich by marže měly být v podstatě stabilní. Což obecně znamená, že by poptávka měla zůstat silná, nemělo by zároveň dojít ke zostření konkurenčních tlaků, které by marže tlačily dolů. A neměly by přijít nákladové tlaky, které by měly stejný efekt. Nejde přitom samozřejmě o sektory a aktivity, které by byly vyloženě lehce kopírovatelné. A kde by vybudování nových výrobních kapacit trvalo pár měsíců. I přesto se ale můžeme ptát, jak velkým lákadlem by výše uvedené mělo být pro nové společnost, celkové rozšiřování kapacit, inovace posouvající aktivitu a zisky k jiným firmám?
Je dobré si uvědomit, že na akciovém trhu a v indexu S&P 500 je řada společností, které mají marže vysoko nad nějakým průměrem, nebo mediánem. Samotné marže ale nejsou konečným ukazatelem toho, jestli firmy vydělávají „hodně“, nebo „málo“. Tudíž i toho, jestli jsou lákadlem pro jiné. Celkový obrázek je tu v kostce následující:
Ukazatelem onoho „hodně zisků, nebo málo“ je to, kolik firma vydělává ve srovnání s tím, jako cenu má kapitál, který jí financuje. Pokud by tato cena – požadovaná návratnost, byla třeba na 10 % ročně a firma na tento kapitál vydělávala jen 5 %, vydělává skutečně málo. A pohled na ní nebude asi u jiných podnikatelů budit nadšení k tomu, aby se vydali podobným směrem. Něco jiného by ale bylo, pokud by společnost generovala (po delší dobu) třeba 20 % návratnost.
Marže jsou samozřejmě důležitým faktorem, který zmíněnou návratnost ovlivňuje. Ale ne jediným. Záleží také na celkové velikosti tržeb a na tom, kolik kapitálu/aktiv je třeba na generování těchto tržeb. Vysokou návratnost kapitálu tak může dosahovat i společnost, která má velmi nízké marže, ale vysoké tržby (relativně k jejím aktivům a tudíž kapitálu). Nebo firma s vysokými maržemi, která nemusí mít hodně tržeb. Nyní pár konkrétních čísel:
Třeba Sandisk Corp dosahoval před fiskálním rokem 2026 negativní návratnosti aktiv a investic, v roce letošním je ale na 90 % návratnosti. Vydělal tedy téměř tolik, kolik má kapitálu financujícího jeho aktivity. Micron Technology dosahoval návratnosti investovaného kapitálu maximálně něco nad 10 %, v letošním roce je na 63 %. NVIDIA se už po roce 2024 přesunula na úrovně kolem 100 % návratnosti kapitálu. Taiwan Semiconductor se postupně posunul z úrovní nad 20 % nad 30 %. Broadcom velmi zhruba z úrovní pod 20 % ke 30 %.
Příběhy to jsou tedy na jednu stranu dost rozdílné, návratnost investovaného kapitálu se pohybuje od velmi nízkých desítek procent po úrovně u 100 %. Na stranu druhou jsou to příběhy podobné. V tom smyslu, že všude je nyní návratnost kapitálu pod požadovanou. Tu přitom nemusíme ani konkrétně počítat, protože je jasné, že je mnohem níže: Bezrizikové sazby jsou u 5 % a rizikové prémie v řádech desítek procent asi u těchto firem namístě nejsou.
Podle grafu tedy nějaká kreativní destrukce současného stavu v následujících pár letech nepřijde. Nejen marže, ale (hlavně) návratnost kapitálu ve zmíněných sektorech po ní ale celkem mohutně volají. V minulosti byla přitom řada firem, jejichž pozice se zdála neotřesitelná. Východoindické společnosti, ve své době Ford, GE, nebo třeba IBM. Ani tehdy nikdo nevěděl, kdy a jak jim zaklepe na dveře kreativní destrukce, respektive transformace. Ale v době „tentokrát jinak“ možná přijde nějaká překvapení. A mimochodem, konkrétní vývoj dost souvisí se schopností vnitřní firemní transformace. Která zase stojí na schopnosti vzdát se, nebo změnit to, co kdysi bývalo silnou stránkou. O tom někdy příště.
Item 1 of 2 Executive Chairman and CEO of Microsoft Corporation Satya Nadella speaks during the "Microsoft Build: AI Day" event in Jakarta, Indonesia, April 30, 2024. REUTERS/Ajeng Dinar Ulfiana/ File Photo
[1/2]Executive Chairman and CEO of Microsoft Corporation Satya Nadella speaks during the "Microsoft Build: AI Day" event in Jakarta, Indonesia, April 30, 2024. REUTERS/Ajeng Dinar Ulfiana/ File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesLaptop expected to use Nvidia's RTX Spark chips unveiled in JuneAnalysts say pricing is the biggest question after memory crunch drives up desktop and laptop costsNvidia raised DGX Spark AI desktop price by about 75% to $6,950 in recent weeksSAN FRANCISCO, Oct 7 (Reuters) - Microsoft (MSFT.O), opens new tab will unveil on Wednesday a new laptop powered by Nvidia's (NVDA.O), opens new tab chips, seeking to turn Windows into a platform for AI agents to handle tasks such as writing code without having to access the cloud, analysts said.
For Microsoft, the move represents a bet that some work that currently takes place in its costly Azure cloud computing data centers can be shifted to high-powered Windows machines in businesses and homes, a market where the Redmond, Washington-based firm retains a stronghold — and where its customers foot the hardware bills. It is a market opportunity that longtime rival Apple is also chasing with new Mac computers.
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For Nvidia, cracking the Windows PC market could help it go after one of the last major markets dominated by its longtime rivals Intel (INTC.O), opens new tab and Advanced Micro Devices (AMD.O), opens new tab.
The Microsoft-hosted event in San Francisco, which the company billed as an update on its Windows operating system and Surface line of hardware, will be the culmination of years of work between the flagship operating system maker for PCs and the AI chip company to bring many tasks such as writing computer code or tackling complex business projects directly to desktops and laptops with Nvidia's RTX Spark chips announced in June.
Microsoft CEO Satya Nadella and Nvidia CEO Jensen Huang will take the stage to introduce the Surface Laptop Ultra, as the new machine will be called.
One of the key challenges for Microsoft and Nvidia will be to show that agents, the long-running AI systems that can tackle complex problems on their own, can be safely contained on personal computers. Nvidia is already trying to prevent a repeat of the hack of AI hub Hugging Face, while Apple is looking to tighten up the process for giving AI agents full access to a Mac computer's hard drive.
But analysts said the biggest question will be the price of the new offerings after a memory-chip crunch has driven up prices for desktop and laptop machines.
When Microsoft originally pitched the idea of running AI tasks on PCs two years ago to save on costs, the laptops were mostly priced below $2,000, but in recent weeks, Nvidia increased the price of an AI desktop machine called the DGX Spark by about 75% to $6,950, thanks to the surging costs of its 128 gigabytes of memory.
Anshel Sag, an analyst at Moor Insights & Strategy, told Reuters that the memory prices are affecting both Apple and Microsoft's efforts.
Two years ago, "the software wasn't ready, but the hardware was. Now the software is ready and the hardware is too expensive to actually run it locally," Sag said. "So it's becoming this thing where only the people who have the budget can really afford to run AI locally."
Reporting by Stephen Nellis in San Francisco; Editing by Muralikumar Anantharaman
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Bloomberg has learned Elon Musk's SpaceX is in talks with banks and investors to raise $40 billion to buy chips from Nvidia in what would be among the biggest-ever debt financings for the AI buildout. A rally in stocks came to a halt and global bonds fell as mounting attacks on tankers in the Middle East pushed oil prices higher.
One of the most anticipated initial public offerings (IPOs) of 2026 could be coming shortly: Anthropic. Anthropic is an artificial intelligence (AI) lab that makes the Claude family of large language models. Anthropic has emerged as one of the leading companies in this area, and the market has been clamoring for it to go public for a while. Some estimates value the IPO at as much as $2 trillion, which is a very expensive price tag for how much the company generates and how much money it's losing. However, there will still be a large chunk of investors who buy in at the IPO. This may cause a short-term rally, but after that, the stock may need to show some profitability improvements to be considered a great long-term pick.
However, one statement in the leaked Anthropic prospectus drives me to conclude that investors should be buying up stocks of computing unit suppliers. The leader in this segment is Nvidia (NVDA +0.14%), and it looks like it could be a great stock to buy now based on these comments from Anthropic.
Image source: Getty Images.
AI could be much more advanced than it is now One of the most incredible statements from Anthropic in its prospectus document, according to Reuters, is that AI is "limited principally by the availability of compute." That's an incredible statement, as it basically says that if we had more computing power, we could be more advanced.
One of the primary reasons for Anthropic to go public is so it can have access to more funding sources, as it can raise money through debt issuance as well as by issuing more shares in the market. Anthropic isn't being shy about how much it's planning to spend, either: $518 billion during the next decade. That's a huge amount of growth ahead, and it could even be underestimating that if more compute becomes available.
Anthropic tells prospective investors that it doesn't believe demand will be an issue, just computing supply. That bodes well for companies like Nvidia, as it's supplying a large chunk of the computing power to the AI industry.
Nvidia's investment thesis hinges on supply constraints Computing unit suppliers like Nvidia still cannot make enough hardware to satisfy the demand from AI hyperscalers. In fact, Nvidia's forecast for growth of 70% during the next fiscal year hinges on the industry remaining supply-constrained. However, Anthropic believes this condition will persist for some time, continuing to drive AI hyperscalers to pay sky-high prices for computing units.
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This benefits Nvidia and its peers, and as I think about the consequences of a company like Anthropic going public, it pushes me to invest in Nvidia and other computing unit suppliers rather than Anthropic. Anthropic has a lot to prove with its business model, as it must build a huge subscription base that uses its products. It's likely, but it requires an enormous audience for the finances to make sense.
Let's say 1 billion people pay a $50 monthly subscription for Anthropic's product. That will generate $600 billion in revenue per year. That's an extremely bullish projection and a huge amount of money, but consider this: Wall Street analysts expect Nvidia to generate nearly $700 billion in 2028.
What does this mean? I think it's pretty simple. Nvidia is the world's most value company. It took it more than three decades to reach that point and it has prospered in recent years amid enormous AI spending. Anthropic has a long way to go before it's a viable business, much less a company on par with Nvidia -- and there's a lot of risk ahead.
This makes Nvidia an excellent long-term investment, as companies like Anthropic will fuel its growth. As a result, I'm more interested in buying Nvidia than I am in Anthropic.
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For technology investors, Nvidia (NVDA +0.14%) has been the gift that keeps on giving. Shares in the chipmaker are up 28.5% year to date. And this caps off a 1,110% rally over the last half-decade as the company benefits from surging demand for its AI data center hardware.
But how much longer can the boom continue? Let's dig deeper into the pros and cons of Nvidia to decide if it's still a good buy in October.
The state of the AI industry As of late 2026, the global AI industry shows no signs of slowing down. Analysts at Goldman Sachs estimate that by the end of the year, U.S. hyperscalers will have invested a whopping $800 billion in this opportunity, with much of that going to buy data center hardware designed and sold by Nvidia and its peers. They expect that annual investment total will reach $1.2 trillion in 2027 and $1.4 trillion in 2028 for a total of $7.6 trillion by 2031.
Image source: Getty Images.
If these projections are correct, Nvidia's second-quarter earnings demonstrate the type of results investors should start getting used to.
