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Nvidia
NVDA +0.84% 95

and major cloud companies are no longer reshaping only the chip market. Their AI buildout is changing supply and demand in long-duration bonds.

Global Macro reported that debt issuance from hyperscalers and Nvidia, including special-purpose vehicles, rose to nearly 70% of U.S. Treasury bond issuance in 2026. The measure uses annual net changes converted into 10-year Treasury equivalents, comparing how much interest-rate duration each group adds.

The ratio climbed from about 1% in 2023 to 7% in 2024, 30% in 2025 and nearly 70% in 2026. Between 2015 and 2024, it remained in single- or low-double-digit territory, except for a decline to negative 8% in 2019.

Hyperscalers include companies including Microsoft, Amazon, Alphabet, Meta, Oracle and Alibaba, which are spending on the data centers, chips and power infrastructure required for AI.

The implication: Investors are absorbing almost as much new duration from this corporate group as the Treasury supplies through coupon issuance. More long-dated corporate paper competes for buyers with government bonds and other issuers. Depending on demand, that added supply could pressure yields and credit spreads or require more attractive pricing.

The figure does not mean these companies borrowed 70% as much as the entire U.S. government. It is a duration-adjusted ratio based on annual net changes. Corporate bonds also carry credit, liquidity and spread risks that Treasuries do not.

For stock investors, the surge shows the AI race is increasingly being financed through balance sheets and special-purpose vehicles, rather than simply operating cash flow. That can accelerate capacity construction but increases exposure to interest rates, refinancing conditions and demand for long-dated debt.

Investors should now watch whether the ratio keeps rising. If AI spending outpaces internal cash generation, corporate duration supply could become a lasting bond-market force. If issuance slows, the extraordinary 2026 spike may prove temporary.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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 has big investments in Intel, SpaceX and many more public companies. But its stakes in OpenAI and Anthropic are the real prize.

Nvidia (NVDA +0.84%) can't build artificial intelligence (AI) hardware fast enough for its customers. But the chips it has already delivered aren't going anywhere.

Nvidia's data center business generated $47.5 billion of revenue in fiscal 2024. In fiscal 2025, that figure jumped 142% to $115.2 billion. And in fiscal 2026, it climbed another 68% to $193.7 billion (Nvidia's fiscal years end in late January). That adds up to about $309 billion of shipments across the last two of those years alone -- and nearly all of that hardware is likely still racked up and running.

How long it keeps running is something Nvidia's biggest customers estimate in their filings, and those estimates carry real money. When Meta Platforms (META +1.00%) raised its estimated useful life for most servers to 5.5 years in 2025, the change added $1.00 to its earnings per share for the year.

And the schedules raise an awkward question for Nvidia: What does demand look like in 2028, when the boom-era chips aren't yet due for retirement?

Image source: Getty Images.

Nvidia's buyers assume the chips last five or six yearsAccording to its latest annual filing, Microsoft depreciates servers and network equipment over two to six years. Alphabet generally uses six years for servers and network equipment. And Meta's 5.5 years took effect at the start of 2025 and covers most of its servers and network assets. The change cut that year's depreciation expense by about $2.9 billion.

Amazon (AMZN -0.15%) went the other way. Its reasoning, I'd argue, is the most interesting part.

The company raised its server estimate from five years to six at the start of 2024. A year later, it reversed, cutting a subset of servers and networking equipment back to five. The shorter lives, Amazon said, are due to "the increased pace of technology development, particularly in the area of artificial intelligence and machine learning." The reversal added $1.4 billion to its 2025 depreciation and amortization expense.

What retires in 2028?Not much of this hardware is due to come out of service in 2028. A machine bought in 2024 on a five-year clock retires in 2029 at the earliest. On a six-year clock, 2030.

In other words, nearly everything from the 2024 and 2025 spending waves should still be working in 2028. The demand Nvidia is counting on that year is almost entirely new capacity, not replacement.

Chief financial officer Colette Kress said on the company's late-August earnings call that Nvidia expects revenue to grow about 70% in fiscal 2028, which runs through late January 2028. She called that a supply constrained outlook.

Nvidia itself makes the case that the schedules are honest. On its earnings call last November, Kress said the A100 chips Nvidia shipped six years earlier were "still running at full utilization today," crediting its CUDA software.

That defense also describes the problem. A chip that stays productive is capacity Nvidia has already been paid for once -- and it competes with whatever the company wants to sell next.

Sure, the dollars can grow even if the units don't. On the August call, CEO Jensen Huang said each new generation carries more revenue per gigawatt of data center capacity (about $18 billion for Hopper, about $40 billion for the new Vera Rubin platform). And "customers want to race to the next generation as fast as they can," he said.

A paid-off chip can work for cheapThe competition gets sharper once a server finishes its schedule. With no cost left on the books, its owner can rent it out at any price that covers electricity and space. Priced that way, a 2024-vintage chip is cheap competition for inference (the everyday work of running AI models), which arguably doesn't require the newest hardware.

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Of course, that market is only starting to form (a marketplace for used Nvidia chips opened this summer). And Nvidia's results suggest why. Kress said in August that Nvidia's computing capacity is fully utilized across every cloud it serves. Supply should remain a bottleneck at least through the end of fiscal 2028. Nobody sells a machine that's earning rent.

Ultimately, the disclosures themselves are worth watching. Amazon's cut says AI hardware ages out faster than planned, which would pull replacement demand forward. Meta's extension says the fleet lasts, leaving 2028 resting that much more on new construction.

As for the stock, shares trade around $230 as of this writing, at about 29 times earnings. Given the growth Nvidia has already guided for, that price strikes me as fair, and I'd still buy shares here.

But the next time the cloud companies change those useful-life estimates, the direction will matter. If they extend again, the chips Nvidia already sold are lasting longer -- and some of the demand investors expect in 2028 may take longer to show up.

A 'Barron's Roundtable' panel discusses recent trends in the market as a rough September comes into play. #fox #media #breakingnews #us #usa #new #news #breaking #foxnews #barronsroundtable #nvidia #openai #stocks #stockmarket #markets #wallstreet #investing #investors #economy #treasury #yields #oil #energy #technology #ai #finance #business #september #markettrends

Wayne Kaufman analyzes the market's recent volatility, noting the digestion of a tremendous first half for tech and semiconductor stocks. He emphasizes the ongoing issue of inflation, with rising oil and commodity prices, but maintains a bullish long-term outlook due to strong corporate earnings.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

$851 Billion Profit Projection $851 billion. That is the approximate annual net income NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) would generate three years out if Wall Street’s forecast of a 64% compounded EPS growth rate plays through, applied to a…

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$851 Billion Profit Projection $851 billion. That is the approximate annual net income NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) would generate three years out if Wall Street’s forecast of a 64% compounded EPS growth rate plays through, applied to a trailing-12-month base of roughly $193 billion in net income and $7.91 in TTM diluted EPS. For context, Saudi Aramco holds the record for the largest annual profit any company has ever reported, at $161.1 billion in 2022. This is a projection based on analyst compounding assumptions rather than issued company guidance.

What It Means Operationally The projected walk is stepwise: Year 1 EPS $13.0 (about $316 billion in net income), Year 2 $21.3 (about $519 billion), and Year 3 $34.9 (about $851 billion). Back into revenue at NVIDIA’s current profitability profile and Year 3 sales land near $1.35 trillion, roughly 4 to 4.5 times the current trailing-12-month revenue of about $303 billion.

The base is grounded in reported results. NVIDIA’s most recent quarter (Q2 FY2027, reported August 26, 2026) delivered $96.22 billion in revenue, up 105.85% year over year, with net income of $59.688 billion, up 125.9%. Operating margin ran 60.38%, net margin 55.6%, and return on equity 101.5%. Full-year FY2026 net income was $120.067 billion, up from $4.368 billion in fiscal 2023. The compounding runway is what makes a Year 3 number that eclipses Aramco even conceivable.

