Amplius Wealth Advisors LLC grew its position in NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 24.9% during the 2nd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 15,145 shares of the computer hardware maker’s stock after purchasing an additional 3,017 shares during the quarter. Amplius Wealth Advisors LLC’s holdings in NVIDIA were worth $3,030,000 as of its most recent SEC filing.
Other large investors also recently made changes to their positions in the company. Norges Bank bought a new stake in shares of NVIDIA in the fourth quarter valued at about $62,244,133,000. J. Stern & Co. LLP grew its position in NVIDIA by 13,709.1% during the fourth 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 position in NVIDIA by 896.4% during the fourth quarter. Cardano Risk Management B.V. now owns 78,123,960 shares of the computer hardware maker’s stock worth $14,570,119,000 after buying an additional 70,283,539 shares in the last quarter. Capital Research Global Investors increased its stake in NVIDIA by 16.1% during 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 acquiring an additional 22,896,705 shares during the period. Finally, Laurel Wealth Advisors LLC raised its holdings in NVIDIA by 15,496.1% in 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 acquiring an additional 21,725,326 shares in the last quarter. Institutional investors own 65.27% of the company’s stock.
Key NVIDIA News Here are the key news stories impacting NVIDIA this week:
Positive Sentiment: Hugging Face acquisition: NVIDIA agreed to acquire open-source AI platform Hugging Face for approximately $12.93 billion. The deal could strengthen CUDA adoption, improve developer retention and give NVIDIA a larger role in AI model development and deployment beyond selling chips. Nvidia to buy Hugging Face for nearly $13 billion Positive Sentiment: Growth outlook remains strong: NVIDIA’s recent quarterly results exceeded expectations, with $96.22 billion in revenue and $2.22 in EPS. Management’s roughly 70% fiscal 2028 revenue-growth outlook was materially above consensus, reducing concerns that AI demand is rapidly decelerating. Nvidia: The Market Is Crazy Not To Push The Stock Higher Positive Sentiment: Customer spending validation: Dell Technologies’ stronger guidance and expanding AI-server demand reinforced NVIDIA’s view that enterprise and hyperscaler capital expenditures remain elevated. NVIDIA also announced that Lenovo and Acer will launch RTX Spark AI PCs in October, extending its reach into client computing. Nvidia sets October launch for RTX Spark AI PCs Positive Sentiment: Broader AI ecosystem exposure: Partnerships with Equinix and Together AI on enterprise inference, plus a reported $6 billion GPU deployment connected to humanoid-robotics company Figure, point to additional demand for NVIDIA’s platforms in inference and physical AI. Nvidia lands surprise $6B GPU windfall with Figure Neutral Sentiment: Strategic execution will be closely watched: The Hugging Face transaction is intended to preserve an open developer ecosystem, but NVIDIA must integrate the platform without undermining its neutrality or causing developers to migrate elsewhere. The acquisition also comes as cloud providers continue developing custom AI chips. Negative Sentiment: Margin pressure: Rising memory and networking costs are expected to weigh on gross margins, even though they reflect supply constraints and strong demand. Investors are monitoring whether NVIDIA can maintain profitability above 70%. Memory Costs Rise: Can NVIDIA Protect Its 70% Gross Margin? Negative Sentiment: Insider selling and policy risks: Executives and directors recently sold shares, including a Rule 10b5-1 sale by EVP Timothy Teter. Possible U.S. semiconductor tariffs and elevated interest rates remain additional risks to valuation and global supply chains. Analysts Set New Price Targets NVDA has been the subject of a number of recent analyst reports. Oppenheimer set a $315.00 target price on NVIDIA and gave the company an “outperform” rating in a research report on Thursday, August 27th. Jefferies Financial Group reaffirmed a “buy” rating on shares of NVIDIA in a research note on Wednesday, August 26th. Melius Research set a $420.00 price objective on shares of NVIDIA in a research report on Thursday, August 27th. Wells Fargo & Company reiterated an “overweight” rating and set a $315.00 price objective on shares of NVIDIA in a research note on Tuesday, August 11th. Finally, Morgan Stanley set a $300.00 target price on shares of NVIDIA and gave the company an “overweight” rating in a report on Thursday, August 27th. Two equities research analysts have rated the stock with a Strong Buy rating, fifty have given a Buy rating and three have issued a Hold rating to the company. Based on data from MarketBeat, NVIDIA has a consensus rating of “Moderate Buy” and a consensus target price of $324.23. Read Our Latest Analysis on NVIDIA
Insider Activity at NVIDIA In related news, EVP Timothy S. Teter sold 30,000 shares of the stock in a transaction that occurred on 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 of the company’s stock, valued at $585,587,360.80. This represents a 1.10% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Mark Stevens sold 885,000 shares of the firm’s stock in a transaction that occurred on Thursday, June 18th. The shares were sold at an average price of $210.17, for a total transaction of $186,000,450.00. Following the completion of the sale, the director owned 5,207,271 shares in the company, valued at $1,094,412,146.07. This represents a 14.53% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 1,563,501 shares of company stock valued at $335,380,530. 3.94% of the stock is owned by insiders.
NVIDIA Stock Performance NASDAQ:NVDA opened at $228.45 on Friday. The stock’s 50-day simple moving average is $209.85 and its 200 day simple moving average is $201.85. The firm has a market capitalization of $5.51 trillion, a PE ratio of 28.88, a price-to-earnings-growth ratio of 1.76 and a beta of 2.22. The company has a quick ratio of 3.85, a current ratio of 4.59 and a debt-to-equity ratio of 0.14. NVIDIA Corporation has a twelve month low of $164.07 and a twelve month high of $236.54.
NVIDIA (NASDAQ:NVDA – Get Free Report) last issued its earnings results on Wednesday, August 26th. The computer hardware maker reported $2.22 EPS for the quarter, topping the consensus estimate of $2.09 by $0.13. The firm had revenue of $96.22 billion during 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 quarterly revenue was up 105.9% on a year-over-year basis. During the same quarter in the previous year, the firm earned $1.05 earnings per share. On average, analysts anticipate that NVIDIA Corporation will post 9.1 EPS for the current fiscal year.
NVIDIA Dividend Announcement The business also recently disclosed a quarterly dividend, which will be paid on Thursday, October 1st. Investors of record on Thursday, September 10th will be given a dividend of $0.25 per share. This represents a $1.00 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date is Thursday, September 10th. NVIDIA’s dividend payout ratio is currently 12.64%.
NVIDIA declared that its Board of Directors has initiated a share repurchase plan on Wednesday, May 20th that allows the company to repurchase $80.00 billion in shares. This repurchase authorization allows the computer hardware maker to buy up to 1.5% of its stock through open market purchases. Stock repurchase plans are generally an indication that the company’s board of directors believes its shares are undervalued.
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.
Recommended Stories Five stocks we like better than NVIDIA The Path to $230 Billion: Broadcom Outlines the Next Phase of Its AI Growth Story NVIDIA’s Hugging Face Deal Raises a Bigger Question About Its AI Moat Now Dropping the Dough: Yum! Brands Strategically Trims the Fat These 3 Stock Charts Just Flashed the Dreaded Death Cross Pattern
Receive News & Ratings for NVIDIA Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for NVIDIA and related companies with MarketBeat.com's FREE daily email newsletter.