Revenue soared 106% year over year to $96.2 billion, driven by continued outperformance in the data center segment, which provides AI infrastructure like GPUs, accelerators, and networking equipment. The company's gross margins remain extremely high at 75%, which suggests clients are still willing to pay a premium for its cutting-edge products.
What is the catch? If something looks too good to be true, it probably is. And the biggest red flag about Nvidia is actually its rock-bottom valuation. Despite enjoying triple-digit growth, the stock's forward price-to-earnings (P/E) of just 24 is in line with the Nasdaq-100 average. On one hand, this simply means Nvidia's earnings are growing faster than its stock price can keep up. On the other hand, it also suggests many on Wall Street fear the boom won't last. There are some big reasons why the pessimists might be correct.
According to a recent Wall Street Journal study, U.S. consumers and businesses will need to spend the equivalent of 8.8% of the country's annual GDP on AI-related products and services by 2032 to justify the capital investment flowing into the industry today.
That amount ($3.5 trillion) represents significantly more than annual spending on food or energy, which is an incredibly high bar that seems unlikely to be crossed, even if AI eventually becomes an important part of the economy. And this doesn't even account for the fact that competition and advancing technology will likely bring down prices and margins across the industry. All this is bad news for Nvidia, as it has built its entire business on selling high-margin AI infrastructure.
As of the second quarter, Nvidia's data center segment accounts for over 96% of its revenue, making it exceptionally vulnerable to what appears to be an inevitable slowdown in data center build-outs.
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Nvidia has a lot going for it in October and beyond. The company combines explosive, innovation-led growth with a surprisingly low valuation of just 24 times forward earnings. And excitement is starting to rise again after management revealed a $235 billion buyback program, which will help the company return some of its profits to shareholders. That said, investors should look at everything in the full context.
Nvidia's buyback sounds huge on the surface, but it pales in comparison to the company's $5.45 trillion market capitalization. The larger a company becomes, the harder it is to move the needle. Furthermore, Nvidia will likely buy back shares near its all-time highs, at the peak of what increasingly looks like an AI bubble. The stock remains highly exposed to a slowdown in data center spending, making it still a little too risky for comfort despite its incredible results.
SpaceX is racing to raise tens of billions in borrowed money to lock in an exclusive chip supply deal, and the timing raises questions about who really benefits when the money moves.
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A recent report citing people familiar with the matter said SpaceX (NASDAQ:SPCX | SPCX Price Prediction) is seeking about $40 billion of financing to pay for an order of AI chips from NVIDIA (NASDAQ:NVDA). In after-hours trading, SpaceX fell about 1%, and NVIDIA rose about 0.5%.
Under the reported plan, SpaceX would take on the debt to fund the purchase, while NVIDIA would record the chip order as revenue when it ships.
SpaceX, Apollo Global Management (NYSE:APO) and NVIDIA did not immediately respond to requests for comment. The financing remains at the discussion stage.
What SpaceX Has Committed Versus What It Only Seeks SpaceX is reportedly seeking about $10 billion in bank loans and about $30 billion in investment-grade debt. Investment-grade means bonds rated as having low default risk, which pension funds and insurance companies can hold.
The bank loans are the easier part, because a small group of lenders can agree on terms quickly, but selling bonds that large to a wide investor base requires work with rating agencies and a marketing process that takes quarters.
Apollo is expected to lead the deal and place pieces with other buyers. Pimco is among the lenders in talks.
The financing is expected to close in 2027, which means the terms, the lender group and the final size could all still change before any money moves.
Spending Has Outgrown Revenue In the second quarter of 2026, SpaceX reported revenue of $7.81 billion against capital spending of $18.37 billion, of which $15.83 billion went to AI. It posted a net loss of $541 million.
On the August 4 earnings call, management said the next two quarters should look “very similar” on spending, and Elon Musk said, “So we’re exclusive to NVIDIA.”
More shares are coming anyway.
Borrowing avoids diluting shareholders today. Even so, lockup expirations will add 328.4 million marketable shares on October 9, another 328.4 million on October 24 and up to 1.3 billion after third-quarter earnings.
The stock priced at $135 in its June 11, 2026 initial public offering, peaked at $225.64 and closed at $171.92 on October 6. That close came one session after a 7.63% gain to its highest close since June, so insiders got their first chance to sell right after a rally, as the debt was being marketed.
What NVIDIA Gains NVIDIA closed at $239.24 after a record intraday high of $243.37, worth about $5.78 trillion. A large order matters, but at that size, no single customer changes the business.
Morgan Stanley (NYSE:MS) estimates AI infrastructure will need $1.5 trillion of outside financing by 2028. When more buyers borrow to pay for chips, NVIDIA’s revenue stability depends in part on whether those buyers can carry their debt.
What Analysts and Lenders Are Weighing on SpaceX Analysts are bullish. Adam Jonas carries a $300 target, Eric Sheridan of Goldman Sachs (NYSE:GS) is at $230, and the average is near $235. Those targets assume the spending pays off, and lenders are now being asked to fund that same plan with debt.
At a market value of about $2.2 trillion to $2.3 trillion, with losses, heavy borrowing, and new share supply, SpaceX carries risks that the analyst targets may not fully reflect.
NVIDIA’s exposure to the same AI spending carries less balance-sheet risk, because it gets paid when the chips ship, while SpaceX carries the debt for years. The power, cooling, and networking suppliers behind the expansion sit in a similar spot, paid up front as capacity gets built (we covered seven of them in a free report here).
It will be worth tracking whether SpaceX confirms the financing in a filing, whether rating agencies publicly engage, and whether the stock holds $171.92 through the October 24 unlock.
Contact [email protected] for any questions or corrections.
US equity futures slip after the S&P 500 hit a record high. Oil rises as traders weigh reports of increased Iranian attacks on vessels in the Strait of Hormuz.
AMD surged 221% in the past year while NVIDIA gained just 31%, yet one of these AI chip giants still dominates every metric that matters for a decade-long hold in a retirement portfolio.
Bloomberg Daybreak Europe is your essential morning viewing to stay ahead. Live from Brussels, we set the agenda for your day, catching you up with overnight markets news from the US and Asia.
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Elon Musk's SpaceX is in talks with banks and investors to borrow $40 billion to fund a purchase of Nvidia chips, according to a Financial Times report.
While not the top-performing technology stock of 2026, Nvidia (NASDAQ: NVDA) has, nonetheless, risen to a record valuation of $5.776 – just $224 billion short of the record-breaking $6 trillion – been one of the most consistent profitable investments of recent years.
Indeed, few companies have benefitted as much from the ongoing artificial intelligence (AI) boom and, following years of success, Finbold decided to calculate just how much a $1,000 investment in NVDA shares made at the start of each year would have risen.
Nvidia stock price five-year chart. Source: Google Here’s how much $1,000 invested in Nvidia during AI boom would be worth To begin with, Nvidia stock was changing hands at $188.85 on January 2, 2026 – the first regular session since New Year’s Day – and has risen 26.68% to $239.24.
Given this performance, a trader who purchased $1,000 worth of NVDA at the start of this year would have gained $266.80 as their position grew to $1,266.80.
Meanwhile, the blue-chip chipmaker was trading at $138.31 in the first session of 2025, meaning it had, by the October 6, 2026 close, risen 72.97%. Therefore, $1,000 would have grown by $729.70 and turned to $1,729.70.
As could be expected, the rise since January 2, 2024 – a day on which NVDA stock closed at $48.03 – was even more impressive, and would have led $1,000 to rise 398.11% – by $3,981.10 – to $4,981.10.
Lastly, Nvidia only slowly began its recovery by the start of 2023 – just two months after the original public release of ChatGPT – and was priced at $14.27. Thus, putting $1,000 into NVDA stock just as the AI boom was starting would have led to a 1,576.52% gain and the investment growing by $15,765.20 to $16,765.20.
Nvidia stock bull case Looking ahead, Nvidia appears confident in its future, meaning that even investors who only buy the equity as late as press time on October 7 can hope for substantial profits in the coming years.
Indeed, the semiconductor giant’s board recently approved a massive, $150 billion expansion to its already record-breaking share buyback program, simultaneously promising an additional upside to its stockholders and signalling confidence that the cash flows will remain healthy.
Similarly, Nvidia CEO Jensen Huang has remained consistently bullish about the future of AI and dismissive of essentially every concern the public has regarding the technology other than, perhaps, that Chinese companies might overtake their American peers.
Wall Street analysts also remain highly optimistic about NVDA stock’s performance in the next 12 months, and Deutsche Bank, arguably most famous for its extensive exposure to U.S. subprime mortgage-backed securities and for estimating a $1 trillion total addressable market for NFTs, allegedly estimated Agentic AI will have a TAM of up to $5.5 trillion by 2030.
Nvidia stock bear case Still, there are reasons to be cautious about Nvidia’s future. To begin with, multiple prominent analysts and veteran traders, including ‘Big Short’ Michael Burry, have been warning that the AI ‘boom’ is close to collapsing for months.
The stock market is quite obviously in its first stage of grief, denial.
Per 2000 and 2008, this stage lasts 6-9 months.
— Cassandra Unchained (@michaeljburry) October 6, 2026 Similarly, an equity research firm called Capital Economics warned in late September that 2027 will feature a massive S&P 500 correction. Considering the vast majority of stocks included in the benchmark index have been struggling of late, such a pullback is all but guaranteed to see NVDA shares crash if the prediction proves correct.
Lastly, Nvidia could soon find itself struggling to sell its hardware. On the one hand, an investigation by the prominent AI bear Ed Zitron and The Guardian estimated that as much as 50% of all chips sold by the giant remain unused and unplugged, raising the question of why other technology firms would buy products they are unable to use.
On the other hand, CNBC Carl Quintanilla shared a Goldman Sachs (NYSE: GS) projection that hyperscaler capital expenditures (CapEx) growth will see a massive drop by the fourth quarter (Q4) of 2027 in an October 6 X post.
Hyperscalers remain Nvidia’s key clients for its AI-focused products – the main sales drivers.
Elon Musk's SpaceX is in talks with banks and investors to raise $40 billion to buy chips from Nvidia, people familiar with the matter said. Pimco is one of the investment managers looking at the deal, according to the people.
Back in August, Nvidia (NVDA +0.14%) announced a partnership with six Wall Street asset managers to provide financing for AI infrastructure build-outs. The effort aims to provide up to $500 billion to companies that build data centers and install Nvidia's GPUs in them.
Here's the key to those deals, though: The GPUs themselves act as collateral on the loans. That means the value of the GPUs is one of the main considerations for lending decisions.
An extra $500 billion in easy-to-access capital would be a boon for companies that are heavily reliant on debt to build new data centers. Neocloud companies like CoreWeave (CRWV +4.96%) and Nebius (NBIS +7.44%) are highly leveraged, and making huge bets that the AI compute shortage will continue for some time. Nvidia, meanwhile, benefits from its customers having more capital in their hands to put toward the data center build-out.
But Nvidia is facing some major pushback from its financing partners on Wall Street, and it all centers around how much of their value its GPUs retain over time. The answer to that question could reverberate throughout the entire industry.
Image source: Nvidia.
A big mismatch between Nvidia and the banks At the center of the controversy is just how long an Nvidia GPU's useful life is. Nvidia says it could be a decade; Wall Street bankers say it's more like three to four years, according to a Reuters report.