What that means is, if Nvidia reported a total annual revenue of $1.35 trillion in 2029, it would rank as the 18th-largest economy in the world when evaluated directly against national GDP figures. It would place the chipmaker just below Saudi Arabia’s GDP of $1.45 trillion, but ahead of Switzerland at $1.29 trillion.

Market Reaction Shares closed at $230.36 on September 4, 2026. NVDA is up 23.67% year to date, 34.37% over the last year, and 911.71% over five years. The stock carries a P/E of 46 and a market capitalization of $5.5625 trillion.

Bull Case The demand picture behind the projection is the argument. Data Center revenue reached $89.023 billion in Q2, up 117% year over year. Management said cloud industry backlog now exceeds $2 trillion, with top-five hyperscaler capex projected at nearly $800 billion in 2026 and $1.3 trillion in 2027. NVIDIA’s revenue opportunity per gigawatt has stepped from roughly $18 billion on Hopper to $25 billion on Blackwell to $40 billion on Vera Rubin.

The customer commitments back the ramp. AWS is deploying an additional 2 million GPUs through Q2 FY2029. OpenAI has committed to approximately 12 gigawatts of NVIDIA compute through 2030. Neocloud partners are expected to exit the year with eight gigawatts of installed capacity, up from about three gigawatts at the end of 2025. All of that compute has to be powered, cooled, and networked by somebody, which is why we put seven of the picks-and-shovels suppliers behind the buildout in a free AI infrastructure report. Management guided fiscal 2028 revenue growth to approximately 70% year over year and called the outlook supply constrained, with Jensen Huang saying “Our entire supply chain is challenged. And everybody is really running flat out.”

Analyst sentiment supports the compounding thesis. Fiscal 2028 EPS estimates have moved from $12.6011 ninety days ago to $15.4043, with 52 analysts covering the fiscal year and zero downward revisions in the trailing 30 days. Analyst sentiment breaks 95 bullish to 2 bearish. Q3 FY27 revenue is guided to $108.0 billion, plus or minus 2%, excluding China Data Center compute. Capital return remains active: NVIDIA returned about $26.0 billion to shareholders in Q2 with $99.0 billion remaining under the buyback authorization.

Bottom Line For long-term holders, the $851 billion projection reframes the debate. It is what NVIDIA’s own math produces if the current earnings trajectory and analyst assumptions hold through 2029. The next test is Q3, where management has already committed to $108 billion in revenue, followed by the dividend payment on October 1, 2026 (record date September 10, 2026). If Vera Rubin ramps as promised and hyperscaler capex holds, the record book for corporate profitability may need a new binding.

Contact [email protected] for any questions or corrections.

Artificial intelligence is moving from an interesting software feature into something closer to a new industrial utility. The numbers behind that transition are getting difficult to ignore.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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 +0.84%) is the world's largest company. It got that way, in part, by partnering with several of the world's fastest-growing companies to fuel an AI-powered future. Through these interactions, Nvidia also identifies businesses it thinks are worth investing in. One company it bought shares in is Nebius Group (NBIS +7.48%).

Nebius is one of the fastest-growing, publicly traded cloud computing companies, and it looks like a great stock to invest in. Its growth should propel it to new heights over the next few years, making it a smart stock to buy now.

Image source: Getty Images.

Nebius' rapid growth rate isn't short-lived I'll cut to the chase; the primary reason I think Nebius is a fantastic buy is its ludicrous growth rate. In the second quarter, Nebius' revenue grew by 454% year over year. There wasn't an acquisition or one-time deal that helped deliver that incredibly fast growth rate; it was organic growth fueled by incredible demand for its services.

Nebius' primary business is neocloud computing, which is cloud computing specifically for AI workloads. It's both constructing and renting out data centers, then outfitting those buildings with computing equipment, primarily from Nvidia. Nebius has a great relationship with Nvidia to obtain cutting-edge hardware before many others, making it a smart company to run AI workloads on.

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Because of how much computing power the AI industry is expected to need, there's plenty more growth ahead, and Nebius is grabbing as much market share as possible by spending big right now. As a result, it isn't even close to profitable. However, investors shouldn't expect it to be because this is a once-in-a-lifetime opportunity for Nebius. All of this spending at an unprofitable level is fine with most investors as long as Nebius' growth rate stays elevated. Fortunately for investors, that's exactly what's expected to happen.

Wall Street analysts estimate that sales will grow by 533% in 2026 and 257% in 2027. When growth begins to fall to more normal rates, investors will start expecting Nebius to become more profitable. That may not be for years, as the AI build-out is expected to last through at least 2030.

Nebius has already seen significant share price growth, with the stock trading up 220% over the past year. Despite the rapid price escalation, its valuation remains somewhat reasonable on multiple metrics for a high-growth stock. Its trailing price-to-earnings ratio is 74.6, its forward P/E is 43.5, and its price-to-sales ratio is 41.7.

Nvidia interacts with several interesting companies, but for it to invest in Nebius suggests Nvidia management thinks Nebius has potential. I think this is about as good an endorsement as investors can ask for, and if you're looking to add a high-growth name with moonshot potential to your portfolio, Nebius is a great pick.

Fort Washington Investment Advisors Inc. OH raised its position in NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 0.9% in the 2nd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 2,764,618 shares of the computer hardware maker’s stock after purchasing an additional 24,571 shares during the quarter. NVIDIA accounts for about 2.8% of Fort Washington Investment Advisors Inc. OH’s holdings, making the stock its 5th biggest holding. Fort Washington Investment Advisors Inc. OH’s holdings in NVIDIA were worth $553,172,000 at the end of the most recent reporting period.

Several other institutional investors also recently modified their holdings of NVDA. State Street Corp grew its holdings in NVIDIA by 1.2% in the fourth quarter. State Street Corp now owns 991,480,489 shares of the computer hardware maker’s stock worth $184,911,111,000 after purchasing an additional 11,451,386 shares during the period. Geode Capital Management LLC raised its position in NVIDIA by 0.6% in the 4th quarter. Geode Capital Management LLC now owns 588,803,093 shares of the computer hardware maker’s stock valued at $109,446,217,000 after buying an additional 3,383,441 shares during the last quarter. Norges Bank bought a new stake in NVIDIA in the 4th quarter worth about $62,244,133,000. Bank of America Corp DE raised its stake in shares of NVIDIA by 2.1% during the 1st quarter. Bank of America Corp DE now owns 191,200,989 shares of the computer hardware maker’s stock worth $33,345,453,000 after purchasing an additional 4,019,505 shares during the period. Finally, Legal & General Group Plc grew its position in shares of NVIDIA by 1.5% during the 3rd quarter. Legal & General Group Plc now owns 181,203,035 shares of the computer hardware maker’s stock valued at $33,808,862,000 after acquiring an additional 2,609,560 shares during the period. Institutional investors own 65.27% of the company’s stock.

Analyst Upgrades and Downgrades A number of equities analysts have recently commented on NVDA shares. New Street Research cut their price target on NVIDIA from $343.00 to $340.00 in a report on Thursday, May 21st. China Renaissance increased their price target on shares of NVIDIA from $319.00 to $330.00 and gave the company a “buy” rating in a research report on Monday, August 31st. Wells Fargo & Company reaffirmed an “overweight” rating and issued a $315.00 price target on shares of NVIDIA in a research note on Tuesday, August 11th. UBS Group set a $300.00 price objective on shares of NVIDIA and gave the stock a “buy” rating in a report on Thursday, August 27th. Finally, Wedbush increased their price objective on NVIDIA from $330.00 to $345.00 and gave the stock an “outperform” rating in a report on Thursday, August 27th. Two analysts have rated the stock with a Strong Buy rating, fifty have issued a Buy rating and three have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average price target of $324.83.