The platform stays open, so Nvidia is paying for developer proximity--not guaranteed hardware lock-in. Summary
Nvidia is buying distribution at the model layer while preserving customer choice.
Nvidia NVDA, the artificial-intelligence chip king, is pushing far beyond hardware with its $12.93 billion acquisition of Hugging Face. The deal equals roughly 13.4% of Nvidia's latest quarterly revenue. Investors will receive $11.9 billion, while as much as $1 billion will go toward keeping critical employees. Nvidia is not buying another AI brand. It is buying the front door used by millions of developers.
Hugging Face reaches more than 18 million developers, researchers and creators across 200,000 companies. The platform hosts over three million models, 500,000 datasets and one million applications. It will remain open, meaning users can continue choosing rival models, frameworks and computing systems. That freedom protects the platform's popularity. It also raises the stakes: Nvidia must steer more workloads toward its ecosystem without turning an open community into a walled garden.
Nvidia generated $96.2 billion in second-quarter revenue, with data centers delivering a massive $89 billion. Hugging Face now puts Nvidia closer to developers before they choose the chips and infrastructure powering their projects. The GF Score of 95 out of 100 flashes serious operating strength, led by exceptional profitability and growth, strong financial health and solid momentum—although the weaker GF Value rating warns that the market already recognizes much of that power. Nvidia has conquered the hardware layer. This deal is its bid to control where the next AI workload begins.
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.
One number buried in NVIDIA's latest earnings report tells you everything about whether this company has real pricing power or just a lucky streak, and most investors scroll right past it.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
I keep hitting the buy button on NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) because of one number that most casual readers scroll past: 75%. That is the non-GAAP gross margin the company just printed in Q2 FY27, and it is the tell.
Companies with pricing power hold gross margins as they scale. NVIDIA is doing exactly that at a size that used to be considered structurally impossible for a hardware business. Revenue reached $96.22 billion in a single quarter, up 105.85% year over year, and the margin held. CFO Colette Kress even conceded memory costs are rising and “headed even higher into next year”, yet management still guided “74%, plus or minus 50 basis points” for Q3 and told analysts gross margins settle at “72% to 73% in fiscal year 28 as executed price increases take effect”. Executed price increases. That is what pricing power sounds like on a conference call.
Three Reasons I Keep Adding to My Position First, the Data Center engine. Segment revenue hit $89.02B, up 117% year over year, with Networking growing 138%. Jensen Huang said “NVIDIA Compute is fully utilized across every cloud we serve”, and the top five hyperscalers are lining up “nearly 800 billion in 2026” and “1.3 trillion in 2027” in capex behind that demand. All of that spend has to be powered, cooled, and networked by somebody, and we profiled seven of those non-chipmaker suppliers in a free report.
Second, the balance sheet does the talking. Return on invested capital of 92.2%, debt-to-equity of 0.073, and free cash flow of $21.34B in one quarter. Management returned $26.0B to shareholders in Q2 and still sits on roughly $99.0B of remaining buyback authorization.
Third, forward visibility I can price. Supply obligations climbed to $279.0B, most of it memory for Vera Rubin, and Kress called those commitments “essential for the raising of Vera Rubin today, as well as all next year”. Management guided “approximately 70% in fiscal 2028” revenue growth and said that number is constrained only by supply.
How NVIDIA Stacks Up Against AMD and Intel The two names retirement-focused readers reach for in AI and semis are Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC). My money keeps going to NVIDIA because the receipts here are on a different plane: a 60.38% operating margin, 75.4% return on assets, and a fully-utilized installed base across every major cloud are the outputs of a durable platform advantage that transcends any single product cycle. Huang put it plainly: “NVIDIA’s architecture runs every model”. Until a rival can show comparable operating economics at this scale, my capital stays here.
One Risk I Am Watching Closely The thing that could actually hurt me is the flip side of that $279.0B supply commitment. If hyperscaler capex softens, NVIDIA is on the hook for memory it has already agreed to buy. I hold the position because Kress described the platform as “fungible and durable and can be redeployed to support other customers”, and because “Cloud industry backlog now greater than 2 trillion” sits behind the order book. Real risk, priced in, thesis intact.
What Keeps the Buy Button Active At $228.45, a P/E of 46, and a company compounding free cash flow at this rate, I keep buying because compute is now revenue, and NVIDIA sells the compute.
Contact [email protected] for any questions or corrections.
You are now leaving Barron's websiteBy clicking on the “Proceed” button below, you will be redirected to a third-party website owned and operated by Hong Kong Tiimoot Information Technology Co., Limited. (“HKT”), which is located in Hong Kong. That website operates independently from Barron's and Barron's does not control the website. The privacy practices of HKT are subject to its Privacy Statement, so please read it closely. We are not responsible for HKT's privacy or other data-related practices.
Despite being far more recent than the short position, Michael Burry’s bullish bet on Nvidia (NASDAQ: NVDA) stock appears to already be paying off thanks to the semiconductor giant’s strong rally after the earnings.
Specifically, the legendary ‘Big Short’ investor acquired call options for the blue-chip chipmaker as a hedge ahead of the company’s August 26 earnings. On the day, NVDA shares closed at $209.66, and they met the September 3 evening bell at $228.45: 8.96% higher.
Additionally, Nvidia stock rose another 1.18% in the latest extended session and is trading at $231.15 at press time on Friday.
Under the circumstances, investors who took Burry’s decision to create a hedge as a strong ‘buy’ signal and purchased $1,000 worth of the equity would, by the morning of September 4, have $1,102.50: a $102.50 profit.
Nvidia stock price performance in the last month and since August 26. Source: Google The speed of the latest rally is further underlined by the fact that traders who made a long bet of the same size at the start of 2026 would have $1,223.99, indicating that nearly half of the potential NVDA investment profits came in less than 10 days.
Notably, neither the decision to buy Nvidia stock call options nor the latest NVDA rally changed Michael Burry’s bearish attitude toward the semiconductor giant and the artificial intelligence (AI) ‘boom’.
Why Michael Burry has not turned bullish on Nvidia stock Indeed, though the ‘Big Short’ trader’s bet against the blue-chip maker started last year, he seemingly turned even more pessimistic regarding the equity by mid-August, when he claimed to have identified ‘echoes of Enron’ in the company.
At the time, Burry highlighted Nvidia’s announcement about a series of memorandums of understanding (MoU) with a set of high-profile investment banks as little more than a ploy to obfuscate growing risks surrounding the company.
The rising costs to insure the firm’s debt were a focal point, though multiple uncertainties with the company’s accounting exacerbate the issues.
For example, the late August earnings – despite disclosing undeniably strong results – also led to questions about clients being permitted to postpone their payments by up to 12 months, as well as the severe customer concentration in accounts receivable balance.
Even more recently, Nvidia’s acquisition of Hugging Face appears to have at least partially undermined the goal of the MoUs – to dispel circular financing concerns – since it appears to confirm that there are vanishingly few actors in the supposedly global AI ‘boom.’
Furthermore, the MoUs – announced as made to secure $500 billion for AI infrastructure – could truly prove more of an obfuscation method, as Burry posited, considering they are not final and might easily come to naught.