Nvidia published a blog post in response to the Reuters article. At the center of its argument was the question of how hyperscalers have changed their depreciation schedules for server and networking equipment over the last few years. It showed that Alphabet, Microsoft, Amazon, and Meta Platforms have extended the depreciation life of their hardware from three or four years to five or six years.
Also working in Nvidia's favor are recent pricing changes from CoreWeave and Nebius. CoreWeave announced that it "continued to contract new compute capacity at higher prices," signing new customer contracts at an annualized rate of $40 million per megawatt in September. Nebius, meanwhile, just raised prices across the board for hourly compute rentals by 17% to 21% for various Nvidia GPUs, including four-year-old chips.
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Nonetheless, at the end of the day, the banks are the ones putting up the capital, so they hold all the cards. The challenge is that it's truly impossible to know yet whether the way AI data centers function has created a structural change in the useful life of an Nvidia GPU. It's just too early to tell. Whether the banks are right or not will have a huge impact on some of the most popular AI stocks in the market.
How it could impact the major AI stocks If the banks want better guarantees, Nvidia or its customers will have to provide them. The Reuters article indicates there are already tens of billions of dollars in loans in the pipeline with stronger guarantees than were originally outlined in Nvidia's August announcement. Those guarantees could come from Nvidia itself, which would require it to maintain capital reserves, or from the revenue streams of investment-grade technology companies such as Microsoft, Alphabet, Amazon, or Meta Platforms.
Nvidia is reportedly in talks with insurance companies to hand off some of the financing risk tied to these loans in case a borrower defaults and the value of the GPUs fails to cover the debt. That could add to the cost of Nvidia's financing plans, however. The coverage is specifically aimed at neocloud companies like CoreWeave and Nebius.
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It's important to note that if a neocloud defaults, it will likely be in part because the Nvidia GPUs powering its data centers aren't worth as much as originally anticipated. The counterargument to the fact that neoclouds are raising prices is that we're currently in the midst of a severe shortage of AI compute. That has pushed prices higher for what's essentially a commodity product. When the market reaches equilibrium, prices for compute will begin to decline.
In other words, today's higher prices aren't a reflection of the increased durability of Nvidia GPUs, but rather a reflection of AI developers' desperation to get their hands on any available compute.
The hyperscalers don't carry nearly as much risk, but if AI chips' useful lives prove shorter than expected, it will negatively impact their return on invested capital. The good news is that Amazon reports it will break even on its AI accelerator chips within three years, and Alphabet says its breakeven time is just two years.
These days, both hyperscalers are installing more of their own custom AI accelerators than Nvidia GPUs, and those application-specific chips have even shorter payback periods. While GPUs can still generate positive returns on investment, they might not be the massive returns currently projected.
Shares of Nvidia (NVDA +0.14%) ended Monday, Oct. 5, at $238.90, a fresh record close. At that price, the artificial intelligence (AI) chip giant is worth around $5.8 trillion -- about 4% shy of $6 trillion, a level no company has ever hit.
Milestones like this usually make headlines. But I don't think they say much about what a stock does next.
Five times, a company has become the first in the U.S. to reach a new trillion-dollar level: Apple (AAPL +0.22%) at $1 trillion, $2 trillion and $3 trillion, and Nvidia at $4 trillion and $5 trillion. In the following 12 months (11 so far, for the last one), the stock's return ranged from a 31% loss to a 27% gain. And it beat the S&P 500 (^GSPC +0.58%) just twice.
What mattered more, every time, was what happened to earnings -- and to the price investors would pay for them.
Image source: Nvidia.
Apple's milestones went three different waysFor each one, I measured from the close on the day the stock first reached the milestone during trading, out to a year later.
Apple first crossed $1 trillion on Aug. 2, 2018. In the next 12 months, its shares fell around 2% but the S&P 500 gained about 4%. In early January 2019, Apple cut its revenue outlook for the December quarter to about $84 billion, saying iPhone upgrades came in lower than it expected.
The $2 trillion level, hit on Aug. 19, 2020, came just before a boom year for the business. Apple's earnings per share soared 71% for its fiscal 2021, which ended in late September 2021. Still, the stock's 27% rise in the next 12 months lagged the index's 31% return.
One reason is the price. Investors paid around 35 times earnings when Apple touched $2 trillion, and about 29 times earnings a year later.
Then came $3 trillion, on Jan. 3, 2022. Apple's earnings per share still rose 9% for fiscal 2022. But its price-to-earnings ratio dropped from around 32 to about 20 over the next year, and the stock lost 31%. The S&P 500 fell 20% over the same stretch.
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Nvidia's business outran its stockNvidia's own milestones have gone better so far. It first hit $4 trillion on July 9, 2025, and its shares rose around 25% in the next year, ahead of the S&P 500's 20% gain.
Since first crossing $5 trillion on Oct. 29, 2025, the stock is up around 15% as of this writing, again a bit ahead of the index in those 11 months.
But the business did much more of the climbing. Showing how fast Nvidia grew after its $4 trillion day, revenue in the fiscal second quarter of 2027, which ended July 26, 2026, rose 106% year over year to $96.2 billion. Growth was 85% the quarter before, so the pace sped up.
Non-GAAP (adjusted) earnings per share grew even faster, rising 120% to $2.22.
Put another way, the shares gained a fraction of what earnings did, because investors paid less for each dollar of those earnings. This happened after all five milestones. Every time, the stock's price-to-earnings ratio was lower a year later than when it crossed the line (11 months later, for Nvidia's $5 trillion mark).
What decided each return was how fast earnings rose to make up for it.
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What drives the stock from here?Nvidia's earnings look set to keep growing quickly, at least for now. Management expects revenue of around $108 billion in the fiscal third quarter, give or take 2%. This would be almost 90% more than the $57.0 billion Nvidia brought in during the same quarter a year before -- still impressive, but slower than last quarter's rate.
Investors arguably aren't paying much for that growth. Shares trade at around 15 times expected earnings for fiscal 2028 (which ends in January 2028), using analysts' consensus estimate. For a company whose earnings per share more than doubled last quarter, that price looks low to me.
Of course, over 90% of Nvidia's revenue last quarter came from its data center business, which depends on how much customers spend building out AI. A cut in this spending could slow Nvidia's earnings quickly. If this happens as its price-to-earnings multiple keeps shrinking, the stock could see a year like Apple's after $3 trillion.
In the end, I wouldn't make much of $6 trillion, if and when Nvidia gets there. As long as its earnings keep rising faster than its valuation multiple shrinks, the stock can keep climbing. At this price, I think the odds favor that result for now.
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Nvidia (NVDA +0.14%) set a new intraday all-time high on Tuesday at $243.37 per share.
Last Friday, the stock topped its previous record set on May 14, and has continued to climb from there, notching its fifth straight gain on Tuesday.
In recent days, Nvidia has been buoyed by positive macro news, including a cooler-than-expected PCE inflation report and a weak employment report, which both make future Fed rate hikes less likely. While there's been relatively little news out on Nvidia, the general news about AI remains overwhelmingly positive. Anthropic is headed toward an IPO next month that is expected to value the company at $2 trillion. Marvell just wowed investors at its Investor Day conference after raising its 2028 revenue outlook to $20 billion, indicating strong demand for chips, and SpaceX, its close partner, has gained on several recent achievements, including sending Starship into low Earth orbit for the first time, where it deployed Starlink satellites.
The rally helped push the S&P 500 and Nasdaq Composite to all-time highs as well. Nvidia remains the most valuable company in the world with a market cap of $5.8 trillion now.
However, the stock is volatile and has experienced multiple pullbacks even during its surge in the AI boom. Is the stock still a buy? Here's what investors need to know.
Image source: Nvidia.
Nvidia looks cheap compared to its peersNvidia now trades at a price-to-earnings ratio of 30, which is naturally more expensive than it's been in recent weeks, but also still a reasonable price compared to its peers and the S&P 500, which trades at a P/E ratio of 25, and is growing much more slowly than Nvidia.
Meanwhile, chip stock peers like AMD, Intel, and Broadcom, which have soared on AI tailwinds lately, are all significantly more expensive than Nvidia, trading at P/E ratios of 166, 103 (adjusted), and 48, respectively.
The difference between those stocks and Nvidia is that they have largely jumped on potential AI gains, while Nvidia has already delivered those results and is poised to continue delivering strong growth.
Currently, Wall Street expects revenue to jump 67% to $687 billion next year (fiscal 2028), with adjusted earnings per share of $15.80. Those numbers have trended higher, and they could continue to go up. Based on the 2028 EPS forecast, Nvidia is trading at just 15 times earnings, which is undoubtedly cheap.
Will the law of large numbers get in the way?Perhaps, the best reason not to buy Nvidia at this point is that the law of large numbers is likely to restrain its growth, at least at some point. Right now, Nvidia is about 20% more valuable than the #2 company, Apple.
A $10 trillion valuation for Nvidia, but that would mean a gain of 72%. That's nothing to sneer at, but Nvidia can't be the kind of multi-bagging stock at this valuation that it was a few years ago.
Additionally, the bigger the company gets, the more it has to defend its market share from challengers like AMD and Intel, and even its own customers like Amazon and Google that are developing their own chips. Thus far, Nvidia has remained the dominant provider of data center GPUs, but its monopoly is not guaranteed.
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Despite those risks, the company remains in the driver's seat in the AI boom, and its valuation seems to underestimate its future growth.
While its growth rate will moderate at some point, its valuation offers investors an attractive margin of safety, and Nvidia is well-positioned to capitalize on the future growth of AI.
Compared to its peers, the stock looks undervalued and remains a strong buy.
Jeremy Bowman has positions in Advanced Micro Devices, Amazon, Broadcom, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Apple, Broadcom, Intel, Marvell Technology, and Nvidia. The Motley Fool has a disclosure policy.
Comparing State Street Technology Select Sector SPDR ETF (XLK +0.53%) against iShares U.S. Technology ETF (IYW +0.35%) reveals a significant gap in expense ratios and a choice between 78 or 154 holdings.
Both funds offer heavy exposure to the dominant players in the U.S. technology sector, serving as foundational tools for investors seeking long-term growth. While they share several top holdings, the differences in their tracking indexes -- one following a capped Russell 1000 index and the other focusing strictly on S&P 500 technology components -- result in varying levels of concentration. With billions of dollars in assets under management (AUM), these ETFs provide highly liquid access to the engines of the modern economy.
Snapshot (cost & size)MetricIYWXLKIssueriSharesSPDRShare price$273.30 (as of 2026-10-06)$202.50 (as of 2026-10-06)Expense ratio0.37%0.08%1-yr return (as of 2026-10-06)37.7%41.2%Dividend yield0.1%0.4%Beta1.351.36AUM$27.2 billion$131.1 billionBeta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The State Street fund is considerably more affordable, with an expense ratio of 0.08%, significantly lower than the 0.37% fee charged by the iShares fund. For investors with significant capital, this 0.29 percentage point gap can lead to substantial differences in net performance over several decades. Furthermore, the State Street fund currently offers a higher payout to shareholders, with a yield gap of 0.32 percentage points compared to the iShares fund yield.
Performance & risk comparisonMetricIYWXLKMax drawdown (5 yr)(39.4%)(33.6%)Growth of $1,000 over 5 years (total return)$2,692$2,759State Street Technology Select Sector SPDR ETF replicates the performance of the Technology Select Sector Index, providing concentrated exposure by holding 78 stocks in a portfolio that is 100% focused on technology. Its largest positions include Nvidia(NVDA +0.14%) at 15.5%, Apple(AAPL +0.22%) at 13.4%, and Microsoft(MSFT +0.78%) at 10.5%. Launched in 1998, it is a staple for those seeking pure-play exposure to the largest tech firms in the S&P 500. State Street Technology Select Sector SPDR ETF has paid $0.83 per share over the trailing 12 months, which, on its recent $202.50 share price, works out to a 0.4% yield.