Read Our Latest Stock Analysis on NVDA NVIDIA News Summary Here are the key news stories impacting NVIDIA this week:

Positive Sentiment: Hugging Face expands NVIDIA’s AI ecosystem: The acquisition gives NVIDIA access to Hugging Face’s open-source platform, which hosts millions of models, applications and datasets used by more than 18 million developers. Investors view the deal as a way to deepen CUDA adoption, strengthen NVIDIA’s software moat and position the company as an AI platform provider rather than solely a chip supplier. Management says Hugging Face will remain open to the broader AI ecosystem. Why NVIDIA’s defensive move to acquire Hugging Face is about much more than chips Positive Sentiment: New consumer AI revenue channel: Lenovo and Acer are expected to launch Windows PCs powered by NVIDIA’s RTX Spark chip in October. Local AI processing could expand NVIDIA’s addressable market while reducing reliance on cloud data centers. HP also announced new OmniBook PCs using RTX Spark technology. NVIDIA sets October launch for RTX Spark AI PCs Positive Sentiment: Analyst support and demand remain strong: Needham and Rosenblatt reaffirmed Buy ratings with price targets of $300 and $390, respectively. Recent earnings showed revenue growth above 100%, a 63.7% net margin and results ahead of consensus, while management’s long-term outlook continues to imply robust AI infrastructure spending. NVIDIA’s equity investments in companies such as OpenAI, CoreWeave and Nebius have also grown substantially, reinforcing its influence across the AI supply chain. NVIDIA has built a $99 billion equity portfolio Neutral Sentiment: Competitive and valuation considerations: NVIDIA remains dominant, but AMD, Broadcom and Intel are pursuing AI and server opportunities. Rising memory and optical-networking costs could pressure gross margins even if they confirm that demand exceeds supply. Negative Sentiment: Insider selling adds a cautionary signal: Director Mark Stevens sold roughly 648,500 shares in two transactions, while EVP Timothy Teter sold 30,000 shares. The sales were disclosed under planned transactions and represent small portions of their remaining holdings, limiting their significance but potentially weighing on sentiment. Insider Transactions at NVIDIA In related news, Director Mark A. Stevens sold 885,000 shares of the stock in a transaction on Thursday, June 18th. The stock was sold at an average price of $210.17, for a total value of $186,000,450.00. Following the completion of the transaction, the director directly owned 5,207,271 shares of the company’s stock, valued at approximately $1,094,412,146.07. This represents a 14.53% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Timothy S. Teter sold 30,000 shares of the firm’s stock in a transaction on Monday, August 31st. The stock was sold at an average price of $217.88, for a total value of $6,536,400.00. Following the completion of the sale, the executive vice president directly owned 2,687,660 shares of the company’s stock, valued at $585,587,360.80. This trade represents a 1.10% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 1,563,501 shares of company stock worth $335,380,530 over the last three months. Corporate insiders own 3.94% of the company’s stock.

NVIDIA Stock Up 0.8% Shares of NVDA opened at $230.36 on Friday. The business’s 50 day simple moving average is $210.61 and its 200-day simple moving average is $202.05. NVIDIA Corporation has a 1 year low of $164.07 and a 1 year high of $236.54. The company has a debt-to-equity ratio of 0.14, a current ratio of 4.59 and a quick ratio of 3.85. The stock has a market capitalization of $5.55 trillion, a price-to-earnings ratio of 29.12, a price-to-earnings-growth ratio of 1.79 and a beta of 2.22.

NVIDIA (NASDAQ:NVDA – Get Free Report) last released its earnings results on Wednesday, August 26th. The computer hardware maker reported $2.22 earnings per share for the quarter, beating the consensus estimate of $2.09 by $0.13. NVIDIA had a return on equity of 96.04% and a net margin of 63.66%.The firm had revenue of $96.22 billion for the quarter, compared to the consensus estimate of $92.27 billion. During the same quarter in the previous year, the company posted $1.05 EPS. The company’s revenue for the quarter was up 105.9% compared to the same quarter last year. As a group, equities analysts expect that NVIDIA Corporation will post 9.1 earnings per share for the current fiscal year.

NVIDIA Announces Dividend The business also recently declared a quarterly dividend, which will be paid on Thursday, October 1st. Shareholders of record on Thursday, September 10th will be issued a $0.25 dividend. The ex-dividend date of this dividend is Thursday, September 10th. This represents a $1.00 dividend on an annualized basis and a dividend yield of 0.4%. NVIDIA’s dividend payout ratio (DPR) is currently 12.64%.

NVIDIA announced that its Board of Directors has initiated a stock repurchase plan on Wednesday, May 20th that authorizes the company to repurchase $80.00 billion in outstanding shares. This repurchase authorization authorizes the computer hardware maker to repurchase up to 1.5% of its stock through open market purchases. Stock repurchase plans are usually an indication that the company’s management believes its shares are undervalued.

About NVIDIA (Free Report)

NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.

The company’s product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.

See Also Five stocks we like better than NVIDIA Revolution Medicines Got Its Breakthrough—What Moves It Next? Retail Earnings Just Exposed a Bigger Divide in the U.S. Consumer Economy FB Financial’s Southern Expansion and Buybacks Drive Analyst Optimism AST SpaceMobile Stock Soared 12%—This Was the Catalyst Want to see what other hedge funds are holding NVDA? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for NVIDIA Corporation (NASDAQ:NVDA – Free Report).

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Cary Street Partners Financial LLC raised its stake in NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 3.8% during the 2nd quarter, according to its most recent Form 13F filing with the SEC. The institutional investor owned 247,223 shares of the computer hardware maker’s stock after buying an additional 8,983 shares during the period. NVIDIA makes up about 1.1% of Cary Street Partners Financial LLC’s investment portfolio, making the stock its 16th largest holding. Cary Street Partners Financial LLC’s holdings in NVIDIA were worth $49,467,000 as of its most recent filing with the SEC.

Other large investors have also made changes to their positions in the company. Norges Bank acquired a new stake in NVIDIA during the fourth quarter valued at $62,244,133,000. J. Stern & Co. LLP boosted its holdings in shares of NVIDIA by 13,709.1% during the 4th quarter. J. Stern & Co. LLP now owns 125,760,307 shares of the computer hardware maker’s stock worth $23,454,297,000 after buying an additional 124,849,603 shares during the period. Cardano Risk Management B.V. grew its position in shares of NVIDIA by 896.4% in the fourth quarter. Cardano Risk Management B.V. now owns 78,123,960 shares of the computer hardware maker’s stock valued at $14,570,119,000 after purchasing an additional 70,283,539 shares during the last quarter. Capital Research Global Investors increased its position in NVIDIA by 16.1% in the 3rd quarter. Capital Research Global Investors now owns 165,377,852 shares of the computer hardware maker’s stock worth $30,855,564,000 after buying an additional 22,896,705 shares during the period. Finally, Laurel Wealth Advisors LLC raised its stake in NVIDIA by 15,496.1% during the 2nd quarter. Laurel Wealth Advisors LLC now owns 21,865,525 shares of the computer hardware maker’s stock valued at $3,454,534,000 after purchasing an additional 21,725,326 shares during the last quarter. Institutional investors and hedge funds own 65.27% of the company’s stock.

Insider Buying and Selling at NVIDIA In other news, EVP Timothy S. Teter sold 30,000 shares of NVIDIA stock in a transaction dated Monday, August 31st. The shares were sold at an average price of $217.88, for a total value of $6,536,400.00. Following the completion of the transaction, the executive vice president owned 2,687,660 shares in the company, valued at $585,587,360.80. This trade represents a 1.10% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Mark A. Stevens sold 63,501 shares of NVIDIA stock in a transaction dated Tuesday, September 1st. The shares were sold at an average price of $220.06, for a total value of $13,974,030.06. Following the transaction, the director directly owned 4,558,770 shares of the company’s stock, valued at $1,003,202,926.20. The trade was a 1.37% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders sold 1,563,501 shares of company stock valued at $335,380,530. Company insiders own 3.94% of the company’s stock.