Crucially, Nvidia’s $100 billion plan to invest in OpenAI in late 2025 was disclosed with a similar disclaimer regarding follow-through and was, indeed, ultimately quietly dropped.
Best Crypto Exchange for Intermediate Traders and Investors
Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.
0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
Copy top-performing traders in real time, automatically.
eToro USA is registered with FINRA for securities trading.
30+ million Users worldwide
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD
Join Finbold's newsroom, become a Sales Executive today! Apply now to join Finbold as a crypto/finance news writer!
Nvidia stock has jumped and is nearing its all-time high as the company slowly evolves into becoming the central bank of the AI industry, thanks to its huge investments. NVDA jumped to $230, a few points below its all-time high of $236, and this growth may continue as the AI boom continues.
Jensen Huang has become the biggest investor in the AI industry, with the company using its windfall to invest in the biggest and most promising firms in the sector.
The company has become the fourth-biggest investor in Intel after BlackRock, Vanguard, and State Street, with a $19.6 billion stake. It has invested in other publicly traded companies like CoreWeave, Nebius, IREN, SpaceX, Lumentum, Coherent, and Synopsys.
In addition to this, it invested in Mistral AI, Nscale, Firmus, Fireworks AI, Lambda, OpenAI, Anthropic, and Nokia. The company is said to be mulling a $2.5 billion investment in Thinking Machines, a company started by Mira Murati that is building open-source AI models.
Just this week, it chucked $13 billion in Hugging Face, a company in the open-source sector.
Nvidia has made other big investment announcements. It will provide OpenAI with the financial backstop in its large data center project in Ohio. This center will use Nvidia chips, a notable thing since OpenAI has developed Jalapeno, its highly competitive chip.
Nvidia has also created a consortium of banks and private credit companies that will provide $500 billion investment in companies in the AI industry. Companies in the AI space will be able to access these funds and buy Nvidia chips.
These announcements, however, have led to concerns about circular investments, a situation where a company invests in its customers, which uses the resources to buy its products.
READ MORE: Nvidia stock analysis: top reasons why the shares may go parabolic soon
The most recent earnings report showed that the company has the resources it needs to fund these investments. Its most recent results showed that its revenue jumped to $96 billion in the second quarter.
The company predicted that its third-quarter revenue will be $108 billion and that the annual revenue will be over $411 billion. Historically, the company has a record of beating analysts' estimates. This means that its annual revenue will jump to over $420 billion this year.
The company also predicted that its business will continue doing well next year, with the annual figure expected to grow by 70%. Analysts were expecting the company’s growth to be about 40%.
Most notably, the company is highly undervalued, with its forward price-to-earnings ratio of 24, slightly higher than the sector median of 22, and the five-year average of 42.
NVDA stock chart | Source: TradingView
The weekly chart shows that the NVDA stock price has been in a strong upward trend in the past few months. It has remained above the ascending trendline that connects the lowest level in April 2025, March 2026, and July this year.
NVDA stock has remained above the 50-week and 100-week moving averages, a sign that bulls remain in control. It has also remained above the Supertrend indicator.
Therefore, the most likely scenario is where the stock may continue rising, with the next key resistance level to watch being at $250. A move above that resistance will lead to more gains, towards $300.
Nvidia (NVDA +1.80%), Apple (AAPL +1.00%), and Alphabet (GOOGL +1.59%) (GOOG +1.59%) are the three most valuable companies in the world and dominate the S&P 500 with a combined 20.4% weighting. So buying the Vanguard S&P 500 ETF (VOO +1.04%), which tracks the index, is a straightforward, low-cost way to invest in such mega-cap tech stocks -- especially considering the ETF has a 0.03% expense ratio, or just three cents for every $100 invested.
However, investors looking for outsize exposure to Nvidia and Alphabet may want to consider the Vanguard Russell 1000 Growth ETF (VONG +1.31%) instead of the Vanguard S&P 500 ETF. The growth ETF is based on the Russell 1000 index -- which includes the 1,000 largest U.S companies by market capitalization.
Here's why Nvidia and Alphabet are great buys now, and why the Russell 1000 Growth ETF is so heavily invested in them.
Image source: Getty Images.
Earnings-driven growth stories Despite being completely different businesses, Nvidia and Alphabet have similar investment theses. Nvidia is growing revenue rapidly and maintaining high margins as it returns boatloads of free cash flow (FCF) to shareholders through buybacks and a 2,400% increase in its dividend. It just reported second-quarter fiscal 2027 results, with revenue more than doubling year over year. And already, Nvidia is forecasting a 70% increase in fiscal 2028 revenue despite increasingly difficult comps from fiscal 2027.
Nvidia has transformed into a high-margin cash cow and is no longer a growth stock valued entirely on what it could do years from now. Rather, Nvidia has grown into its valuation because it has transformed into the second most profitable company in the world -- right behind Alphabet and ahead of Amazon, Microsoft, Apple, and Saudi Arabian Oil.
GOOGL Net Income (TTM) data by YCharts
Alphabet is also generating consistent growth even as it invests aggressively in artificial intelligence. Its FCF has declined due to higher spending, but Alphabet is unique in that it has exposure to multiple links along the artificial intelligence (AI) value chain. Alphabet has Google Search, the Gemini frontier models, Google Cloud, YouTube, Android, Google Pixel and other devices, Waymo, is a leader in quantum computing, and more. In this vein, it remains a balanced bet on AI, with exposure to AI infrastructure, generative AI, agentic AI, and edge AI through use cases like self-driving cars.
In addition to their profitability and high gross margins, Nvidia and Alphabet are similar in that they are compelling values, with Nvidia trading at a forward price-to-earnings ratio of 23.8 and Alphabet at just 16.5.
NASDAQ: VONGVanguard Scottsdale Funds - Vanguard Russell 1000 Growth ETF
Today's Change
(
1.31
%) $
1.64
Current Price
$
127.07
A growth ETF unlike any other Nvidia and Alphabet check the boxes of excellent growth stocks to buy now because they have industry-leading, high-margin business models and aren't overpriced. They are also by far the largest holdings in the Vanguard Russell 1000 Growth ETF, with Nvidia at 14.5% and Alphabet at 11.7% -- significantly higher than Apple's 7.5% weighting, even though Apple has a higher market cap than Alphabet.
The reason Nvidia and Alphabet are so highly weighted is because of the unique way FTSE Russell classifies components of the Russell 1000 Growth index and the Russell 1000 Value index. Some stocks -- like Nvidia, Alphabet, Broadcom, Tesla, Micron Technology, and Advanced Micro Devices -- are pure-play growth stocks, whereas Berkshire Hathaway, JPMorgan Chase, ExxonMobil, and Johnson & Johnson are pure-play value stocks. However, some key components like Amazon, Apple, Microsoft, and Meta Platforms are holdings in both indexes.
This split causes the Vanguard Russell 1000 Growth ETF to have outsize positions in mega-cap companies classified solely as growth stocks -- such as Nvidia and Alphabet. As you can see in the following table, some noteworthy pure-play growth stocks have roughly double the weighing in the Vanguard Russell 1000 Growth ETF than the Vanguard S&P 500 ETF.