The iShares U.S. Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, which results in a broader reach of 154 holdings and a different weighting scheme. While its sector breakdown is not reported, its largest holdings include Nvidia at 17.2%, Apple at 15.2%, and Microsoft at 12.1%. It was launched in 2000 and provides exposure across the Russell 1000 index, capping larger positions to manage concentration risk. iShares U.S. Technology ETF has paid $0.25 per share over the trailing 12 months, which, on its recent $273.30 share price, works out to a 0.1% yield.
For more guidance on ETF investing, check out the full guide at this link.
Image source: Getty Images.
Which looks like the better buyI'm looking at two veterans here. The iShares fund was launched in the spring of 2000, 17 months after the SPDR ETF.
On total returns, these funds are close to interchangeable. XLK posted annualized total returns of 21.9% over the past five years, compared with 21.1% for IYW. Over 10 years, IYW comes out slightly ahead, 25.5% to 25.1%. Measured back to IYW's 2000 launch, dividend-adjusted gains come to roughly 1,100% for XLK and 1,050% for IYW. All of these long-term matchups are essentially ties.
With returns that close, the tiebreakers decide it, and XLK wins nearly all of those for me.
Cost is where the funds really separate. XLK charges 0.08% a year, or $8 per $10,000 invested; IYW charges 0.37%, or $37.XLK also yields 0.41% versus 0.09% for IYW, and much of that gap can be traced to fees, since expenses are deducted from dividend payouts.XLK is also far larger, with $131.1 billion in assets compared with IYW's $27.2 billion. As a result, the SPDR giant is slightly less volatile in the long run.The one thing XLK lacks is Alphabet (GOOG +0.22%) (GOOGL +0.35%) and Meta Platforms (META -0.41%), which the S&P index's sector rules moved out of tech in 2018. These Magnificent 7 stocks are technically Communication Services in this system. They belong to a different State Street ETF, namely the State Street Communication Services Select Sector SPDR ETF (XLC +0.04%).
You may see that as a benefit or a drawback for the XLK fund, depending on how heavily you want to focus on the AI boom. Anyone holding an S&P 500 index fund already owns both companies, and XLK avoids doubling up on them. That's another tiny benefit in my book.
Nvidia's New Record High Reveals a Massive ETF Betting Frenzy Summary
Nearly 900 ETFs have exposure to Nvidia, with some funds allocating more than 20% of their portfolios to the chipmaker
Nvidia (NVDA) is becoming an even bigger influence across the ETF market as its shares climb to new highs. The stock rose 1.5% in morning trading Tuesday reaching a record level at $242.5.
The chipmaker was held by 896 ETFs, with those funds collectively owning roughly 3.8 billion shares. That widespread exposure means movements in Nvidia can affect returns across funds covering areas far beyond the semiconductor industry.
Some ETFs have made the stock a particularly large part of their portfolios. FT Vest NVDA & Target Income ETF had Nvidia at 49.59% of assets, while GraniteShares 2x Long NVDA Daily ETF allocated 35.83% and Direxion Daily NVDA Bull 2X Shares held 27.94%.
Nvidia also represented more than 20% of several other products, including Strive U.S. Semiconductor ETF at 21.67% and Global X PureCap MSCI Information Technology ETF at 20.2%. VanEck Semiconductor ETF had a 19.28% allocation, while Vanguard Information Technology ETF stood at 17.73%.
The concentration extends into growth-focused funds as well. T. Rowe Price Blue Chip Growth ETF and Fidelity Fundamental Large Cap Growth ETF each had Nvidia accounting for more than 17% of their portfolios.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
An NVIDIA logo appears in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
Oct 6 (Reuters) - Nvidia-backed cloud-computing company Lambda is raising up to $4 billion at a pre-money valuation of $14.5 billion in what would be its final funding round before a planned initial public offering, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
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Investment firms Blackstone (BX.N), opens new tab and Coatue Management are leading the round, the report said.
Lambda is aiming to go public in 2027, depending on execution and market conditions, according to a letter to the company's limited partners reviewed by the Journal.
The company's backlog of unfilled orders grew to $50 billion in September from $15 billion in June, according to the letter.
Lambda did not immediately respond to a Reuters request for comment.
Reporting by Anzar Mehraj in Bengaluru; Editing by Tasim Zahid
Our Standards: The Thomson Reuters Trust Principles., opens new tab
SummaryNvidia is poised for continued growth as AI infrastructure demand broadens amid the agentic shift, while alternative financing mitigates capital constraints ahead of surging interest rates.The company's prescient development of alternative financing structures, including plans to mobilize $500 billion in third-party funding for AI infrastructure, has positioned it ahead of today's tightening capital backdrop.These structures are becoming increasingly critical as monetary and financial conditions tighten, expanding NVDA customers' access to capital needed to sustain demand-driven AI infrastructure investments despite weakening FCF profiles.By mitigating rising capital costs and preserving the conversion of resilient compute demand into deployed capacity, NVDA reinforces visibility into further earnings upside that remains significantly underappreciated at current levels. Robert Way/iStock Editorial via Getty Images
Recent agentic developments prove NVIDIA Corporation’s (NVDA) next demand driver has less to do with sourcing new workloads for its infrastructure, but more to do with ensuring customers have sufficient financing to deploy
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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In the past week, Advanced Micro Devices and Nvidia both closed at all-time highs. That sounds like a single story.
It isn't.
Nvidia's record was its first since May — the end of a five-month stretch in which the company that defined the AI trade watched its own sector run past it. AMD's close capped a run in which the stock has risen nearly 200% year to date and crossed a $1 trillion market capitalization, becoming only the fourth U.S. chipmaker to do so.
Nvidia is up roughly 28% in 2026. Both stocks are at records. Understanding why those two paths converged this month tells you more about where the AI trade stands than either stock does alone.
AMD: The Orders Became RealAMD's rally is not sentiment. It is backed by contracts.
The anchor is OpenAI, which committed to a six-gigawatt MI450 deployment and holds warrants for up to 160 million AMD shares tied to that rollout. Oracle followed with a commitment for 50,000 MI450 GPUs beginning in the third quarter. Those are the two orders that changed the conversation, because they established something the market had doubted for years: that a hyperscaler AI buildout can be architected around someone other than Nvidia.
The financials are catching up quickly. Second-quarter revenue hit a record $11.5 billion, with data center sales of $6.7 billion — 58% of the total and up more than 100% year over year. Diluted earnings rose roughly 82%. AMD (AMD - Free Report) also closed an $8.2 billion acquisition of World Labs, extending its reach further up the AI stack.
Nvidia: Capital Returns and a Laggard Catching UpNvidia's (NVDA - Free Report) catalyst was different in kind. In September, the board authorized an additional $150 billion for share repurchases — the largest single increase to a buyback program in corporate history, surpassing Apple's $110 billion authorization in 2024 — lifting remaining capacity to $235 billion through fiscal 2028. The increase alone exceeds the entire market value of about 84% of S&P 500 companies.
The timing matters. Management authorized that at a moment when Nvidia traded near its lowest earnings multiple in more than a decade. Buying back stock when your own multiple has compressed is the clearest signal a management team can send about perceived value.
And the supporting data helped. Foxconn, a critical assembler of Nvidia's server systems, posted its strongest month on record. And the company's second quarter was extraordinary on its own terms: revenue of $96.2 billion, up 106%, with Data Center revenue of $89.0 billion representing 92% of the business and gross margin holding at 75%.
The Q3 SetupsBoth report within two weeks of each other, and the projections are instructive.
AMD, which sports a Zacks Rank #3 (Hold) at the moment, is set to report quarterly results on November 3rd. Management guided third-quarter revenue to approximately $13 billion, plus or minus $300 million — roughly 41% year-over-year growth and 13% sequential — with non-GAAP gross margin near 56%. Consensus sits at $1.90 per share on $13.06 billion, slightly above the guidance midpoint. Notably, that guidance came in above the prior Street consensus of $12.5 billion, which is the kind of detail that marks a genuine inflection rather than a beat-and-lower cycle.
Meanwhile, Nvidia garners a Zacks Rank #1 (Strong Buy) and reports in mid-November. Management guided third-quarter revenue to $108.0 billion, plus or minus 2%, and consensus has since converged near $2.47 per share on roughly $109.2 billion. Against a year-ago quarter of $1.30 per share, that implies earnings growth near 90%.
Two things stand out. First, the sequential step in Nvidia's revenue — roughly $11.8 billion added in a single quarter — is nearly as much as AMD's entire quarterly revenue base. Scale matters. Second, Nvidia's guidance assumes no Data Center revenue from China whatsoever, meaning any resumption is upside that no model currently carries.
Bottom LineThe most useful signal in this rally is which stock lagged. Nvidia spent most of 2026 as the underperformer while capital rotated into AMD, Intel, Arm and the memory names.
Its return to record territory on a buyback rather than a product announcement suggests the market is finally repricing the leader on earnings rather than narrative. And if AMD confirms that its data center momentum is durable and Nvidia guides the January quarter above consensus, the group likely has further to run.
Buy Nvidia (NVDA). The article points to accelerating fundamentals: record buyback, stronger revenue outlook, and analysts pushing growth visibility through 2028. With NVDA near $243 and a $6T milestone in sight, momentum plus earnings power supports another leg higher as investors keep repricing AI infrastructure returns.
Key Risk: AI capex slows faster than expected, cutting Nvidia’s growth and forcing a valuation reset.
S&P 500 buy via NVDA beta
Buy the Invesco QQQ Trust (QQQ) (or SPDR S&P 500 ETF, SPY). NVDA is the largest contributor to the S&P 500’s gains in 2026; if NVDA keeps running, index-level flows tend to follow, lifting the whole mega-cap complex even if other stocks lag.
Key Risk: A broad market risk-off move (rates spike or earnings disappoint elsewhere) overwhelms NVDA-specific strength.
Nvidia NVDA shares rose as much as 1.9% in early trading Tuesday, hitting another all-time high at $243.37.
The stock has gained roughly 28% this year, adding about $1.3 trillion to Nvidia’s market capitalization and taking its value to just below $5.8 trillion.
That puts Nvidia within striking distance of becoming the first company to reach a $6 trillion market capitalization.
Nvidia has also become the largest contributor to the S&P 500’s roughly 14% gain in 2026, underscoring the chipmaker’s growing influence on the broader market.
The latest advance marks a sharp reversal from earlier in the year, when Nvidia shares were down 11% as of March 30.
At the time, investors were increasingly questioning whether the hundreds of billions of dollars being committed to AI infrastructure could generate sufficient returns.
Sentiment has since shifted as AI spending has continued and Nvidia has provided a stronger revenue outlook.
The company has also announced a record buyback program, giving investors another reason to reassess the stock.
The combination of strong expected earnings growth and a valuation that remains relatively low compared with Nvidia’s historical levels has helped support the latest rally.
Cantor Fitzgerald reiterated an 'Overweight' rating and a $350 price target on Nvidia following a recent non-deal roadshow.
The firm said consensus estimates remain too low and expects Nvidia to deliver another strong year of growth extending into 2028.
Cantor also expects Nvidia to increase its share of overall revenue across 2027 and 2028, describing the stock as positioned for a potential catch-up trade.