NVIDIA Stock Up 0.8% Shares of NVDA opened at $230.36 on Friday. The company has a debt-to-equity ratio of 0.14, a quick ratio of 3.85 and a current ratio of 4.59. The stock has a market capitalization of $5.55 trillion, a price-to-earnings ratio of 29.12, a PEG ratio of 1.79 and a beta of 2.22. NVIDIA Corporation has a 52 week low of $164.07 and a 52 week high of $236.54. The stock has a fifty day moving average of $210.61 and a 200-day moving average of $202.05. NVIDIA (NASDAQ:NVDA – Get Free Report) last announced its earnings results on Wednesday, August 26th. The computer hardware maker reported $2.22 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.09 by $0.13. NVIDIA had a return on equity of 96.04% and a net margin of 63.66%.The business had revenue of $96.22 billion during the quarter, compared to analyst estimates of $92.27 billion. During the same period last year, the company earned $1.05 EPS. NVIDIA’s revenue for the quarter was up 105.9% compared to the same quarter last year. As a group, sell-side analysts anticipate that NVIDIA Corporation will post 9.1 earnings per share for the current fiscal year.

NVIDIA announced that its board has authorized a stock repurchase program on Wednesday, May 20th that allows the company to repurchase $80.00 billion in shares. This repurchase authorization allows the computer hardware maker to repurchase up to 1.5% of its shares through open market purchases. Shares repurchase programs are usually a sign that the company’s leadership believes its stock is undervalued.

NVIDIA Announces Dividend The firm also recently declared a quarterly dividend, which will be paid on Thursday, October 1st. Investors of record on Thursday, September 10th will be given a $0.25 dividend. The ex-dividend date of this dividend is Thursday, September 10th. This represents a $1.00 annualized dividend and a yield of 0.4%. NVIDIA’s dividend payout ratio (DPR) is presently 12.64%.

Key NVIDIA News Here are the key news stories impacting NVIDIA this week:

Positive Sentiment: Hugging Face expands NVIDIA’s AI ecosystem: The acquisition gives NVIDIA access to Hugging Face’s open-source platform, which hosts millions of models, applications and datasets used by more than 18 million developers. Investors view the deal as a way to deepen CUDA adoption, strengthen NVIDIA’s software moat and position the company as an AI platform provider rather than solely a chip supplier. Management says Hugging Face will remain open to the broader AI ecosystem. Why NVIDIA’s defensive move to acquire Hugging Face is about much more than chips Positive Sentiment: New consumer AI revenue channel: Lenovo and Acer are expected to launch Windows PCs powered by NVIDIA’s RTX Spark chip in October. Local AI processing could expand NVIDIA’s addressable market while reducing reliance on cloud data centers. HP also announced new OmniBook PCs using RTX Spark technology. NVIDIA sets October launch for RTX Spark AI PCs Positive Sentiment: Analyst support and demand remain strong: Needham and Rosenblatt reaffirmed Buy ratings with price targets of $300 and $390, respectively. Recent earnings showed revenue growth above 100%, a 63.7% net margin and results ahead of consensus, while management’s long-term outlook continues to imply robust AI infrastructure spending. NVIDIA’s equity investments in companies such as OpenAI, CoreWeave and Nebius have also grown substantially, reinforcing its influence across the AI supply chain. NVIDIA has built a $99 billion equity portfolio Neutral Sentiment: Competitive and valuation considerations: NVIDIA remains dominant, but AMD, Broadcom and Intel are pursuing AI and server opportunities. Rising memory and optical-networking costs could pressure gross margins even if they confirm that demand exceeds supply. Negative Sentiment: Insider selling adds a cautionary signal: Director Mark Stevens sold roughly 648,500 shares in two transactions, while EVP Timothy Teter sold 30,000 shares. The sales were disclosed under planned transactions and represent small portions of their remaining holdings, limiting their significance but potentially weighing on sentiment. Analyst Upgrades and Downgrades A number of equities analysts have recently commented on NVDA shares. Morgan Stanley set a $300.00 price objective on shares of NVIDIA and gave the stock an “overweight” rating in a report on Thursday, August 27th. China Renaissance raised their price objective on shares of NVIDIA from $319.00 to $330.00 and gave the company a “buy” rating in a research report on Monday, August 31st. TD Cowen reiterated a “buy” rating on shares of NVIDIA in a report on Tuesday, August 18th. Benchmark reiterated a “buy” rating and set a $335.00 target price on shares of NVIDIA in a research report on Thursday, August 27th. Finally, Oppenheimer set a $315.00 price objective on shares of NVIDIA and gave the stock an “outperform” rating in a research note on Thursday, August 27th. Two research analysts have rated the stock with a Strong Buy rating, fifty have issued a Buy rating and three have assigned a Hold rating to the stock. According to MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average price target of $324.83.

Get Our Latest Stock Report on NVDA

NVIDIA Profile (Free Report)

NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.

The company’s product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.

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Central Bank & Trust Co. reduced its position in shares of NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 3.1% during the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 367,069 shares of the computer hardware maker’s stock after selling 11,891 shares during the period. NVIDIA comprises 10.4% of Central Bank & Trust Co.’s investment portfolio, making the stock its largest holding. Central Bank & Trust Co.’s holdings in NVIDIA were worth $73,447,000 at the end of the most recent quarter.

Several other hedge funds and other institutional investors have also recently bought and sold shares of NVDA. Norges Bank bought a new stake in shares of NVIDIA in the 4th quarter valued at $62,244,133,000. J. Stern & Co. LLP lifted its position in shares of NVIDIA by 13,709.1% during the 4th quarter. J. Stern & Co. LLP now owns 125,760,307 shares of the computer hardware maker’s stock worth $23,454,297,000 after buying an additional 124,849,603 shares in the last quarter. Cardano Risk Management B.V. grew its stake in NVIDIA by 896.4% in the 4th quarter. Cardano Risk Management B.V. now owns 78,123,960 shares of the computer hardware maker’s stock valued at $14,570,119,000 after purchasing an additional 70,283,539 shares during the period. Capital Research Global Investors raised its position in NVIDIA by 16.1% in the third quarter. Capital Research Global Investors now owns 165,377,852 shares of the computer hardware maker’s stock worth $30,855,564,000 after acquiring an additional 22,896,705 shares during the period. Finally, Laurel Wealth Advisors LLC lifted its stake in NVIDIA by 15,496.1% in the second quarter. Laurel Wealth Advisors LLC now owns 21,865,525 shares of the computer hardware maker’s stock valued at $3,454,534,000 after purchasing an additional 21,725,326 shares during the last quarter. 65.27% of the stock is owned by institutional investors and hedge funds.

NVIDIA News Roundup Here are the key news stories impacting NVIDIA this week:

Positive Sentiment: Hugging Face expands NVIDIA’s AI ecosystem: The acquisition gives NVIDIA access to Hugging Face’s open-source platform, which hosts millions of models, applications and datasets used by more than 18 million developers. Investors view the deal as a way to deepen CUDA adoption, strengthen NVIDIA’s software moat and position the company as an AI platform provider rather than solely a chip supplier. Management says Hugging Face will remain open to the broader AI ecosystem. Why NVIDIA’s defensive move to acquire Hugging Face is about much more than chips Positive Sentiment: New consumer AI revenue channel: Lenovo and Acer are expected to launch Windows PCs powered by NVIDIA’s RTX Spark chip in October. Local AI processing could expand NVIDIA’s addressable market while reducing reliance on cloud data centers. HP also announced new OmniBook PCs using RTX Spark technology. NVIDIA sets October launch for RTX Spark AI PCs Positive Sentiment: Analyst support and demand remain strong: Needham and Rosenblatt reaffirmed Buy ratings with price targets of $300 and $390, respectively. Recent earnings showed revenue growth above 100%, a 63.7% net margin and results ahead of consensus, while management’s long-term outlook continues to imply robust AI infrastructure spending. NVIDIA’s equity investments in companies such as OpenAI, CoreWeave and Nebius have also grown substantially, reinforcing its influence across the AI supply chain. NVIDIA has built a $99 billion equity portfolio Neutral Sentiment: Competitive and valuation considerations: NVIDIA remains dominant, but AMD, Broadcom and Intel are pursuing AI and server opportunities. Rising memory and optical-networking costs could pressure gross margins even if they confirm that demand exceeds supply. Negative Sentiment: Insider selling adds a cautionary signal: Director Mark Stevens sold roughly 648,500 shares in two transactions, while EVP Timothy Teter sold 30,000 shares. The sales were disclosed under planned transactions and represent small portions of their remaining holdings, limiting their significance but potentially weighing on sentiment. NVIDIA Stock Performance NVDA opened at $230.36 on Friday. The company’s 50 day moving average is $210.61 and its 200 day moving average is $202.05. The company has a current ratio of 4.59, a quick ratio of 3.85 and a debt-to-equity ratio of 0.14. NVIDIA Corporation has a 12-month low of $164.07 and a 12-month high of $236.54. The company has a market cap of $5.55 trillion, a price-to-earnings ratio of 29.12, a PEG ratio of 1.79 and a beta of 2.22. NVIDIA (NASDAQ:NVDA – Get Free Report) last announced its quarterly earnings data on Wednesday, August 26th. The computer hardware maker reported $2.22 EPS for the quarter, beating the consensus estimate of $2.09 by $0.13. The business had revenue of $96.22 billion for the quarter, compared to the consensus estimate of $92.27 billion. NVIDIA had a return on equity of 96.04% and a net margin of 63.66%.The business’s revenue was up 105.9% on a year-over-year basis. During the same period in the previous year, the business earned $1.05 earnings per share. On average, equities research analysts predict that NVIDIA Corporation will post 9.1 EPS for the current year.