Company Weighting
Vanguard Russell 1000 Growth ETF
Vanguard S&P 500 ETF
Nvidia
14.5%
7.6%
Alphabet
11.7%
5.9%
Broadcom
5.6%
2.9%
Micron
2.9%
1.4%
Tesla
2.8%
1.4%
AMD
2.4%
1.2%
Data source: Vanguard.
A dynamic growth ETF with low fees The Vanguard Russell 1000 Growth ETF is a good buy for investors looking for outsize exposure to Nvidia, Alphabet, and semiconductor stocks. The ETF charges a 0.06% expense ratio, which is still dirt cheap, since that's just 60 cents per $100 invested.
However, investors should be aware that the Russell 1000 Growth index's semi-annual reconstitution could dramatically shake up the ETF's composition if the index decides that Nvidia and Alphabet should have split weightings in both the growth and value indexes. If that were to happen, they would lose their dominant weightings in the Vanguard Russell 1000 Growth ETF.
Add it all up, and the Russell 1000 index's split methodology makes the Vanguard Russell 1000 Growth ETF a good buy for investors targeting today's leading growth stocks rather than companies whose rapid growth periods may be in the rearview.
JPMorgan Chase is an advertising partner of Motley Fool Money. Daniel Foelber has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, JPMorgan Chase, Meta Platforms, Micron Technology, Nvidia, Taiwan Semiconductor Manufacturing, Tesla, and Vanguard S&P 500 ETF. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
NVDA has just announced one of their largest (potential) deals ever concerning Hugging Face. Investors are left wondering if NVDA will manage to generate value with that deal, because it seems to be overpaying with a $12.9B purchase price. NVDA's Q2 2027 results delivered over 100% top-line growth, 66.2% operating margin, and robust free cash flow, enabling record $26B shareholder returns.
Key Takeaways Nvidia agreed to acquire Hugging Face for $12.9 billion, one of its largest acquisitions.Hugging Face has 18 million-plus users, 3 million models and over 200,000 companies.The deal aims to expand Nvidia's AI ecosystem and drive computing demand. NVIDIA Corporation (NVDA - Free Report) made a major move in artificial intelligence (AI) on Thursday, agreeing to acquire Hugging Face for $12.9 billion. The transaction ranks among Nvidia’s largest acquisitions and strengthens its position beyond AI chips and into the rapidly expanding open-source AI ecosystem. Nvidia’s shares gained 1.8% in the session, following the announcement.
Hugging Face Strengthens Nvidia’s AI EcosystemHugging Face operates a widely used platform where developers and companies can access, share and deploy open-source AI models, datasets and applications. The platform has more than 18 million developers, researchers and creators, over 3 million models and more than 200,000 companies using its services. Nvidia said Hugging Face will remain an open platform, allowing developers to choose their preferred models, frameworks, cloud providers and computing hardware.
The deal represents a strategic effort by Nvidia to strengthen its AI ecosystem as major customers, including cloud and technology giants, increasingly develop their own AI chips. Open-source models can also offer lower-cost alternatives to proprietary AI systems, potentially accelerating adoption among businesses and developers. By controlling a major AI development platform, Nvidia could create additional demand for its computing infrastructure while broadening its customer base.
Deal Expected to Close in 2027Under the agreement, approximately $11.9 billion will be paid to Hugging Face shareholders, while Nvidia will provide up to $1 billion in equity-based retention incentives for employees. The transaction is expected to close in the first half of 2027, subject to regulatory approvals and other customary conditions.
Comparison With PeersNvidia, which currently boasts a Zacks Rank #1 (Strong Buy), is part of the Zacks Semiconductor - General industry. NVDA’s shares have surged 22.5% year to date compared with 26% growth for the industry. Intel Corporation (INTC - Free Report) and Texas Instruments Incorporated (TXN - Free Report) , two of NVDA’s peers from the same industry, have gained 148.5% and 46.3% in the same period, respectively. While INTC carries a #3 (Hold), TXN has a #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bottom LineNvidia’s Hugging Face acquisition signals an aggressive push to dominate not only AI hardware but also the software and developer ecosystem powering the next generation of AI.
Jim Cramer called it both offensive and defensive, but the two halves of the Hugging Face deal are not equally interesting, and the one that actually moves the stock is the one Jensen Huang left out of his press tour…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) acquired Hugging Face to control where open-source AI models get built and shared. Models developed on that platform will be tuned to run best on NVIDIA silicon, and that is the entire strategic argument. Jim Cramer walked through the logic with David Faber on CNBC on September 3, 2026, calling the deal both offensive and defensive. He is right, although the two halves are not equally interesting.
Shares finished the session at $228.45, up 1.8% on the day, extending a 22.64% year-to-date advance. The market treated a $13 billion outlay as insurance on the moat rather than an act of desperation.
What NVIDIA Actually Bought Hugging Face is a repository and community for open-source machine learning. Developers publish model weights, datasets, and evaluation scripts there, and other developers pull them down to fine-tune or deploy. It is where Llama variants, Mistral checkpoints, and thousands of smaller open models get discovered and distributed.
Owning a distribution hub is strategically different from owning another fab or a software license. A fab produces a scarce good. A license collects rent. A hub shapes which technical choices become defaults. If reference implementations, tutorials, and one-click deployment templates all assume CUDA and NVLink, the open ecosystem takes shape to fit NVIDIA hardware.
Jensen Huang framed the purchase in terms of open access. He told CNBC that “Our fundamental goal is just to make sure that AI advances as quickly as possible. And it’s really, really important right now as the open models are really accelerating that we make sure that we provide Hugging Face the platform to continue to scale and for the resource for them to scale and extend the open model ecosystem and community.”
That framing is technically accurate and commercially incomplete. A company positioning itself as an enabler of open models still benefits most when those models are optimized for its own silicon. Both statements can hold at the same time. The second one is what drives the share price.
Cramer’s Asymmetry Point The sharpest observation in the segment was about how the market prices this deal versus how it would price the identical deal from a rival. Jim Cramer said, “If AMD were announced, they were buying Hugging Face, if Broadcom announced they were buying Hugging Face, we would send NVIDIA down. So you got to think of it like that. It’s a little asymmetrical.”
He is describing a premium the market has extended to NVIDIA because every prior strategic move has compounded. Q2 FY2027 revenue of $96.22 billion, up 105.8% year over year, and Data Center revenue of $89.02 billion, up 117%, are the reason the benefit of the doubt still runs one way.
Whether that premium is earned or habitual is the real question. My view: it is earned for now, because the company keeps producing the evidence. The habit only breaks when leading open models on Hugging Face start shipping optimized for a competitor first.
Defensive Half and the Buyback Custom silicon is the genuine threat. When a hyperscaler designs its own inference chip, it is trying to strip NVIDIA’s margin off a large, predictable workload. Amazon’s Trainium is already disclosed as a multibillion-dollar business, and Google TPU has been in production for years.
Owning Hugging Face is a defense against that. If the developers who tune open models continue to prioritize CUDA, the custom chips underperform on the workloads people actually deploy. Advanced Micro Devices (NASDAQ:AMD) is the most obvious loser if that dynamic holds. That is a subtle form of lock-in, and it requires no supply contract.
Jim Cramer also referenced the $1 trillion buyback while praising Huang’s execution. With $99 billion remaining under repurchase authorization at the end of Q2 FY27, capital return has runway most software companies would envy.