The view reflects expectations that AI infrastructure spending will remain elevated even as investors increasingly debate the sustainability of the current investment cycle.
Earlier this week, BNP Paribas raised its price target to $345 from $285, citing Nvidia’s broad portfolio spanning AI hardware, CUDA software and networking products.
BNP Paribas expects Nvidia to maintain its leading position in AI computing as workloads increasingly shift toward inference, the process of running AI models after they have been trained.
That transition could broaden demand beyond the initial wave of spending on model training infrastructure.
The brokerage also expects Nvidia to maintain gross margins above 70% despite increasing competition from custom chips and other semiconductor companies.
Nvidia’s latest rally has brought the company within roughly $200 billion of the $6 trillion valuation threshold.
The milestone would further extend Nvidia’s lead as the largest company in the S&P 500 and reinforce its role as one of the biggest drivers of US equity-market performance.
The stock’s gains also come despite a challenging macroeconomic backdrop, suggesting investors remain focused on the company’s earnings growth and the durability of AI infrastructure demand.
Nvidia Corporation (NASDAQ:NVDA) CEO and co-founder Jensen Huang says he doesn’t look at his company’s stock chart daily, but the billionaire may want to take a peek this week.
Nvidia stock closed up 2.1% to $238.90 on Monday, with the chip stock hitting a new all-time high of $240.10 during intraday trading.
The surge for Nvidia stock helped boost the net worth of Huang, who owns an estimated 3.3% of the company.
Huang is now the world’s seventh-richest person, worth $198 billion, according to Bloomberg. Huang added $4.05 billion to his net worth on Monday, the third-highest total. Huang’s one-day gain Monday trailed only Elon Musk (+$65.4 billion) and Mark Zuckerberg (+$4.78 billion).
In 2026, Huang has added $34.8 billion to his net worth, up around 21.4%. This ranks as the seventh-biggest year-over-year net worth add by dollars on the Bloomberg Billionaires Index.
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Huang’s Net Worth ChangeHuang’s net worth could continue to soar in 2026 as Nvidia announces a new share buyback plan and nears a highly anticipated quarterly earnings report expected next month.
So far, the $34.8 billion gain in 2026 is one of the largest and comes close to Huang’s 2025 gains.
In 2025, Huang finished the year ranked ninth richest in the world with a net worth of $154 billion. Last year, Huang gained $40.1 billion in net worth as Nvidia stock increased.
Huang finished 2024 ranked as the world’s 12th-richest person.
Now a regular among the top ten richest people in the world, the gains in Nvidia stock in recent years have helped make Huang one of the wealthiest people worldwide.
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One chipmaker's market value has grown so large it now swallows three of the biggest names in tech whole, and the financial engine driving that dominance shows no sign of slowing down.
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NVIDIA’s $5.841 Trillion Valuation Outweighs Three Tech Giants NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) carried a market value of $5.841 trillion as of 11:33 a.m. ET on October 6, 2026. That one figure is larger than Meta Platforms (NASDAQ:META) at $1.636 trillion, Amazon (NASDAQ:AMZN) at $2.754 trillion and AMD (NASDAQ:AMD) at $1.073 trillion put together. Those three companies add up to $5.463 trillion, which leaves NVIDIA ahead by $0.378 trillion. This is a live market value, so it goes with the share price. It is not a figure from an earnings report.
What the Valuation Says About NVIDIA’s Business NVIDIA’s profits back up the valuation. In the second quarter of fiscal 2027, reported August 26, 2026, revenue reached $96.22 billion, up 105.85% year over year. That beat the $92.07 billion consensus. Non-GAAP EPS of $2.22 also beat expectations of $2.0887. That was the company’s fifth consecutive beat.
Net income was $59.69 billion, up 125.9%. In the same quarter, Meta made $15.8 billion in net income, and Amazon’s operating income worldwide was $27.5 billion. NVIDIA’s operating income was $63.73 billion, more than either of those figures.
The engine is data center sales. That division brought in $89.02 billion, up 117%. Networking alone grew 138% to $40.31 billion. Non-GAAP gross margin expanded to 75.0% from 72.5% a year earlier. Management said revenue growth “accelerated for the fourth consecutive quarter.”
Chief Executive Jensen Huang summed it up: “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.”
Market Reaction NVIDIA shares are rising 1.2% in today’s session, from $238.90 to $241.77. The stock is up 29.94% year to date and 5.64% over the past week. The S&P 500 is hitting a record high today as Nvidia neared the $6 trillion milestone.
Over five years, shareholders have made 1073.09%. AMD has gained more this year, rising 206.48%, but NVIDIA is still worth more than AMD, Meta, and Amazon combined.
Bull Case The outlook points to more growth. NVIDIA guided third-quarter revenue to $108.0 billion, plus or minus 2%, with a gross margin near 74.0%. Management’s early forecast calls for revenue growth of approximately 70% in fiscal 2028. It called that a supply-limited number and said, “At this moment, we have supply for 70%. Our demand is much higher than that.”
Each new chip generation made more per unit of data center power. Management put revenue per gigawatt at about $18 billion for Hopper, $25 billion for Blackwell and $40 billion for Vera Rubin. Vera Rubin is now in full production, and NVIDIA said it has orders from every major hyperscaler, AI cloud, and system OEM.
The balance sheet supports cash returns to shareholders. Debt-to-equity is 0.073. NVIDIA returned about $26 billion in the second quarter through buybacks and dividends, and about $99 billion remains under its buyback authorization. Analysts are firmly positive: 10 rate the stock a strong buy and 48 a buy, against 1 sell. The average price target is $328.72.
There are real risks. Management expects margins to bottom in the fourth quarter in the 71% to 72% range because memory prices are rising sharply. The outlook includes no data center revenue from China. Amazon is also pushing its own Trainium chips. Even so, Amazon’s chief executive said customers “will run on NVIDIA for as long as we can foresee.”
Bottom Line NVIDIA’s $5.841 trillion market value is supported by quarterly profits larger than Meta’s and Amazon’s, demand that exceeds what the company can supply, and a new chip platform that made more per gigawatt. Investors will be watching whether NVIDIA delivers on its $108.0 billion third-quarter guidance, with Vera Rubin expected to make up about 20% of data center revenue. If NVIDIA continues made more than these rivals, the stock market will likely continues pricing it above all three combined.
Contact [email protected] for any questions or corrections.
Artificial intelligence (AI) has created some enormous multibaggers for investors, but none are quite on the same level as Nvidia (NVDA +0.68%). When ChatGPT helped ignite the generative AI boom in late 2022, Nvidia was worth less than $400 billion. Today, the chipmaker's market capitalization has ballooned to roughly $5.6 trillion -- making it the most valuable company in the world.
NVDA Market Cap data by YCharts
This parabolic ascent shows how Nvidia evolved from a generic semiconductor company known for gaming GPUs into the undisputed king of AI infrastructure. Let's assess what might happen if you invested $500 in Nvidia every month from now through the end of 2030. Spoiler alert: Big gains could be in store.
How big can Nvidia get? Before crunching any numbers, I need to come up with a baseline of where Nvidia might be headed over the next several years. The company generated $96.2 billion in revenue during its most recent quarter, representing a staggering 106% increase from the prior year. Even more impressive, Nvidia's data center business generated $89 billion, growing 117% year over year.
The next chapter is already quietly unfolding. Nvidia's Vera Rubin architecture is moving into full production. The company says the platform can deliver 10x the agentic AI throughput of its previous generation Grace Blackwell architecture. This matters because AI spending is moving beyond simply training large language models (LLMs). Reasoning models, AI agents, robotics, and other inference workloads require enormous amounts of continuous computing power.
Meanwhile, infrastructure commitments from big tech are getting larger. The big five hyperscalers -- Amazon, Alphabet, Microsoft, Meta Platforms, and Oracle -- plan to spend approximately $800 billion in capital expenditures (capex) in 2026 alone and roughly $1.3 trillion in 2027. Meanwhile, Anthropic has reportedly committed at least $518 billion to AI infrastructure over the next decade.
Nvidia is also expanding how it can monetize data centers. The company isn't merely selling GPUs anymore. AI factories now combine GPUs with other solutions from Nvidia, including CPUs, NVLink, networking, BlueField data processing units, storage infrastructure, and software platforms like CUDA.
I think complementing the legacy GPU business with adjacent solutions should help Nvidia expand its market share in the data center realm. Against this backdrop, I think the company can rise from a $5.6 trillion market value today to $15 trillion by 2030.
Image source: Nvidia.
What investing $500 a month in Nvidia looks like An investor putting $500 into Nvidia every month would invest $6,000 over the course of a full year. Assuming the strategy begins in October 2026 and continues through December 2030, the contributions would total $25,500.
Unfortunately, calculating the ending value isn't as simple as multiplying $25,500 by Nvidia's expected return. The reason is because you will be using a dollar-cost averaging strategy over the lifetime of the investment. This means the initial $500 invested in October 2026 has more than four years to appreciate, while a $500 investment made near the end of 2030 has almost no time to compound.
If I assume Nvidia's market capitalization rises gradually from $5.6 trillion to $15 trillion by the end of 2030, that works out to a 163% cumulative increase, or roughly 26% annualized or 1.9% per month when compounded. While this is a bit aggressive, I think it is also a reasonable upside scenario considering it's nowhere near the returns Nvidia generated during earlier stages of the AI boom.
If I run the calculated return across all 51 monthly investments, the $25,500 investment could finish 2030 worth approximately $43,400. That represents roughly $17,900 in investment gains, or 70% upside.
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Remember to think long-term Obviously, no one knows what Nvidia will be worth four years from now. If the company reaches a $10 trillion valuation by the end of 2030, the same $500 per month strategy would grow to roughly $34,400. If the AI infrastructure supercycle sends Nvidia all the way to $20 trillion, the investment could approach $51,600 -- nearly a 100% gain.
The first takeaway here is that Nvidia has enough structural tailwinds to support meaningful share price appreciation over the next several years. The second takeaway is to understand is that my estimates assume Nvidia's share price generally follows a smooth, compounded path toward the 2030 target.
In reality, the stock's movement will almost certainly be messier. This means the price could rise or fall significantly from month to month. That's actually the entire point of dollar-cost averaging: rather than trying to time the market and predict exactly when Nvidia's stock will rise or fall, investors consistently put the same amount of money to work. For someone investing consistently every month, patience will ultimately matter just as much as finding the right opportunities.
Key Takeaways NVIDIA's $5.78 trillion market cap is nearing $6 trillion after a fresh all-time high.NVIDIA's record buyback and 106% revenue growth underscore its strong AI-driven momentum.ETFs like SHOC and XLK offer heavy NVIDIA exposure while diversifying across tech and semiconductors. NVIDIA (NVDA - Free Report) has once again captured the market's attention, with its stock surging to a fresh all-time intraday high of $239.86 on Monday, pushing its market capitalization to an estimated $5.78 trillion. This rally follows a period of seven weeks of sideways trading, broken decisively by a combination of factors including the company's announcement of a record $150 billion increase to its share buyback authorization, raising its total repurchase capacity to an impressive $235 billion through fiscal 2028.
The buyback, described as the largest in corporate history, signals management's profound confidence in NVIDIA's long-term growth trajectory and the sustainability of the AI infrastructure boom.
As the world's most valuable publicly traded company inches closer to the unprecedented $6 trillion milestone, NVIDIA currently accounts for a staggering 11% of the Nasdaq Composite and 8% of the S&P 500 Index.