NVIDIA Announces Dividend The company also recently declared a quarterly dividend, which will be paid on Thursday, October 1st. Investors of record on Thursday, September 10th will be paid a dividend of $0.25 per share. The ex-dividend date of this dividend is Thursday, September 10th. This represents a $1.00 dividend on an annualized basis and a dividend yield of 0.4%. NVIDIA’s payout ratio is currently 12.64%.

NVIDIA announced that its Board of Directors has authorized a stock repurchase program on Wednesday, May 20th that authorizes the company to buyback $80.00 billion in outstanding shares. This buyback authorization authorizes the computer hardware maker to repurchase up to 1.5% of its shares through open market purchases. Shares buyback programs are often a sign that the company’s board believes its shares are undervalued.

Analysts Set New Price Targets A number of equities analysts have recently commented on the company. Daiwa Securities Group raised their price target on NVIDIA from $215.00 to $255.00 and gave the stock an “outperform” rating in a report on Friday, May 22nd. KGI Securities raised their price target on NVIDIA from $335.00 to $345.00 in a research report on Thursday, August 27th. William Blair reaffirmed an “outperform” rating on shares of NVIDIA in a report on Tuesday, June 2nd. CICC Research boosted their price objective on NVIDIA from $240.60 to $268.30 and gave the company an “outperform” rating in a research report on Friday, May 22nd. Finally, Evercore set a $465.00 target price on NVIDIA and gave the stock an “outperform” rating in a research note on Thursday, August 27th. Two research analysts have rated the stock with a Strong Buy rating, fifty have assigned a Buy rating and three have assigned a Hold rating to the stock. Based on data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus target price of $324.83.

Check Out Our Latest Report on NVDA

Insider Buying and Selling In other news, EVP Timothy S. Teter sold 30,000 shares of NVIDIA stock in a transaction on Monday, August 31st. The stock was sold at an average price of $217.88, for a total value of $6,536,400.00. Following the transaction, the executive vice president directly owned 2,687,660 shares in the company, valued at approximately $585,587,360.80. This trade represents a 1.10% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Mark A. Stevens sold 885,000 shares of the business’s stock in a transaction that occurred on Thursday, June 18th. The stock was sold at an average price of $210.17, for a total transaction of $186,000,450.00. Following the transaction, the director owned 5,207,271 shares of the company’s stock, valued at approximately $1,094,412,146.07. This trade represents a 14.53% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders have sold 1,563,501 shares of company stock worth $335,380,530. Insiders own 3.94% of the company’s stock.

NVIDIA Company Profile (Free Report)

NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.

The company’s product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.

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I get cautious when an artificial intelligence (AI) stock asks investors to pay today for profits that may not show up for years.

Nvidia (NVDA +0.84%) has been the dominant player in AI hardware for some time, but its stock still deserves a closer look even after gaining more than 360% over the past three years (as of Sept. 2, 2026). Is Nvidia stock now priced for distant hopes, or is it one of the tech sector's rare exceptions?

Image source: Getty Images.

Nvidia is already making huge profits from AI Nvidia's results for its fiscal 2027 second quarter (which ended July 26) show how much the company is already benefiting from AI infrastructure spending. The company's revenue rose 106% year over year to $96.2 billion. The performance was mainly driven by the data center segment, where revenue increased 117% year over year to $89 billion. The company also generated $63.7 billion in generally accepted accounting principles (GAAP) operating income during the quarter. This pace of growth is particularly impressive considering Nvidia's massive size.

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Nvidia is also converting a large portion of its revenues into cash. The company's free cash flow reached $69.9 billion, while the company returned roughly $46 billion to shareholders through share repurchases and dividends in the first half of its fiscal 2027. This shows that Nvidia has significant funds to invest in research and development, secure future supply, and return capital to shareholders.

However, strong cash generation does not automatically make Nvidia's valuation attractive. The stock trades at roughly 25 times analysts' consensus estimate for fiscal 2027 earnings of $9.26 per share. But the multiple falls to around 15 times based on the analysts' fiscal 2028 earnings estimate of $15.59 per share. Hence, I believe that the attractiveness of Nvidia's valuation depends significantly on whether the company can deliver the growth Wall Street currently expects.

Nvidia is expanding beyond GPUs Nvidia's big upcoming growth driver is the Vera Rubin system, which is already in production. Management expects the new platform to account for about 20% of data center segment revenue in the third quarter. Nvidia has also received purchase orders for Vera Rubin from every major hyperscaler, AI cloud provider, and equipment manufacturer.

Nvidia estimates that its revenue opportunity for every gigawatt (a measure of power capacity) of AI infrastructure has increased from around $18 billion with its Hopper GPUs to $25 billion with its Blackwell systems and $40 billion with the Vera Rubin platform. Vera Rubin includes not only Rubin GPUs, but also Nvidia's Vera CPUs, NVLink high-speed interconnect technology, and InfiniBand or Ethernet networking. By selling more parts of the overall computing system, Nvidia can generate more revenue per data center.

Demand also remains strong. Nvidia gave preliminarily guidance saying it expects revenue to grow by about 70% in fiscal 2028, despite its production capacity being supply-constrained. Management said customer forecasts indicate that demand could support around 100% revenue growth for fiscal 2028.

Nvidia still faces significant risks But I will also give due attention to the company's risks. Nvidia has warned that shortages of land, power, and other data center infrastructure could delay customer deployments of its hardware.

Nvidia's growth will also depend heavily on whether its customers can earn attractive returns from their massive AI infrastructure investments. There are encouraging signs. Microsoft's Azure revenue grew 43% year over year in the fourth quarter of its fiscal 2026 (which ended June 30), while Amazon Web Services' net sales increased 37% year over year in the second quarter. Alphabet's Google Cloud revenue also surged 82% year over year in the second quarter, driven by strong demand for AI infrastructure and AI solutions.

While these growth rates suggest that AI infrastructure spending is already helping cloud companies, they do not yet prove that the huge amounts being invested in new AI capacity will generate sufficiently high returns over time to justify the outlays.

Nvidia is also making increasingly large financial commitments to support future demand. As of the end of its latest quarter, the company had $366 billion in future spending commitments, including $279 billion related to supply and capacity. Nvidia has also guaranteed up to $108.5 billion, including a $105 billion guarantee related to a data center project for OpenAI. These commitments increase the company's downside exposure if AI infrastructure demand slows or if its customers face difficulties funding their projects.

Margins are another factor to watch. Nvidia reported a 75% gross margin in the second quarter. But management expects margins of 71% to 72% in the fourth quarter and 72% to 73% in fiscal 2028, due to pressure from higher memory prices.

Overall, my view is that Nvidia stock is not cheap based on a risk-reward analysis, but its share price is much better supported by the company's current earnings and cash flow than most AI stocks.