Meanwhile, CNBC noted that Broadcom (NASDAQ:AVGO) issued soft fourth-quarter guidance alongside strong AI chip demand. That is a reminder that custom-silicon revenue is lumpy even in a booming end market. NVIDIA’s platform revenue stays steady across quarters.
Verdict and the Falsifiable Test The price is defensible. NVIDIA earned $59.69 billion in net income last quarter alone, so this is a rounding error in cash and a meaningful move in strategy. Analysts have an average target of $325.99, well above where the stock trades, and forward estimates continue to drift higher, with the FY2028 EPS consensus at $13.13. See the deal terms in NVIDIA’s most recent 8-K filing for the operational context.
The test is specific and falsifiable. If the next wave of leading open models on Hugging Face ships optimized for AMD MI or a custom hyperscaler chip first, with CUDA support arriving weeks later, this deal will have failed at its core purpose. That is the concrete thing to watch.
Until that happens, the offensive-and-defensive read holds. NVIDIA bought the distribution layer for open-source AI, and the shareholder value sits in the competitor announcements that never occur because of it. Finding the next company with that kind of compounding advantage is its own exercise, and we studied what those winners looked like early in a free playbook here.
Contact [email protected] for any questions or corrections.
David Fetherstonhaugh believes investors in the AI trade have become more selective. Corners of the market he makes bull cases for: AI memory and cybersecurity.
Goldman Sachs says the AI spending cycle is just getting started, but the stocks that made investors rich in the last leg may not be the ones that do it in the next one. Knowing which part of the stack…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Luke Barrs, Chief Business and Client Officer for Fundamental Equities at Goldman Sachs Asset Management, went on CNBC this morning and made two arguments that most viewers will only half-hear. The first is that the AI capital spending cycle is closer to a beginning than a peak, because the American economy is shifting from consumer-led growth to corporate capex-led growth. The second, which matters more if you already own the winners, is that the market has turned selective and leadership is rotating away from the names that carried the last leg.
Both can be true. You can be right about AI as a multi-year force and still own the wrong part of it. That is the tension worth sitting with, because the stocks that turned every dip into a bid over the last two years, NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) chief among them, are no longer the only place the earnings story is showing up.
Capex Is Now the Growth Engine Barrs framed it plainly: “The backdrop we see for equities is still constructive. It’s part of this transition we’re seeing especially in the US away from a consumer led economy to one that is very much corporate capex led.”
Capital expenditure is what companies spend to build the productive base of the business, meaning data centers, fabs, power, and networking gear. When hyperscalers such as Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG, NASDAQ:GOOGL), and Meta (NASDAQ:META) keep revising their spending plans upward rather than flat, that flows directly into supplier revenue.
NVIDIA said on its August 26 call that the top five hyperscalers are expected to reach nearly $800 billion in 2026 and $1.3 trillion in 2027 in capex, with the cloud industry backlog exceeding $2 trillion.
A capex-led economy behaves differently from a consumer-led one because those budgets are committed further in advance and unwind slowly. The other edge is that budgets committed in advance are also harder to reverse if returns disappoint.
Headline Growth vs. Organic Growth Barrs cited US “Earnings 50% year on year” before offering the adjustment: “But even when you strip out some of that noise, it’s still looking like 25 to 30% organic growth in a lot of these areas. That is a hugely positive statement.”
The 50% figure is inflated by tariff refunds and accounting effects. Volunteering the adjusted figure rather than the flattering headline is worth crediting.
Barrs works for a firm with an obvious commercial interest in investors staying in equities, and readers should weigh that. Even so, the adjusted figure sits well above long-run averages and squares with what companies including Palantir (NASDAQ:PLTR) and Micron Technology (NASDAQ:MU) are actually reporting on their income statements.
Beat and Raise, or Get Punished Barrs said the market’s tolerance has narrowed: “If you can beat and raise, markets are going to reward you. If you can’t show that positive forward guidance, there’s going to be a lot more scrutiny around that forward outlook.”
Beating the quarter and raising the outlook for the quarters ahead is the bar. Forward guidance drives the reaction now more than reported results.
Micron raised fiscal Q4 revenue guidance to $50 billion ±$1 billion with gross margin near 86%, and Palantir raised full-year revenue guidance to $8.15 billion–$8.16 billion at 82% YoY growth. Companies without that visibility are getting sold on otherwise clean quarters. This is the single behavioral change to internalize because it changes what owning earnings season feels like.
Rotation and the Monetization Hinge Barrs described the shift as: “We’re seeing a natural and quite healthy rationalization of some of the things we saw through the earlier part of the year. We’re seeing a broadening out of that perspective.”
He added: “We’re really at the early stage of this. The monetization of that capital investment spend is going to be a key variable that the market focuses on.”
Monetization means turning the equipment sale into a durable stream of revenue that pays for the equipment. The market is shifting its focus from who sells the chips to who earns a return on the money being spent on them.
That question splits the stack. Chip suppliers such as NVIDIA and Taiwan Semiconductor (NYSE:TSM) already booked the revenue, per NVIDIA’s Q2 FY27 8-K. Infrastructure names such as CoreWeave (NASDAQ:CRWV) and Constellation Energy (NASDAQ:CEG) are still spending to earn theirs, with CoreWeave posting free cash flow of -$5.74 billion in Q2.
The power, cooling, and networking suppliers behind those data centers are the part of the trade most investors overlook, and we profiled seven of them in a free report on AI infrastructure beyond the chipmakers. If returns on AI spending disappoint, capital budgets get revisited, and today’s healthy rotation would look different in hindsight.
Contact [email protected] for any questions or corrections.
Cathie Wood has spent years backing challengers to dominant technology companies, but her latest semiconductor move leaned firmly towards the market leader.
ARK Invest sold about $72.8 million of AMD shares in its August 28 trades while buying roughly $53 million of Nvidia stock.
AMD disposal was valued at about $74.5 million and the Nvidia purchase at $55.6 million.
The move came days after Nvidia delivered another blockbuster quarter. But ARK has not said the trade reflects a loss of confidence in AMD.
The more defensible reading is that Wood was rotating towards clearer near-term AI earnings visibility.
Nvidia had just reported fiscal second-quarter revenue of $96.2 billion, up 106% from a year earlier, while Data Center revenue jumped 117% to $89 billion. The company guided for roughly $108 billion of revenue next quarter.
Nvidia is no longer asking investors to wait several product cycles for its AI thesis to show up in financial results.
Demand is already translating into enormous revenue, and management says supply remains a constraint.
TD Cowen analyst Joshua Buchalter described Nvidia shares as “materially undervalued” after the results, according to MarketWatch. He argued that without supply constraints, customer demand could point to revenue nearly doubling.
Bank of America analyst Vivek Arya made a similar valuation case before earnings.
Arya saw Nvidia stock trading at a 34% to 50% discount to what its fundamentals could justify while maintaining a $350 target.
For ARK, that combination of dominant market position and visible earnings growth may have made Nvidia the more attractive destination for incremental chip exposure.
AMD’s own numbers hardly suggest a broken story.
Second-quarter revenue reached a record $11.5 billion, up 50% year on year, while Data Center revenue more than doubled.
Chief executive Lisa Su said Helios, AMD’s rack-scale AI platform, was beginning to ramp in the second half.