For ETF investors, these developments put the spotlight on the outsized role NVIDIA plays in countless portfolios, making the choice between single-stock exposure and a diversified fund approach more relevant than ever.
Before identifying those ETFs, let's examine NVIDIA's growth prospects for the future and why an ETF investment strategy may prove to be a more prudent approach than buying the stock itself.
Why NVIDIA's Growth Engine is Far from FinishedThe factors propelling NVIDIA toward the $6 trillion mark are deeply rooted in its fundamental performance and the broader trajectory of the AI industry.
NVIDIA delivered second-quarter fiscal 2027 revenues of $96.2 billion, a stunning 106% year-over-year increase, primarily driven by its Data Center segment, which witnessed year-over-year revenue growth of 117%.
NVIDIA’s accelerated computing platform remains central to AI training, inference and agentic workloads as customers scale model deployment. To this end, it is imperative to mention that during the fiscal second-quarter earnings call, NVDA’s management stated that its compute is fully utilized across every cloud it serves and expects fiscal 2028 revenues to grow about 70%, with supply constraints limiting growth below customer forecasts.
Meanwhile, NVIDIA is extending its opportunity beyond hardware through software, open models and platform tools to support enterprise deployment. With this aim in view, the company introduced an AI cloud model in the fiscal second quarter that can add revenue sharing from third-party customer usage after the initial infrastructure sale. In September, NVIDIA launched the NVIDIA Open Agent Safety Platform to directly address enterprise deployment challenges by focusing on software-driven AI governance and safety.
On the analyst front, the consensus is overwhelmingly bullish, with the highest price target on Wall Street standing at an ambitious $515. The average price target for NVIDIA sits at $326.07, based on short-term price targets offered by 47 analysts, which represents an upside of 36.5% from the last closing price of $238.90.
The Prudent Case for ETFs Over a Single StockWhile NVIDIA's individual prospects are compelling, the rationale for advocating ETFs over the stock itself lies in the broader industry dynamics and the principle of diversification. NVIDIA's dominance has lifted the entire semiconductor ecosystem, from foundries like Taiwan Semiconductor (TSM - Free Report) to equipment makers like ASML, and from memory specialists like Micron (MU - Free Report) to competitors like Advanced Micro Devices (AMD - Free Report) .
By investing in an ETF, particularly a semiconductor- or tech-focused one, investors can participate in the AI revolution while potentially reducing the impact of any single company's missteps or sector-specific headwinds.
This approach mitigates the idiosyncratic risks associated with a single company, such as competitive pressure from custom chips developed by major customers like Amazon and Google, or the inherent volatility of a stock that has already delivered massive gains.
NVIDIA-Heavy ETFs to BuyKeeping into account the aforementioned discussion, for those looking to capitalize on NVIDIA's momentum while maintaining a balanced exposure to the industry at large, the following ETFs represent compelling investment choices:
Strive U.S. Semiconductor ETF (SHOC - Free Report)
This fund, with net assets of $256.2 million, offers exposure to semiconductor companies. NVDA holds the top position in this fund, with a 21.98% weight. MU and Broadcom (AVGO - Free Report) hold the second and third spots in this fund, with 11.83% and 8.34% weightage, respectively.
SHOC has rallied 68.7% year to date and charges 40 basis points (bps) in fees. It traded at a volume of 0.01 million shares in the last trading session and sports a Zacks ETF Rank #1 (Strong Buy).
VanEck Semiconductor ETF (SMH - Free Report)
This fund, with net assets of $77.51 billion, offers exposure to 26 companies involved in semiconductor production and equipment. NVDA holds the top position in this fund, with a 19.14% weight. TSM and AMD hold the second and third spots in this fund, with 9.24% and 5.56% weightage, respectively.
SMH has surged 76% year to date and charges 35 bps in fees. It traded at a good volume of 3.49 million shares in the last trading session and sports a Zacks ETF Rank #1.
iShares U.S. Technology ETF (IYW - Free Report)
This fund, with net assets worth $27.17 billion, comprises 149 software, semiconductors, and tech hardware companies in the United States. NVDA holds the top position in this fund, with a 17.15% weight. Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) hold the second and third spots in this fund, with 15.17% and 12.10% weightage, respectively.
IYW has soared 36% year to date and charges 37 bps in fees. It traded at a volume of 0.46 million shares in the last trading session and sports a Zacks ETF Rank #1.
State Street Technology Select Sector SPDR ETF (XLK - Free Report)
This fund, with assets under management worth $131.1 billion, includes 74 companies from technology hardware, storage and peripherals; software; communications equipment; semiconductors and semiconductor equipment; IT services; and electronic equipment, instruments and components industries. NVDA holds the top position in this fund, with a 15.52% weight. AAPL and MSFT hold the second and third spots in this fund, with 13.35% and 10.54% weightage, respectively.
XLK has soared 39.6% year to date and charges 8 bps in fees. It traded at a good volume of 6.59 million shares in the last trading session and sports a Zacks ETF Rank #1.
Jensen Huang speaks in gigawatts and doubling demand while Satya Nadella speaks in seat counts and cost curves, but one of them is quietly funding his own customers to keep the story alive.
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NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) and Microsoft (NASDAQ:MSFT) just reported quarters built on AI. Their chief executives made different promises. Jensen Huang talks in gigawatts and doubling demand. Satya Nadella talks in seats, tokens and cost curves. NVIDIA sells the hardware and Microsoft is one of its biggest buyers, so each set of claims helps test the other.
Gigawatts Carry Huang. Copilot Seats Carry Nadella. NVIDIA posted revenue of $96.22B, up 105.8% year over year. Networking grew 138%, suggesting buyers want whole AI factories. Huang summed up his view: “Now, compute is revenue.”
At Microsoft, Azure grew 43% and Microsoft 365 Copilot passed 30 million paid seats. The earnings beat got help from a $3.2B gain on Anthropic.
Bold Claim Huang Nadella Headline Promise ~70% revenue growth in fiscal 2028 Azure growth of ~45% in constant currency next quarter Capacity Story Supply covers about 70% of demand Roughly double capacity in two years Weak Spot AI labs backed by NVIDIA’s balance sheet: roughly a quarter of next year’s business Backlog up only 25% excluding OpenAI Huang Funds His Demand. Nadella Hedges His Models. NVIDIA has committed nearly 50 billion in leading labs and offers take-or-pay guarantees to neoclouds. Management called this “circular financing.” Days sales outstanding extended to 60 days from 45, showing to longer payment terms for big buyers.
Nadella is building in options. Microsoft’s catalog holds more than 11,000 models, and its Maya 200 chip delivers 30% better performance per dollar. Customers outside leading labs generated nearly 90% of Microsoft Cloud revenue, which gives his demand claims a broad base.
Memory Costs and Cash Flow Will Decide This NVIDIA expects gross margins to bottom at 71% to 72% in Q4 as memory prices rise, so even the leader of this market faces cost pressure. Microsoft’s free cash flow fell 23% to $19.64B, and capex is heading toward approximately $175 billion. The key question is whether Vera Rubin makes about 20% of data center revenue in Q3 as expected.
Investors have sided with Huang so far. NVIDIA is up 28.4% year to date, while Microsoft is up 9.28%. The expansion underneath both names reaches well past chipmakers, something we mapped out covering the power, cooling and networking suppliers behind the AI factories, here.
Why I Trust Nadella’s Math a Bit More Right Now Huang has the better track record. NVIDIA beat EPS estimates most recently, with $2.22 against $2.09 expected. A growing share of his demand depends on money NVIDIA itself provides, which is weaker proof.
Nadella’s promises are smaller and easier to check: seat counts, Azure growth and margins expected to slip less than one point. With a P/E near 29 against NVIDIA’s 48, Microsoft’s valuation reflects steadier compounding expectations, while NVIDIA’s reflects higher growth expectations. My view would shift if NVIDIA delivers its Q3 guidance of $108B while relying less on financing it backs itself.
Contact [email protected] for any questions or corrections.
As the artificial intelligence (AI) boom matures, investors can choose between companies that design AI chips and those that supply the specialized machinery required to manufacture them. Is ASML Holding (ASML -0.93%) or Nvidia (NVDA +1.16%) the better play?
ASML is the world's only manufacturer of extreme ultraviolet (EUV) lithography systems, the machines used to produce leading-edge chips. Nvidia operates at the other end of the supply chain, designing graphics processing units (GPUs) that train and run AI models in data centers. Both offer a way to invest in AI stocks, though they are growing at very different rates.
The case for ASMLASML designs and manufactures the lithography systems that chipmakers use to print circuit patterns onto silicon wafers. It stands apart among semiconductor stocks because its EUV systems print the highly complex layers of advanced chips found in newer smartphones and AI hardware. The company sells to makers of both logic and memory chips, and its customer base is concentrated. Four customers accounted for about 61% of total net sales in 2025, according to its annual report.
ASML reports its results in euros, and the figures here are converted to U.S. dollars. In the fiscal year ended Dec. 31, 2025, revenue reached about $37.1 billion, up roughly 15.6% from the prior fiscal year. Net income totaled about $10.9 billion for the period, with a net margin of about 29.4%.
On its December 2025 balance sheet, prepared under U.S. GAAP, the debt-to-equity ratio was roughly 0.2x. That means total debt, including both short-term and long-term borrowings, was about a fifth of shareholder equity.
The current ratio, which measures the ability to pay short-term obligations with short-term assets, was roughly 1.3x, and free cash flow reached close to $12.1 billion.
The case for NvidiaNvidia designs GPUs and the software that runs on them, which together are used to train and deploy AI models. In its annual report for fiscal 2026, which ended on Jan. 25, 2026, the company noted that two customers accounted for approximately 22% and 14% of total revenue, respectively. This level of customer concentration adds risk, as losing one major buyer could hurt financial results.
In fiscal 2026, revenue reached close to $215.9 billion, up roughly 65.5% year over year. Net income followed suit, climbing to about $120.1 billion during the same period. That resulted in a net margin of about 55.6%, although net income included roughly $8.9 billion in net gains on equity securities.
On its January 2026 balance sheet, the debt-to-equity ratio was about 0.05x on a total-debt basis, indicating limited reliance on borrowed capital relative to equity. Nvidia has borrowed more since then, and its July 26, 2026, balance sheet shows about $33.4 billion of debt, or roughly 0.15x equity.
The current ratio at the end of fiscal 2026 was approximately 3.9x, indicating ample liquidity to cover near-term obligations. Free cash flow for fiscal 2026 was approximately $96.7 billion, representing the cash generated from operations minus capital expenditures.
Risk profile comparisonASML depends on a narrow supply chain. It relies on external vendors for components in its systems, and each component is obtained from a single supplier or a limited number of suppliers, according to its annual report.
Export controls also limit which systems the company can ship to customers in China, which accounted for about 29% of total net sales in 2025. In addition, ASML is bringing its next-generation High NA EUV systems to market, and research and development costs ran about 14% of total net sales in 2025.
Nvidia does not manufacture its own chips. It relies on foundries such as Taiwan Semiconductor Manufacturing (TSM -0.43%) to produce its wafers, and its annual report cites long manufacturing lead times and dependence on third-party suppliers as risks. Export controls have also been costly.
A U.S. license requirement on its H20 chips led to a $4.5 billion charge in the first quarter of fiscal 2026, and Nvidia said it was effectively foreclosed from China's data center compute market as of the end of that fiscal year.
Additionally, the company competes with large cloud companies such as Alphabet (GOOGL +0.08%) (GOOG -0.05%) and Amazon (AMZN +0.96%) that design their own AI hardware.