Historically, September has been a difficult month for Wall Street. The S&P 500 has fallen by an average of about 1.1% during the month from 1926 through 2024. Yet Nvidia (NVDA +0.84%) stock has gained ground in seven of the past 10 Septembers, with a median return of about 1.5%. Hence, while the September Effect may offer a reason for some caution around the overall stock market, it hasn't been such a negative indicator for Nvidia's stock.

And recently, CEO Jensen Huang also gave investors a potentially more important signal. He said Nvidia expects revenue to grow about 70% in its fiscal 2028, which begins Jan 31, 2027. But management says even that forecast doesn't reflect the full scope of demand for its offerings; it's constrained by the limited supply of components required to build its artificial intelligence (AI) platforms. 

Nvidia CEO Jensen Huang. Image source: Nvidia.

Nvidia's visibility into future demand is sharpening In its fiscal 2027 second quarter (which ended July 26), Nvidia's revenue soared by 106% year over year to $96.2 billion, including $89 billion in sales from the data center segment. However, management's long-term outlook was even more impressive.

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Wall Street analysts had previous expected the company to deliver fiscal 2028 revenue of about $570 billion, translating to growth of roughly 44%. Nvidia's guidance, however, implies revenue of close to $700 billion.

CEO Jensen Huang said that Nvidia has never offered revenue guidance for a full year in advance before. However, this time, the company has much better visibility into memory and manufacturing capacity, as well as the land, power, and data-center infrastructure needed to deploy its products. Some of this infrastructure needs to be secured two to three years in advance.

Supply constraints could limit Nvidia's fiscal 2028 growth CFO Colette Kress highlighted that customer forecasts currently indicate Nvidia's revenue may double next year. Huang also said Nvidia's revenue growth could be "a lot higher" if the company were not supply-constrained.

Nvidia exited the fiscal second quarter with $279 billion of supply and capacity commitments, up sequentially from $119 billion. These commitments are primarily related to memory purchases and manufacturing capacity. Of that total, $92 billion is scheduled for the rest of fiscal 2027, $87 billion for fiscal 2028, and $88 billion for fiscal 2029.

Nvidia's largest customers are also continuing to spend heavily on AI infrastructure. Amazon (AMZN -0.15%) Web Services plans to deploy another 2 million Nvidia GPUs in calendar years 2027 and 2028. Nvidia also expects the combined capital expenditures of the top five hyperscalers to approach $800 billion in 2026 and $1.3 trillion in 2027.

The demand trends look impressive, even when the company is not factoring any data center compute revenue from China into its current outlook. Hence, a meaningful recovery of its position in the Chinese market is not currently part of Nvidia's growth expectations.

Nvidia's revenue opportunity per AI data center is expanding Nvidia is also expanding its revenue opportunity from each gigawatt (power capacity) of AI infrastructure. Management estimates that this opportunity has increased from roughly $18 billion with Hopper GPUs to $25 billion with Blackwell systems and $40 billion with Vera Rubin systems. These increases are partly a result of the fact that Nvidia is selling more components of the overall AI system, including CPUs, GPUs, NVLink (Nvidia's high-speed technology for connecting GPUs and other processors), and other networking products. Hence, the company benefits not only from the construction of more AI data centers, but also because it is generating more revenue per gigawatt of new capacity deployed.

Increasing adoption of agentic AI could further drive demand for compute capacity. Huang said AI agents can require roughly 15 to 100 times more compute than direct human use of AI, depending on the task. These agents can also run continuously and interact with other agents. Hence, future demand for Nvidia's wares may increasingly depend on the actual use of AI applications rather than on the computing power required to train AI models.

Nvidia's growth outlook also comes with risks Nvidia, however, has warned that customer demand forecasts can prove inaccurate. Its customers may also delay purchases because of constraints related to data center infrastructure or capital availability. In such a scenario, Nvidia's large commitments to its own suppliers could result in higher costs.

Nvidia is also providing support for some large AI infrastructure projects. In August, the company agreed to provide guarantees of up to $105 billion for a data center project in Ohio. That campus will exclusively host Nvidia computing systems under 20-year leases to OpenAI. Huang also said AI labs for which Nvidia expects to use its balance sheet could account for roughly one-quarter of the company's business in fiscal 2028.

Rising memory costs could also pressure profitability. Nvidia expects its gross margins to fall from 75% in the fiscal second quarter to around 71% to 72% in the fiscal fourth quarter, before improving to around 72% to 73% in fiscal 2028. Management attributed much of this pressure to sharp increases in memory prices.

Nvidia's stock also faces near-term pressure. On Sept. 1, rising Treasury yields and oil prices pushed the Nasdaq Composite down by 1%. Besides these marketwide risks, Nvidia is also facing concerns about some of its AI financing arrangements. Its stock slipped by 1.5% during the session.

September could still bring volatility for Nvidia investors. However, it is obvious that Nvidia now has much greater visibility into demand several years ahead. If that visibility holds, short-term weaknesses could matter far less than the scale of the growth opportunity the company is preparing for.

Nvidia (NVDA +0.84%) recently reported a quarter in which the company not only more than doubled revenue and beat expectations for both revenue and earnings, but also raised its guidance for the rest of its fiscal year. But there's one metric that has kept the stock from performing as well as some of its peers.

*Stock prices used were the morning prices of Sep. 3, 2026. The video was published on Sep. 5, 2026.

Matt Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Matthew Frankel is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

SpaceX (SPCX -1.20%) held its first earnings call as a publicly traded company on Aug. 4, and CEO Elon Musk used it to place the company's largest capital outlay, artificial intelligence (AI) computing, in the hands of a single supplier.

Musk said, "going forward, we've decided to build exclusively on Nvidia because we think the Vera Rubin architecture is the best architecture. We think it's the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia. So, we're exclusive to Nvidia."

Nvidia (NVDA +0.84%) shares closed up 3.4% the next day. Advanced Micro Devices, the closest alternative supplier of graphics processing units (GPUs) for AI, closed down 7% after reporting its own quarterly results that same afternoon.

Nvidia is also a shareholder, with about $21 billion in SpaceX shares at the end of June.

For SpaceX shareholders, the most interesting figure is the bill. What gets locked in by building it with a single supplier?

Image source: The White House.

How much computing capacity does Musk promise?SpaceX's capital expenditures were $18.4 billion in the second quarter, and $15.8 billion of that was allocated to AI computing infrastructure. The AI figure was $7.7 billion in the first quarter and $749 million a year earlier. In other words, the computing line item grew more than 20 times year over year and now absorbs 86 cents of every capital dollar.

CFO Bret Johnsen told analysts to expect the next two quarters to be "very similar to the current quarter" in terms of capital expenditures, probably about $37 billion more this year.

SpaceX ended June with 1.4 gigawatts of installed computing capacity, compared to 1 gigawatt in March and 0.4 gigawatts a year earlier. Musk expects the company to end 2026 with more than 2 gigawatts. And by the end of 2027, he said, the total "may, let's say, be closer to 10 gigawatts of compute than 5 gigawatts of compute."

Under its commitment, every gigawatt built from now on will use Nvidia hardware.

SpaceX has not filed any contractThe 10-Q SpaceX filed on the day of the conference does not mention Nvidia, nor has any subsequent filing.

What it does show is $28 billion in noncancelable purchase commitments at the end of June, of which $22.2 billion mature in 2027, described mostly as AI infrastructure, cloud capacity, and its spectrum purchase.

During the conference, when asked how much confidence he had regarding the chips, Musk said, "our understanding with NVIDIA is that we will receive a very significant percent of their GPUs next year."

Customer contracts, on the other hand, specify Nvidia chips, and I would argue they say more about SpaceX's tie to Nvidia than the commitment does. SpaceX's cloud service agreements with Anthropic cover about 325,000 Nvidia GPUs at $1.25 billion monthly through May 2029. Its agreement with Google, of Alphabet, covers about 110,000 Nvidia GPUs at $920 million monthly from October 2026 through June 2029. Each can be terminated with 90 days' notice after an initial period. And if SpaceX does not deliver the committed GPUs by Sept. 30, Google could walk away after a one-month grace period or pay only for the GPUs delivered.