The difference is that investors are still waiting to see how quickly Helios can translate into a much larger AI revenue stream.
Futurum Group chief executive Daniel Newman captured that tension after AMD’s results.
Yahoo Finance reported that Newman viewed the quarter as good, but said investors had been looking for a much stronger guide driven by Helios.
Wall Street remains constructive on AMD.
Goldman Sachs upgraded the stock to Buy in May, arguing that AMD could be an outsized beneficiary of enterprise agentic AI adoption as demand supports both server CPUs and future data-centre GPU growth.
The firm also said it continued to prefer Nvidia and Broadcom on a relative basis.
That last point fits ARK’s August 28 activity especially well, as Wood did not simply sell AMD and buy Nvidia. ARK also added roughly $20 million of Broadcom stock.
That looks more like a reshaping of semiconductor exposure across several AI winners than a binary call that AMD has lost.
The Magnificent Seven are making a comeback on Wall Street, but the latest rally is being driven by a different set of winners than earlier this year.
Nvidia is once again emerging as the standout performer in the artificial-intelligence trade after spending much of 2026 trailing smaller semiconductor stocks.
The chipmaker's renewed momentum is helping lift the broader group of megacap technology companies closer to record levels, MarketWatch said in a report.
The Roundhill Magnificent Seven ETF rose nearly 3% on Thursday to $70.63, approaching its all-time closing high of $70.94.
The ETF had previously peaked in May.
The fund tracks Nvidia, Apple, Meta Platforms, Amazon, Alphabet, Microsoft and Tesla.
The rebound marks a shift in market leadership after investors earlier favored semiconductor companies outside the megacap group.
Nvidia has been among the biggest beneficiaries of renewed enthusiasm around AI spending.
Shares have gained momentum since the company delivered a strong earnings report last week and projected revenue growth of more than 70% for the fiscal year ending in January 2028.
The forecast reinforced expectations that spending on AI data centers remains far from exhausted.
“There is still no end in sight to the AI infrastructure build-out,” Joe Tigay, portfolio manager at Equity Armor Investments, wrote in a note last week.
Nvidia received another boost Thursday after announcing its acquisition of Hugging Face, an open-source AI developer platform.
The deal is expected to strengthen Nvidia's position beyond chips and deeper into the software ecosystem supporting AI development.
Jeff Pollard, vice president and principal analyst at Forrester, said the acquisition could give Nvidia greater control and visibility into the open-source software layer.
The move highlights Nvidia's broader strategy of building an AI ecosystem around its hardware rather than relying solely on demand for graphics processing units.
The latest Nvidia rally is notable because the stock had been overshadowed earlier in the year by companies such as Micron Technology and Advanced Micro Devices.
Those stocks helped push the iShares Semiconductor ETF to record levels as investors looked for faster-growing or more differentiated opportunities outside Nvidia.
The semiconductor ETF remains up 67% this year, but recent performance tells a different story.
Nvidia shares have gained about 7% over the past three months, while the semiconductor ETF has fallen 18%.
The reversal suggests investors are reassessing whether some of the smaller semiconductor winners had moved too far ahead of their fundamentals.
At the same time, Nvidia's latest earnings outlook has strengthened the argument that its enormous size does not necessarily prevent it from continuing to benefit from the AI investment cycle.
The rotation is also bringing the rest of the Magnificent Seven back into focus.
Nvidia and Apple are now within about 3% of their record highs.
Alphabet, Meta and Tesla, however, remain more than 10% below their respective peaks.
That divergence has created an unusual situation for a group that dominated the market for much of the past decade.
While Nvidia and Apple are again approaching their highs, several other members have become relative laggards.
CNBC's Jim Cramer believes that gap could represent an opportunity.
“We’re witnessing the revenge of the Magnificent Seven and most people don’t even seem to know it,” the “Mad Money” host said on Thursday.
“I think it’s time to buy.”
Cramer argued that investors have spent too much time chasing newer market leaders while overlooking companies that previously drove the technology rally.
“We have to go back and pick at this market’s old leadership, the forgotten Mag Seven, because a lot of them have gotten real cheap,” he said.
“On a price-to-earnings basis, they’ve fallen way behind and that’s just plain wrong.”
About Nvidia, Cramer said that despite being one of the biggest beneficiaries of the AI boom, the chipmaker trades at roughly 17 times expected earnings over the next 12 months, a relatively modest multiple compared with several slower-growing technology companies.
He argued that Nvidia’s valuation reflects investor concerns over whether its exceptional earnings growth can be sustained, particularly as questions grow around the durability of data-center spending.
Cramer believes those concerns are overblown, pointing to Dell’s latest results as evidence that customers are beginning to see tangible returns from their AI investments.
“What the heck is Nvidia doing with such a low price-to-earnings multiple despite the phenomenal growth?” Cramer said.
Meta too has been seen to be trading at a significant discount to its historical valuation, with Morgan Stanley believing the recent settlement and its suite of consumer AI offerings could provide the next leg of growth for the stock.
The stock has also rallied 7% in the last five trading sessions.
Circular financing has been mentioned as one of the biggest risks for Nvidia (NVDA +1.80%) stock investors.
*Stock prices used were the afternoon prices of Sept. 1, 2026. The video was published on Sept. 3, 2026.
Parkev Tatevosian, CFA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
This report is from this week's The Tech Download newsletter. Like what you see? You can subscribe here.
Yesterday, Nvidia confirmed what we all already knew.
The company is planning to acquire Hugging Face, a New York-based startup which has built a repository for open source AI models and recently shot to global recognition after it came under a cyberattack by rogue OpenAI models.
The price tag was a cool $12.9 billion, making Hugging Face Nvidia's second-biggest purchase, after it paid $20 billion for chipmaker Groq's assets.
That nearly $13 billion valuation was what it took to fend off other bidders, Nvidia CEO Jensen Huang told CNBC on Thursday.
So why did the world's most valuable company splash the cash for Hugging Face?
'Defensive move'To understand that, first we need to break down what Hugging Face actually does.
The startup has become perhaps the leading platform for building, sharing and running AI models, particularly in the open source and weight ecosystem — which means developers can edit and self-host a model.
Half of Nvidia's business, Huang said, is "really largely driven by open models." The chip giant itself is a big developer of open models — with Huang telling CNBC on Thursday that the company was the largest contributor of open models in the world "by far."
Hugging Face also sells infrastructure and collaboration tools to organisations working with closed, proprietary AI — as well as robot ducks.
The platform's reach is extensive. More than 18 million people use the platform to share more than 3 million models and 500,000 datasets, and it is used by more than 200,000 companies, Nvidia said in a press release.
The startup has become "one of the most important parcels of real estate in the AI market," Gil Luria, head of technology research at D.A. Davidson said in a note.
The closest comparable to Hugging Face's business was GitHub, a software repository that was acquired by Microsoft in 2018 for $7.5 billion, Luria said.
One of the learnings from that transaction was that allowing a tech giant to acquire an "important repository puts everybody else at a disadvantage," Luria added, making Nvidia's acquisition of Hugging Face a "defensive move".
"If one of the big labs, or worse yet Google, owned Hugging Face, it would be in a position to slow down open source AI in the U.S., which would allow the big labs to increase their power," he added.