Valuation comparisonNvidia trades at a lower forward price-to-earnings (P/E) multiple even though its price-to-sales (P/S) ratio is higher.
MetricASMLNvidiaForward P/E28.9x24.4xP/S ratio16.4x18.0xValuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
The forward P/E compares the stock price to future earnings estimates, while the P/S ratio measures the stock price against sales over the past 12 months.
Nvidia looks like the better buy to me in 2026, with a caveat that applies to both stocks. Each depends on the same wave of AI data center spending, so I'd own either only as part of a diversified portfolio held for five years or more.
Nvidia is growing faster and trades at a lower multiple of expected earnings. Revenue more than doubled year over year in its fiscal 2027 second quarter, which ended July 26, 2026.
Management then guided for about $108 billion in the fiscal third quarter without assuming any data center compute revenue from China. On Sept. 28, the company added $150 billion to its share repurchase authorization, which says a good deal about the cash this business generates.
The risk is concentration. Two customers accounted for more than a third of fiscal 2026 revenue, and large cloud companies are designing their own AI chips.
ASML deserves more than a passing mention. In July, management raised its 2026 sales outlook to a range roughly a third above its 2025 total, and it plans to add EUV capacity for 2027. Its machines are used to make leading-edge chips, regardless of who designs them, giving ASML a stake in AI's growth even if Nvidia's rivals gain ground.
The shares have gained more than 80% over the past year, though, and the higher earnings multiple appears to reflect much of that strength. For investors who already own Nvidia, ASML still looks like a worthy long-term holding.
The Fed just pushed rates higher and the 10-year Treasury sits above 5%, conditions that typically punish growth stocks hard. NVIDIA may be built differently enough that the standard playbook simply does not apply.
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I took a fresh look at NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) the week the Fed raised rates. The Fed lifted the upper bound of its target range to 4.00% from 3.75%, and the 10-year Treasury yield trades at 5.28%. Standard theory says that combination should hurt a growth stock. I think NVIDIA is unusual enough that a quarter-point hike barely touches the business.
Why NVIDIA Sells the Scarcest Input in AI NVIDIA sells the rarest input in the economy: AI compute. Its customers buy that compute because it makes them money. The CEO put it simply: “Now, compute is revenue.” Management said it had supply for roughly 70% of demand and added that it had heard “return on investment capital is now less than a year” on $50 billion data centers. When a facility pays for itself that fast, a slightly higher borrowing cost gives the buyer little reason to cancel the order.
Three Receipts Behind My Conviction Growth remains rapid. Q2 fiscal 2027 revenue reached $96.22 billion, up 105.8%, and Data Center revenue grew 117%. Guidance calls for $108.0 billion next quarter, and management expects fiscal 2028 revenue to grow about 70%.
The balance sheet shrugs off higher rates. Rising rates hurt borrowers. NVIDIA carries a debt-to-equity ratio of 0.0726 and covers its interest 503.4x. It produced $21.34 billion of free cash flow last quarter and returned about $26.0 billion to shareholders.
Execution stays consistent. NVIDIA has beaten EPS and revenue estimates for six straight quarters, and quarterly EPS rose from $0.81 to $2.22 across that stretch.
How AMD and Broadcom Stack Up Against NVIDIA Advanced Micro Devices (NASDAQ:AMD) grew revenue 50.1% to $11.54 billion last quarter, a solid result. Its net profit margin, though, is 12.5%, against 55.60% at NVIDIA, and it trades at about 238 times earnings versus 48 for NVIDIA. NVIDIA pairs the higher margin with the cheaper multiple.
Broadcom (NASDAQ:AVGO) pays a $0.65 quarterly dividend, which income investors will like. Its revenue grew 85.5%, slower than NVIDIA’s, and Broadcom lists its debt as a risk factor, with $88.46 billion of liabilities against $99.69 billion of equity. NVIDIA carries $91.29 billion of liabilities against $228.98 billion of equity. In a rising-rate world, NVIDIA holds the cleaner balance sheet.
Risk That Keeps Me Disciplined NVIDIA’s supply commitments have rose to $279.0 billion, its guarantees for partners are capped at $108.5 billion, and days sales outstanding stretched to 60 days from 45. Higher rates could squeeze the leveraged neoclouds that buy its systems, and that would leave NVIDIA holding those commitments. I take that seriously.
The offset is that NVIDIA has partnered with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR on platforms expected to raise over $500 billion in long-term capital. Top hyperscaler capex is projected near $800 billion in 2026 and $1.3 trillion in 2027, and management expects supply to stay the constraint through fiscal 2028. All that spending has to be powered, cooled, and networked by somebody other than NVIDIA, and we rounded up seven of those suppliers in a free AI infrastructure report.
What Could Keep NVIDIA Ahead of Rising Rates Each new product generation makes more per gigawatt: about $18 billion for Hopper, $25 billion for Blackwell and $40 billion for Vera Rubin, which is now in full production. The stock has also risen 28.4% year to date. The Fed sets the price of money, NVIDIA sets the price of compute, and so far compute is winning.
Contact [email protected] for any questions or corrections.
A $10,000 bet on Nvidia a decade ago quietly became a life-changing sum, but with a $5.57 trillion market cap, the same math no longer applies the same way. Here is how much runway our model still sees.
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Ten years ago, NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) traded at a split-adjusted $1.68. At the September 30, 2026 close it stood at $228.38. That is a gain of 13,499.21%, enough to turn $10,000 into $1,359,921.
Doing that again from a market cap of about $5.57 trillion is a much bigger ask, so the useful question is how much growth is still left.
The 24/7 Wall St. price target for NVIDIA is $271.01 over the next 12 months. That works out to 17.49% upside, with high confidence.
Metric Value Current Price $230.66 Price Target from 24/7 Wall St. $271.01 Upside/Downside 17.49% Recommendation BUY Confidence Level 90% Our model rates the stock a buy, and the reason is earnings momentum. NVIDIA has beaten EPS estimates for the 5th straight quarter. Over the past 30 days, analysts have raised the fiscal 2028 EPS consensus from $13.1277 to $15.6826.
Vera Rubin Ramp Pushes NVIDIA Toward Its 52-Week High The stock is up 2.33% over the past week, 4.64% over the past month and 24.02% year to date. It sits 2.2% below its 52-week high of $236 and 40.8% off its low of $163.9.
Fiscal Q2 revenue came in at $96.22 billion, up 105.8% and ahead of the $92.07 billion consensus. EPS of $2.22 exceeded the $2.09 estimate. Q3 guidance calls for $108 billion. NVIDIA also returned $26 billion to shareholders and has $99 billion left on its buyback authorization, and the repurchases are drawing mainstream attention.
Why Bulls See $316 or More The bull case reaches $315.99. Management expects fiscal 2028 revenue to grow about 70% and calls that outlook supply-constrained. Vera Rubin brings in roughly $40 billion per gigawatt, compared with $25 billion for Blackwell.
NVIDIA also expects top-five hyperscaler capex to reach $1.3 trillion in 2027 (the power, cooling, and networking suppliers riding that same wave are the subject of a free report we put together here). The stock has firm Wall Street support, with 9 Strong Buy ratings, 48 Buys and just 1 Sell.
Margin Squeeze and $279 Billion in Commitments Could Cap Gains Our bear case is $233.96. Gross margin is expected to bottom at 71% to 72% in Q4 as memory costs rise. Supply obligations have reached $279 billion, and guidance assumes no China data center compute revenue. NVIDIA’s balance-sheet support for AI labs also draws criticism as circular financing.
On the other side, the margin pressure comes from component costs, and pricing power is holding up. Fiscal 2028 margins of 72% to 73% would still rank among the best in the industry.
How NVIDIA Compares to Its Rivals Company Forward P/E Quarterly Revenue Growth (YoY) NVIDIA 25x 105.9% Advanced Micro Devices (NASDAQ:AMD) 40x 50.1% Broadcom (NASDAQ:AVGO) 19x 85.5% AMD is NVIDIA’s most direct rival in data center GPUs. AMD trades at a higher forward multiple even though its revenue is growing at less than half NVIDIA’s pace. That gap suggests investors give NVIDIA too little credit for its lead.
Broadcom makes the custom chips that AI labs are considering as GPU alternatives. Its multiple is cheaper, but its operating margin of 54.3% trails NVIDIA’s 66.2%. Compared with both peers, the 24/7 Wall St. price target looks reasonable and even conservative.
NVIDIA Price Prediction 2026-2030 The 24/7 Wall St. price target of $271.01 carries a buy rating and 90% confidence. Estimate revisions keep rising, which tips the scale for me.
The bull case improves if Vera Rubin launches on schedule and Q4 margins hold at the low end of guidance. The outlook damps if supply commitments start to exceed orders. Even so, the data favors the bulls.
Year Price Target from 24/7 Wall St. 2026 $233.87 2027 $289.46 2028 $314.45 2029 $344.29 2030 $379.02 NVIDIA would need to keep executing on its current strategy for these projections to hold. Real upside or downside could come from relieving supply constraints or a slowdown in hyperscaler spending.
Contact [email protected] for any questions or corrections.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMD, INTC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Nvidia (NVDA) reached a new record high on Monday with Tuesday's premarket trading action indicating an even higher open. Tom White shows how the stock broke out from key support levels as momentum on the RSI nears overbought territory.
Nvidia se po několika měsících pochybností znovu stává miláčkem Wall Street. Kombinace rekordního výhledu tržeb, masivního zpětného odkupu akcií a překvapivě umírněného ocenění je pro investory atraktivní.
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Tagy: Nvidia, akcie, valuace, Výhled, AI, technologické akcie
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A $10,000 investment in Vanguard’s Information Technology ETF at the start of 2026 would be worth $13,700 before distributions and trading costs, after VGT climbed 37% this year.
That makes the fund easy to regret missing and harder to buy after the rally. The AI spending boom supporting Nvidia, Microsoft and other holdings remains strong, while analysts raise earnings expectations.
But Treasury yields above 5% and richer technology valuations leave less room for disappointment.
VGT remains heavily exposed to the companies driving the AI capital-spending cycle.
Vanguard’s latest holdings data put Nvidia at about 17.2% of the fund, Apple at 16.2% and Microsoft at 11.0%.
Semiconductor stocks represented roughly 36% of the portfolio, giving VGT exposure to AI infrastructure alongside software and hardware leaders.
The bullish case is that earnings expectations are catching up with demand.
Technology analyst Dan Ives said Monday that Nvidia estimates could be 20% to 30% too low over the next year as enterprise and physical-AI adoption broadens beyond hyperscalers.
“Numbers are just massively underestimated,” Ives said.
That matters because investors buying VGT today are betting that earnings growth continues catching up with the valuation gains already delivered by the sector.
Microsoft gives the fund a route to AI monetisation.
Melius Research upgraded Microsoft to Buy on Monday with a $665 target, arguing that enterprises increasingly value its combination of Azure infrastructure, Copilot and governance as AI security concerns rise.
The firm described Microsoft as the “adults in charge” of enterprise AI.
That distinction matters for a new VGT buyer. The next leg higher probably requires Nvidia, Microsoft and other large holdings to convert enormous AI spending into sustained revenue and profits rather than simply benefiting from enthusiasm around the technology.
VGT is inexpensive to own, as its 0.09% annual expense ratio works out to about $9 a year on a $10,000 investment.
Low fees help long-term compounding, but they cannot protect investors from sector concentration.