So SpaceX has sold Nvidia capacity it has not yet finished buying, with delivery dates.

What SpaceX gives up without a second bidA buyer of this size gives up two things.

The first is price. Nvidia's gross margin was 75% in its quarter ended July 26: on average, three-quarters of what customers pay Nvidia is gross profit.

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The second is the timeline. Nvidia said in its quarterly report that it is "currently experiencing certain supply constraints," and Vera Rubin did not begin production shipments until the quarter that started on July 27. SpaceX's 2-gigawatt and 10-gigawatt targets depend on how much a single supplier ships of a product with limited supply.

Terafab, the chip plant that SpaceX is planning with partners, is its hedge against shortages, but the prospectus says there are still no definitive agreements.

Of course, management's answer is that profitability arrives quickly. Johnsen said current cloud economics provide SpaceX with "less than a one-year payback" on new capital allocated to computing, and the company signed contracts for another $6.7 billion in cloud service revenue during the first weeks of the third quarter. If that holds, paying more for the best computer could be the right decision.

But the stock arguably already assumes it will hold. SpaceX's market value sits near $1.9 trillion, with shares around $142 at the time of writing, more than 60 times the revenue a full year would produce at the second-quarter run rate. That price leaves no room for the bill to be larger or arrive later than planned, and SpaceX has committed to building it all on a single supplier's hardware.

Jim Cramer is calling the Magnificent Seven a generational buying opportunity, but the argument only holds for some of them, and getting that distinction wrong is an expensive mistake.

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On September 3, 2026, CNBC’s Jim Cramer told viewers, “we’re witnessing the revenge of the Magnificent Seven, and most people don’t even seem to know it”. His argument, learned at Goldman Sachs, is that everything is a buy at a price, and this group has finally reached it.

The real question is narrower than his framing suggests. These companies are spending fortunes on AI infrastructure, and the market has stopped crediting them for it. Either that capital converts into free cash flow growth, in which case current prices look obvious in hindsight, or the market is correctly pricing capital destruction

Cramer thinks the first. I think he is mostly right about two names, half-right about two, and wrong to lump the last two into the same argument.

Why the Group Fell Out of Favor Cramer said that outside Apple, “Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla have become forlorn losers… perennially disappointing falling way behind the market”. The mechanism is straightforward. Heavy capex depresses free cash flow now in exchange for profits later, and markets discount distant profits harshly when they doubt them.

The numbers make that concrete. Meta Platforms (NASDAQ:META | META Price Prediction) guided 2026 capex to $130-145 billion and free cash flow collapsed to $784 million from $8.55 billion a year earlier. Amazon (NASDAQ:AMZN) posted trailing free cash flow of negative $7.6 billion against $53.1 billion in quarterly capex.

The bet is that these dollars come back multiplied. Andy Jassy said data centers can be monetized for 30-plus years once servers go in. That is a long time to wait for a market fixated on the next quarter, and it is also why the power, cooling, and networking suppliers behind these builds keep showing up in our free report on seven AI infrastructure names that aren’t chipmakers.

Amazon and Alphabet Have the Cleanest Cases Cramer said “Amazon is cheap… Andy Jassy is willing to wreck Amazon’s balance sheet like the old days… because they’re going to make fortunes”. AWS grew 37% year over year to $42.23 billion, its fastest growth in 18 quarters, with backlog at $496 billion. The falsifiable test is whether AWS operating income grows faster than depreciation once these data centers monetize.

Alphabet (NASDAQ:GOOGL) is more interesting. It trades at a trailing P/E of 17x, against Google Cloud’s 82% year-over-year growth. Per the company’s Q2 8-K, revenue rose 24.2%.

Cramer skips the harder question: whether search economics survive AI assistants. My read is that Gemini’s 950 million monthly users and enterprise traction suggest Alphabet is capturing the substitution rather than losing to it. That is worth owning at 16 times earnings.

Meta’s Legal Overhang and the WhatsApp Question Meta’s Q2 included $2.4 billion in legal charges and $1.2 billion in severance from an 8,000-employee reduction. The stock is down 16.88% over the past year.

The WhatsApp claim needs interrogation. An asset is only undervalued if there is a credible monetization path. Family of Apps Other revenue hit $1 billion for the first time, up 73%, driven by WhatsApp paid messaging. That is a real path, though small against the market cap. At 22 times earnings, Meta is priced for the legal overhang to fade, with WhatsApp treated as optional upside rather than a second engine.

NVIDIA and Tesla Don’t Belong in the Same Argument NVIDIA (NASDAQ:NVDA) trades at a forward P/E of 24x after Q2 revenue more than doubled to $96.22 billion. Management guided fiscal 2028 growth of roughly 70% as supply-constrained. Cramer noted the Hugging Face acquisition addresses the perception that NVIDIA is a training-only story. The valuation implies growth ends soon, while the order book points the other way.

Tesla (NASDAQ:TSLA) is a different animal. It is down 16.31% year-to-date, with a trailing P/E of 392x and an operating margin of 4.6%. Grouping seven companies together was always a marketing convenience.

Verdict Cramer said, “the Magnificent Seven finally are cheap compared to the rest of the market, and I think it’s time to buy”. Alphabet and Amazon are the two I would own at these prices. Microsoft (NASDAQ:MSFT) and NVIDIA are fairly valued for what they deliver. Meta requires believing legal costs are one-time. Tesla is a venture bet dressed as a Mag 7 stock.

The falsifiable test is capex converting into free cash flow growth, beyond revenue growth alone, over the next four quarters. If AWS and Google Cloud margins hold while depreciation accelerates, Cramer is right. If they compress, the market was right to look away.

Contact [email protected] for any questions or corrections.

Key Takeaways NVIDIA leads the screen with a 63.7% net profit margin and 93.3% expected earnings growth.BrightSpring Health Services posts a 2.6% net profit margin and 82% expected earnings growth this year. Comfort Systems boasts a 12.8% net profit margin and 60.7% expected earnings growth this year. September has historically been one of the worst-performing months for the U.S. stock market, and this year could see heightened volatility due to rising oil prices, higher Treasury yields and growing uncertainty about the Federal Reserve’s next interest rate decision. Given this backdrop, investors may benefit from adopting a cautious approach and focusing only on those stocks that consistently generate strong profits after accounting for both operating and non-operating expenses. 

Such companies are generally better positioned to withstand unfavorable market conditions than those reporting losses. To assess a company’s profitability, investors often use profitability ratios, which help measure its ability to generate consistent and sustainable earnings. 

On that note, NVIDIA Corporation (NVDA - Free Report) , BrightSpring Health Services, Inc. (BTSG - Free Report) and Comfort Systems USA, Inc. (FIX - Free Report) stand out as the most profitable stocks, supported by strong net income ratios and upside potential.

Why Net Income Ratio Matters to Investors The net income ratio is a key indicator of a company’s overall profitability. It reflects the percentage of net income relative to total sales revenues. Using the net income ratio, one can assess a firm’s ability to cover operating and non-operating expenses with revenues. A higher net income ratio usually implies a company’s ability to generate sufficient revenue and manage all business functions effectively. 

Stock Screening Criteria Used in the Research Wizard The net income ratio is not the only indicator of future winners. So, we have added a few more criteria to arrive at a winning strategy. 

Zacks Rank equal to #1: Whether the market is good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Trailing 12-Month Sales and Net Income Growth Higher than X Industry: Stocks that have witnessed higher-than-industry sales and net income growth in the past 12 months are positioned to perform well. 

Trailing 12-Month Net Income Ratio Higher than X Industry: A high net income ratio indicates a company’s solid profitability. 

Percentage Rating Strong Buy greater than 70: This indicates that 70% of the current broker recommendations for the stock are Strong Buy. 

These few parameters have narrowed the universe of more than 7,685 stocks to only 15.

Here are three of the 15 stocks that qualified for the screening: 

NVIDIA  NVIDIA is a leading AI infrastructure company operating across global markets. NVDA’s 12-month net profit margin is 63.7%. Its expected earnings growth rate for the current year is 93.3% (read more: NVIDIA vs. AMD: Only One AI Stock Is a Solid Buy Now). 