ControlIn short, Hugging Face is where AI developers hang out — and that's exactly the kind of space Nvidia would like to control.
"Nvidia gains visibility into customer's preferences and the AI models they use," Naveen Chhabra, principal analyst at Forrester, told CNBC. "They can see which models are trending, what datasets customers are downloading, and the architectures that are gaining traction weeks before they hit mainstream tech news."
The acquisition is an extension of the company's "strategy to encourage a wide range of AI models to prosper, including both proprietary frontier models and open weight models," Ian Fogg, research director at CCS Insight, told CNBC.
The chip giant has become one of the biggest strategic backers of tech companies in the world as it's built up equity stakes across the AI stack, as well as helping to bankroll GPU purchases with increasingly complex financial arrangements.
Now it's looked to secure one of the world's leading AI hubs outright — and it beat out other suitors in the process.
Who were they, I hear you ask? Huang wasn't forthcoming on CNBC's "Squawk Box."
"It doesn't matter who the other bidders were," he told CNBC. "It only matters who wins."
News editOne more thingAs the U.S.-China AI race continues to gather steam — there's growing scrutiny on American reliance on China for key components used to power data centers, raising the prospect of higher costs and worsening supply chain shortages for the AI buildout
On CNBC’s “Halftime Report Final Trades,” Bryn Talkington, managing partner of Requisite Capital Management, picked Capital One Financial Corporation (NYSE:COF).
Lending support to her choice, Wolfe Research analyst Darrin Peller maintained Capital One Financial with an Outperform rating on Aug. 25 and raised the price target from $255 to $275.
Jason Snipe, founder and chief investment officer of Odyssey Capital Advisors, said he likes ServiceNow, Inc. (NYSE:NOW).
According to recent news, ServiceNow announced on Aug. 3 that Simon Mouyal has been appointed chief marketing officer.
Don’t forget to check out our premarket coverage here
Jim Lebenthal, partner and chief market strategist at Cerity Partners, named NVIDIA Corporation (NASDAQ:NVDA) as his final trade.
Trending
Nvidia has confirmed its $12.93 billion acquisition of Hugging Face, betting that ownership of the world’s leading open-model hub can extend its influence beyond chips and deeper into how AI is built.
Joshua Brown, co-founder and CEO of Ritholtz Wealth Management, recommended Spotify Technology S.A. (NYSE:SPOT).
On Aug. 20, Spotify Technology announced an increase in its share repurchase program by an additional $1.5 billion.
Price Action Capital One Financial shares gained 1.8% to close at $220.50 on Thursday. ServiceNow shares jumped 6.5% to settle at $145.59 during the session. Nvidia shares gained 1.8% to close at $228.45 on Thursday. Spotify shares rose 0.1% to settle at $560.11. Read Next
Photo via Shutterstock
Market News and Data brought to you by Benzinga APIs
Nvidia has become one of the world's largest strategic tech backers as the value of its equity investments soared more than tenfold in the past year to $99 billion, with the chip giant increasingly looking to leverage its huge capital reserves to bolster the AI sector.
The company has ramped up dealmaking for financing rounds across the AI stack in the previous 12 months, with over $40 billion committed in 2026. Equity investments were valued at $99 billion as of July 26, up from about $7 billion a year earlier and about $2.2 billion two years earlier.
The rise in value puts Nvidia among the strategic investors with the largest tech holdings around the world. The company still trails some more established tech firms, with Alphabet and Amazon both posting equity investments worth over $100 billion in recent earnings.
Capital has increasingly become a key play for Nvidia.
In August, the company announced partnerships with major investment firms aimed at mobilizing more than $500 billion worth of financing for Nvidia's graphics processing units (GPUs) and said it would provide up to $105 billion of conditional credit support for an OpenAI data center in Ohio. Nvidia also announced Thursday it is planning to acquire AI startup Hugging Face for $12.9 billion.
Frontier labs, neoclouds and companies building software and novel tech for AI — both in private and public markets — have been recipients of cash, with the value of Nvidia's equity holdings also buoyed by skyrocketing tech stocks.
Nvidia made the investments to enhance its growth opportunities, cultivate its ecosystem and strengthen its competitive position, the company said in its earnings.
"Nvidia has a clear interest in ensuring that its customers and partners prosper to provide future business for Nvidia," Ian Fogg, research director at CCS Insight, told CNBC. "Equity investments help companies to innovate, but also give Nvidia a degree of control to encourage companies to take a Nvidia-related innovation path."
Securing positioningNvidia dominates the market for the most advanced chips used for AI, known as graphics processing units (GPUs). Business has boomed as a result.
The chip giant has seen its stock increase by 33% over the past 12 months, and its revenue soared 106% to $96.2 billion in its fiscal second quarter.
Nvidia stock.
"Nvidia is keen to diversify its AI business," said Fogg. "In its most recent quarter, $48.7bn of $96.2bn revenue came from the Hyperscale segment which includes the largest cloud players."
The company is taking steps including financing and equity investments to "increase the range of customers and create an AI ecosystem," he added. "Some aim to support emergent cloud providers, others help Nvidia grow new markets, like telecom for example with the $1bn Nokia equity investment."
Frontier AI labs have been major recipients of Nvidia splashing the cash. The chip giant's Chief Financial Officer Colette Kress told analysts on an earnings call that the company had invested "nearly $50 billion in the frontier AI labs."
Most recently, in February, Nvidia said it would invest $30 billion into OpenAI as part of the company's $110 billion funding round.
While frontier AI labs had "extraordinary" demand for compute, they were growing faster than balance sheets and credit profiles could support and struggled to secure AI factory infrastructure independently, Kress added. "Nvidia is needed to help power this flywheel."
Neoclouds, which buy Nvidia GPUs and then rent access to companies, such as Nebius and CoreWeave, have also courted the chip giant. January saw Nvidia invest $2 billion into CoreWeave and in March it was announced that Nebius secured a $2 billion investment.
watch now
"By injecting capital directly into AI infrastructure financiers, specialized cloud providers and foundation model labs, Nvidia provides these startups with the balance sheet strength to purchase tens of thousands of Nvidia GPUs," Naveen Chhabra, principal analyst at Forrester, told CNBC.
The company has also invested in nascent technological areas. Since March, Nvidia has committed at least $6.5 billion into companies developing photonics and optical technology — which uses light to transmit data and is considered to be a more efficient alternative to transferring data using electricity.
Lumentum, Coherent and Marvell each received $2 billion investments from the tech giant.
"Optics/networking specialists, like Coherent, receive investments to ensure their tooling, NVLink protocols and design engines remain strictly optimized for Nvidia's architecture," said Chhabra. "This creates high switching costs and protects the CUDA software moat against competing accelerators from AMD or internal custom chips from cloud providers."
Nvidia has also seen its $5 billion investment in Intel soar to a value of $30 billion, while its SpaceX holding was worth $21 billion as of June.
"As global AI chip demand runs into physical supply constraints particularly around high-bandwidth memory (HBM) and advanced packaging, Nvidia uses strategic equity positions like in domestic manufacturing options like Intel, to secure priority manufacturing access, reduce Asian foundry concentration risk and stabilize key component supplies," said Chhabra.