VGT is a technology-sector fund, not a diversified US-market portfolio, and its largest holdings can heavily influence returns.
Another 37% year should not be treated as the base case. A 20% gain would turn $10,000 into about $12,000. A 10% gain would produce roughly $11,000.
A flat year would leave the investment near $10,000 before distributions and fees, while a 20% correction would reduce it to about $8,000.
The outcome may increasingly depend on the battle between earnings and interest rates.
Goldman Sachs’ Tony Pasquariello described the backdrop as “certainly not uncomplicated” in comments reported by MarketWatch, but remained constructive because earnings, fund flows and AI capital spending remain strong.
The risk is that higher bond yields raise the return investors demand from growth stocks.
Dan Niles put the tension more sharply this week, telling CNBC that “either the bond market’s wrong or the stock market is wrong.”
Missing VGT’s rally does not mean the technology trade is over. Nvidia estimates are still rising, Microsoft is finding ways to monetise AI and VGT remains a low-cost way to own US technology.
But a fresh $10,000 investment carries a different risk-reward than it did in January.
The first $3,700 came with a major rerating, but the next leg will probably need earnings to deliver what valuations are already promising.
BNP Paribas Sees Nvidia Holding 75%+ of AI Market and Raises Target Summary
BNP Paribas raised Nvidia’s price target to $345 from $285, implying about 47% upside as it expects continued strength in AI computing
BNP Paribas lifted its Nvidia NVDA price target to $345 from $285, maintaining an Outperform rating as it sees the chipmaker benefiting from the shift toward more demanding AI inference workloads.
The revised target represents about 47% upside from Nvidia's Oct. 2 closing level of $234. BNP Paribas expects the company to retain at least three-fourths of the AI computing market by dollar value, despite gains by AMD and custom-designed accelerators.
The brokerage's view extends beyond Nvidia's graphics processors. It sees the upcoming Vera Rubin platform, which combines computing, networking and other components, as important for agentic AI systems handling more complex tasks.
Nvidia's software and networking capabilities may also help it defend its position as AI infrastructure becomes more integrated. BNP Paribas expects server CPUs and networking to add to the company's growth opportunities.
The brokerage also forecasts gross margins above 70% despite competition. Its valuation framework applies a 15-times multiple to estimated calendar 2028 earnings, alongside cash, to support the new target.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Options traders are betting on a market milestone no company has ever reached, and the window closes at the end of October. A single catalyst could tip the scales either way.
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No company has ever been worth $6 trillion, yet a CNBC options-pricing analysis put the odds of NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) reaching that level by the end of October at about 50%. The same pricing gave it about 13% odds of crossing within the week of Oct. 5.
Option delta estimates the probability that an option finishes in the money, although that estimate changes as the stock moves.
The odds were based on the Friday, Oct. 2 close of $233.95. NVIDIA then rose 2.12% on Oct. 5 to a record $238.90, so the live odds are slightly better than the quoted figures.
How Small the Required Move Really Is $6 trillion is at roughly $249 a share on about 24.1 billion shares outstanding. NVIDIA needs about another 4% from about $5.77 trillion.
The stock gained 4.39% in the week ending Oct. 5, so ordinary volatility could close the gap. That is why traders price the milestone near even.
The Oct. 30 $250 call has a delta of 0.29093, which points to lower odds that NVIDIA finishes October above the line. The headline odds most likely measure the chance of touching the threshold at some point before then.
Why Traders Grew More Optimistic NVIDIA’s board added $150 billion to its buyback on Sept. 28, 2026, leaving $235 billion authorized. A buyback that size reduces the share count gradually over years.
Morgan Stanley analyst Joseph Moore restored NVIDIA as his top chip pick on Oct. 2, 2026, with a $300 target, citing “a very undemanding valuation.” BNP Paribas lifted its target to $345 from $285.
Foxconn’s third-quarter revenue rose 47% on strong AI demand, a signal from the supply chain separate from NVIDIA’s guidance.
A Record High That Still Trails the Chip Sector NVIDIA is up 28.4% year to date, while investingLive noted that the iShares Semiconductor ETF (NASDAQ:SOXX) is up about 96%.
NVIDIA’s fiscal second-quarter revenue rose 105.85% to $96.221 billion, while the stock fell behind.
That backs up Moore’s view. NVIDIA trades at about 48x trailing earnings, but quarterly net income rose 125.9%, and third-quarter revenue guidance is $108.0 billion. With profits growing that fast, the trailing multiple exaggerates what you pay for future earnings.
What Decides the $6 Trillion Race Before Oct. 30 The business is growing faster than the stock, and because NVIDIA has fallen behind the sector, there is less excess to work off if AI spending slows. Options-implied odds reflect holdings more than fundamentals. The chipmakers get the headlines, but the power, cooling, and networking suppliers behind the data centers ride the same wave, and we featured seven of them in a free report.
Taiwan Semiconductor Manufacturing (NYSE:TSM) is scheduled to report before the open on Oct. 15, 2026, giving an early read on foundry demand. NVIDIA’s own report is scheduled for Nov. 18, 2026, after the October window. Neither company has confirmed its date.
A close above roughly $249, on or before Oct. 30, would put NVIDIA past the milestone. A close below $233.95 would mean the odds have turned against it.
Contact [email protected] for any questions or corrections.
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Nvidia (NVDA +2.12%) is getting closer and closer to setting a new market cap record. It is currently a $5.6 trillion company, placing a $6 trillion market cap within reach by the end of this year. But where will it be by 2028?
Judging by Nvidia's current outlook and valuations, it will reach an unexpected level: I think it can easily breach the $10 trillion mark and go even higher. That makes the stock a no-brainer buy, as it indicates it will double in about two and a quarter years. So, how will it reach a $10 trillion market cap?
Easy: It just needs to hit projections.
Image source: The Motley Fool.
Nvidia is not an expensive stock Somewhere along the way, Nvidia's stock developed a narrative that it was expensive. While I'll buy that argument from a trailing-earnings standpoint if you rewind to 2024, that's truly not the case right now. Nvidia trades at 29.5 times trailing earnings, which is about where you'd expect a big tech stock to trade. The problem is, Nvidia is no ordinary big tech stock.
NVDA PE Ratio data by YCharts
Nvidia more than doubled its revenue year over year in its most recent quarterly results, and it told investors it expects 70% revenue growth in the next fiscal year. Find another big tech stock that's expecting that kind of growth that isn't valued at this low a level. It's not possible.
Nvidia is actually quite cheap, and despite management telling investors that it's going to grow rapidly next year and several other firms backing that projection, there isn't really any of next year's growth priced into the stock.
NVDA PE Ratio (Forward 1y) data by YCharts
Nvidia trades for nearly 15 times next year's earnings. So even if the stock rallies to 30 times earnings by the end of the year while meeting projections, it would double. That indicates Nvidia's stock will reach a valuation exceeding $10 trillion by the end of the next fiscal year, which ends in January 2028. So, I think it's pretty safe to say that Nvidia will reach a $10 trillion market cap by 2028, and with more growth expected in the artificial intelligence industry through 2030, it will reach even higher levels over the rest of 2028.
Premium Feature
Moneyball Superscore
95/100
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That makes Nvidia one of the best stocks to buy in the market, and if you've got some capital uninvested, now is a perfect time to deploy it to Nvidia.
@CharlesSchwab clients diversified their portfolios throughout September, highlighted by what Joe Mazzola considers a unique trend in sharp ETF inflows. As he says, not just one ETF made the top 10 buys in the month, but five.
The Nasdaq Composite (^IXIC +1.05%) gained 1.05% to 27,477, while the S&P 500 (^GSPC +0.66%) rose 0.66% to 7,774 and the Dow Jones Industrial Average (^DJI +0.18%) added 0.18% to 51,268 as tech optimism overshadowed elevated Treasury yields.
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Gold prices gained 0.10% to $4,138.68, and the 10-Year Treasury yield rose 0.03% to 5.31%. Almost every sector gained, with industrials and communication stocks surging, while real estate slipped slightly.
Today's biggest movesVaxcyte shares soared over 30% on positive late-stage vaccine success, while Genmab gained almost 11% after announcing positive lymphoma drug data. Meanwhile, PTC climbed following reports of a $22.6 billion buyout offer. Taiwan Semiconductor Manufacturing gained as investors digested reports that it was in discussions with Elon Musk's massive Terafab chip factory.
What this means for investorsEquities gained again today, and the Nasdaq notched another new high despite the global bond sell-off. There's increased appetite for risk after last week's softer-than-expected jobs data, as traders factor in the reduced likelihood of a further Federal Reserve rate hike this month.
Stocks in artificial intelligence bellwether and tech behemoth, Nvidia (NVDA +2.12%) gained, amid speculation that its market cap may soon reach an unprecedented $6 trillion. Fears that the AI boom may burst like the dot-com-era bubble have been offset by strong earnings and continued demand for AI infrastructure.
With a few weeks until earnings season kicks off in earnest, analysts have high expectations. Data from FactSet show that nearly 60% of ratings for S&P 500 companies are Buy. The companies themselves are also hopeful: a record 72 have issued positive Q3 guidance. For investors, those high expectations can be a double-edged sword. The optimism is reassuring, but it means companies can beat forecasts and still disappoint.
Emma Newbery has positions in Nvidia. The Motley Fool has positions in and recommends Autodesk, Genmab A/s, Nvidia, PTC, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The Ratings GameAnalysts highlight the stock’s cheap valuation and the chip maker’s central role in the AI ecosystem
Nvidia was worth $5.76 trillion as of Monday’s close. Photo: MarketWatch/iStockphotoWith Nvidia’s stock booking its first new record close in four months, analysts are upbeat about what’s ahead.
Nvidia shares NVDA finished Monday’s session at $237.58, setting a fresh high that translates to a roughly $5.76 trillion market capitalization for the company.
Kiana Danial, the @InvestDiva, says Nvidia (NVDA) is "underpriced" despite holding a colossal $5.7 trillion market cap. She outlines her bull case for the Mag 7 giant that includes an expanding AI landscape with frontier models that she says will need Nvidia's hardware.
In the latest trading session, Nvidia (NVDA - Free Report) closed at $238.90, marking a +2.12% move from the previous day. The stock's change was more than the S&P 500's daily gain of 0.66%. At the same time, the Dow added 0.18%, and the tech-heavy Nasdaq gained 1.05%.
Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had gained 1.56% lagged the Computer and Technology sector's gain of 6.36% and outpaced the S&P 500's gain of 0.55%.
Market participants will be closely following the financial results of Nvidia in its upcoming release. The company's upcoming EPS is projected at $2.47, signifying a 90.00% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $109.02 billion, up 91.24% from the year-ago period.
NVDA's full-year Zacks Consensus Estimates are calling for earnings of $9.25 per share and revenue of $406.05 billion. These results would represent year-over-year changes of +93.92% and +88.04%, respectively.
Any recent changes to analyst estimates for Nvidia should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.12% higher within the past month. Currently, Nvidia is carrying a Zacks Rank of #1 (Strong Buy).
Digging into valuation, Nvidia currently has a Forward P/E ratio of 25.3. This signifies a discount in comparison to the average Forward P/E of 33.28 for its industry.
We can also see that NVDA currently has a PEG ratio of 1.81. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Semiconductor - General industry currently had an average PEG ratio of 1.78 as of yesterday's close.
The Semiconductor - General industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 24, this industry ranks in the top 10% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow NVDA in the coming trading sessions, be sure to utilize Zacks.com.