BrightSpring Health Services BrightSpring Health Services provides home- and community-based healthcare services across the United States. BTSG’s 12-month net profit margin is 2.6%. Its expected earnings growth rate for the current year is 82%. 

Comfort Systems  Comfort Systems provides mechanical and electrical installation, maintenance and repair services in the United States. FIX’s 12-month net profit margin is 12.8%. Its expected earnings growth rate for the current year is 60.7%.

Quantum computing may be lurking in the shadow of artificial intelligence (AI), but investors should pay special attention to this field. It has the potential to reshape the computing landscape, and several strong players in this industry could benefit immensely from the rise of quantum computing.

Three that I think are primed to benefit are Alphabet (GOOG -1.17%) (GOOGL -1.17%), IonQ (IONQ +0.64%), and Nvidia (NVDA +0.83%). These are top stocks in this industry, and the time is now to take advantage of them.

Image source: Getty Images.

Why is quantum computing a big deal? Quantum computing is different from traditional computing because it doesn't take a binary path. Traditional computing uses ones and zeros (called bits) to determine outcomes, while quantum computing uses qubits, which are better described as the probability of an answer being a zero or a one.

This allows such machines to consider an endless number of possibilities, making it ideal for nonlinear problems, which include a surprising number of issues. In some situations, quantum computers will be able to complete calculations that would take digital supercomputers billions of years to handle. The systems aren't powerful enough yet, but that's just a matter of time. Ask again in five or 10 years.

Tasks like processing AI, optimizing logistics and delivery networks, and weather prediction are just some of the opportunities that quantum computing could address. The market opportunity is vast, and a projection from the management consultancy McKinsey & Company estimates that the quantum industry could reach $72 billion in annual revenue by 2035. That's a huge chunk of revenue that's currently not in play, and these three stocks are primed to benefit from it.

This trio is a balanced approach to quantum computing With how lucrative the technology is, it should come as no surprise that countless competitors are pursuing it. However, they tend to broadly break into two categories: legacy tech companies and upstarts. The legacy big-tech companies have vast resources to spend on this technology, and being able to produce a viable quantum computer could boost offerings like cloud computing.

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1. Alphabet My top pick in this category is Alphabet because it has committed significant resources to the technology. The company is already delivering some breakthroughs.

Its Willow quantum chip has produced impressive results, such as running its Quantum Echoes algorithm, which provides a verifiable advance over traditional computing hardware. Management says this is a sibling of the technology used for magnetic resonance imaging and could enable real-world applications in the near future.

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2. IonQ The upstart side is fairly crowded, and these companies are all-or-nothing bets on producing viable quantum hardware. They have often partnered with governments, companies, and universities to help fund their research and operations. Otherwise, they wouldn't be able to operate because they have no core business like the legacy tech players do to fund their research.

My top pick in this segment is IonQ because of the unique path it is taking. Instead of choosing a superconducting approach, like most companies are, it's using an ion trap, which makes for more accuracy. It holds the world record for the most accurate quantum computer so far. With accuracy being one of the biggest hurdles quantum computing companies face, I think this makes IonQ a top pick in the quantum space.

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3. Nvidia Last is Nvidia, which has already stated that it's not pursuing a quantum computer. Still, it is providing interface options so that such machines can plug into existing traditional computing networks for a hybrid approach.

Nvidia has also launched various tools to support the new technology, ensuring that if quantum computing becomes a major part of the industry, this hybrid approach will likely use the company's hardware. That keeps Nvidia's current business intact, and with a huge AI demand boost, it's also a top AI stock pick.

The Investment Committee debates the return of the Mag 7 and share their top strategies with those names.

"Nvidia (NVDA) is not the only player in town" for AI chipmakers, says Andy Swan with LikeFolio. The company continues to gain momentum in consumer interest and demand, though competitors like AMD Inc. (AMD), Broadcom (AVGO), and even Intel (INTC) are catching up to the Mag 7 giant.

Thinking Machines Lab is discussing a funding round at a valuation of at least $40 billion Summary

Nvidia is reportedly considering an investment of about $2.5 billion

Nvidia Corp. (NVDA, Financials), the dominant supplier of artificial intelligence chips, could put roughly $2.5 billion into Mira Murati's Thinking Machines Lab as it expands its reach beyond selling hardware.

Thinking Machines is in talks to raise between $5 billion and $6 billion at a valuation of at least $40 billion before the new investment, according to The Information.

Nvidia is expected to provide roughly half of that capital. The potential deal would deepen an already close relationship.

In March, Nvidia and Thinking Machines announced a multiyear partnership to deploy at least 1 gigawatt of next-generation Vera Rubin systems. The first deployment is targeted for early next year. That makes the investment strategically different from a typical venture bet.

Nvidia would be helping finance an AI company that has already committed to deploying its infrastructure at enormous scale. The arrangement could strengthen future demand for Nvidia systems while giving Thinking Machines access to the computing capacity needed to build and serve advanced AI models.

The talks also come just after Nvidia agreed to acquire open-source AI platform Hugging Face for $12.93 billion, another move that extends the company deeper into the software and developer side of the AI market.

The next catalyst is whether Nvidia and Thinking Machines finalize the funding round and disclose how the investment fits into their existing gigawatt-scale partnership.

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.

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It's normal for companies to offer guidance about the revenue they expect in the current year, but investors rarely receive two-year outlooks from companies. Nvidia (NVDA +1.13%) just broke that convention, with CFO Colette Kress telling analysts on its fiscal 2027 Q2 earnings call that Nvidia expects to deliver 70% year-over-year revenue growth in its fiscal 2028.

Kress also said that the 70% figure reflects supply constraints, and that absent the bottlenecks in the supply chain, its revenue could actually more than double year over year in fiscal 2028.

Although it would be easy to get excited about such a forecast, investors also have to assess the likelihood of it being achieved. Surprisingly, Nvidia has a shot at doubling its sales yet again.

Image source: Getty Images

Amazon boosts its chip orders Amazon (AMZN -1.09%) is one of Nvidia's top customers, and its recent order of 2 million GPUs (graphics processing units) to be delivered across 2027 and 2028 adds credibility to the 2028 forecast.

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Nvidia's powerful new Vera Rubin architecture, which includes both CPUs and GPUs, has started to ship, and its sales acceleration will start to show up in Nvidia's fiscal 2028 (which will begin Jan. 31, 2027).

Amazon and other tech giants expressed their excitement about the Vera Rubin platforms when Nvidia announced its kickoff in a January press release.

"Rubin will remind the world that Nvidia is the gold standard," Elon Musk said in the press release.

It isn't just Nvidia. Samsung (SSNLF +0.00%) has locked in contracts for 70% of its memory chip capacity through 2031 thanks to key partnerships. A strong memory market with multiyear revenue visibility is also good for Nvidia, since its GPUs are the foundation of the AI boom.

Nvidia is still doubling its sales It's not easy for any company to double its revenue year over year, but it's more difficult for giants that have already taken dominant shares of their core markets.

Nvidia is in that position. The entire world knows about the company's chips, and most of its sales come from the same few hyperscalers. Despite its commanding market position and sheer sales volume, the company still managed to more than double sales year over year in its fiscal 2027 second quarter, which ended July 31.

That was actually a revenue growth acceleration for a company so massive that it would be natural to expect it to have matured and settled down to low growth rates. Nvidia's revenue increased by 65% in its fiscal 2026, and sales were up by 85% year over year in its fiscal 2027 first quarter.

The 106% growth rate in its fiscal 2027 second quarter is a meaningful jump. Vera Rubin platforms are still ramping up into full production, and their sales will start to show up more meaningfully in future results. In the meantime, Nvidia's fiscal 2027 third-quarter guidance implies 12% sequential growth at the midpoint.

Strong financial results, recent growth acceleration, and the Vera Rubin rollout suggest that Nvidia can hit its ambitious target of 70% year-over-year revenue growth in its fiscal 2028.