Years of buying and holding a single chip maker turned one Oregon couple's brokerage account into their largest asset by far, bigger than their home and their 401ks combined. But sitting ten years from retirement with that much riding on…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Picture a couple in their late 50s in Oregon. Both work, both have saved diligently for decades, and years ago one of them bought NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) in a taxable brokerage account and kept adding. That single position has grown into the largest line item on their net worth statement, larger than the house, larger than the 401(k)s, larger than every other holding combined. Retirement is roughly a decade away. The gain is life changing. It is also, by any reasonable reading, the single biggest risk to the retirement they think they have already won.
This household is a composite, not a real family. The situation is not. It shows up constantly in advisor intake meetings, in Bogleheads threads, in the questions readers send us about employer stock, inherited positions, and long-held single-name winners.
Why This Position Is No Longer an Investment Decision NVIDIA remains a powerhouse operator. It just reported $96 billion in quarterly revenue, with data center revenue of $89 billion and gross margins of 75%. Jensen Huang described the outlook as “a supply-constrained outlook” and guided fiscal 2028 revenue growth of approximately 70% year over year. Shares are around $221, up 14% in the past month and 864% over five years. Analyst ratings skew heavily toward buy, with 48 buys, 10 strong buys, and an average target of roughly $323.
Concentration changes the question from “is this a good company” to “can our plan survive a 50% to 70% drawdown in this specific name.” NVIDIA carries a beta of 2.2 and trades at roughly 17x sales. It has also delivered negative one-day reactions after six straight earnings beats, including a 11% thirty-day decline after Q4 FY26. Great results and painful price action coexist.
Sequence Risk Is Why Your 50s Are Different From Your 30s A 35-year-old who watches a concentrated position fall 60% has two decades of wages, contributions, and compounding to repair the damage. A 57-year-old does not. If the drawdown lands in the five years before or after retirement begins, withdrawals compound the loss because shares are sold at depressed prices to fund living expenses. Academic and practitioner research calls this sequence-of-returns risk, and it is why a portfolio that averages a fine long-term return can still fail a retiree.
This couple is roughly eight to ten years from required minimum distributions at age 73, and closer to Social Security decisions at 62, full retirement age of 67, or 70. Each choice gets harder if the anchor asset is cut in half the year they stop working, which is the exact window planners call the danger zone (we wrote a free guide on defending those first five years of retirement here: The First Five Years).
Tax Traps That Freeze People Most concentrated holders do nothing because selling triggers a bill. Long-term capital gains are taxed federally at 0%, 15%, or 20% depending on income, plus the 3.8% net investment income tax at higher incomes. Oregon taxes the same gain as ordinary state income, with no preferential rate for long-term capital gains. On a position with an enormous embedded gain, the combined federal and state hit can be very large.
The tax is the price of having already won. The question is whether paying some of it, spread across years, is cheaper than the risk of a large drawdown that also erases the tax you were trying to avoid.
Realistic Paths Out Sell in tranches across multiple tax years. A written plan to trim a set dollar amount or share count each year keeps gains from bunching into a single bracket. For 2026, the top federal rate of 37% begins at $768,700 for married filing jointly, and the 20% long-term capital gains rate and NIIT kick in well below that. Splitting sales lets you control which bracket the gain lands in. Redirect all new savings elsewhere. Every future 401(k) dollar, IRA contribution, and brokerage deposit goes into diversified index funds. The concentrated position shrinks as a share of the portfolio without a taxable sale. Use charitable tools if giving is already part of the plan. Donating appreciated shares to a donor-advised fund or charitable remainder trust removes the embedded gain from the estate and produces a deduction. This only makes sense for households that intended to give anyway. Deliberately accept the risk, in writing. If you decide the upside is worth it, document the decision, the drawdown you are willing to tolerate, and the price or portfolio weight that would trigger action. A decision made on purpose differs from paralysis. What to Do First Doing nothing is a decision, and it is the one most concentrated holders make by default. The single most useful number to calculate this month is the percentage of your household net worth sitting in one ticker. If that number would keep you up at night after a 60% drop, the concentration is already telling you what to do next.
Contact [email protected] for any questions or corrections.
Sitting out the AI rally felt safe until the S&P 500 started looking like a semiconductor fund in disguise. Three ETFs can get retirees into the trade without the single-stock exposure that keeps advisors up at night.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
You watched NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) go parabolic from the sidelines. The nest egg was already built, the paycheck was gone, and the last thing your advisor wanted to hear was “let’s put 20% into a single chip stock.” That’s fair. But sitting entirely in bonds and dividend blue chips while the AI buildout reshapes the S&P 500 has its own cost. Three ETFs let you dial in measured exposure without turning your IRA into a lottery ticket: the VanEck Semiconductor ETF (NASDAQ:SMH), the Invesco NASDAQ 100 ETF (NASDAQ:QQQM), and the Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ). Each targets the theme from a different angle, and each carries a very different risk profile you need to respect at this stage of life.
SMH: The Concentrated Chip Bet SMH tracks the MVIS US Listed Semiconductor 25 Index, and it is the most aggressive of the three. The fund holds roughly $77.2 billion in net assets and pours that money into a tight roster of chipmakers and equipment suppliers. NVIDIA alone is 17.55% of the fund, with Taiwan Semiconductor at 9.29% and heavy weights in Applied Materials, Micron, AMD, KLA, Lam Research, Broadcom, Intel, and ASML.
The performance has been extraordinary and volatile in equal measure. SMH is up 51.4% year to date and 88.4% over the past year, versus 18.09% for the S&P 500 over the same year. Zoom out ten years, and SMH has returned 1,692.56% against 248.82% for SPY. That said, those numbers cut both ways. In 2022, the fund’s share price dropped roughly a third. For a retiree, SMH belongs in the satellite sleeve of a portfolio rather than as a core holding.
QQQM: The Cheaper Way to Own the Nasdaq-100 QQQM is Invesco’s buy-and-hold sibling to QQQ. Same Nasdaq-100 index, same top holdings, but a lower expense ratio built for long-term investors rather than day traders. You get Apple, Microsoft, NVIDIA, Alphabet, Amazon, Meta, Broadcom, and Tesla in one package, plus another 90 names spanning software, biotech, and consumer.
Returns are still tech-heavy but far tamer than a pure chip play. QQQM is up 15.5% year to date, 24.72% over the past year, and 92.34% over five years. For a retiree, QQQM is the “core” way to own the AI theme: you participate in the mega-caps that actually monetize AI, without single-stock risk and without paying up for a niche index.
AIQ: The Broader AI Basket With Global Reach AIQ tracks the Indxx Artificial Intelligence & Big Data Index and is the most thematically pure of the three, holding $10.85 billion across roughly 89 positions. It reaches beyond U.S. borders in a way SMH and QQQM do not. The top position is Korean memory maker SK hynix at 7.11%, followed by Micron at 5.77%, AMD at 4.80%, and Samsung Electronics at 4.79%. You also get Alibaba, Tencent, SAP, Siemens, and small speculative slices of C3.ai, SoundHound, Pony AI, and Quantum Computing.
Performance has been strong: 23.99% year to date and 40.01% over one year. Assets under management jumped from $7.80 billion at the end of February to $10.85 billion by the end of May, a sign investors are voting with dollars. The trade-off: AIQ is more of a general tech-and-AI fund than a pure-play, and the foreign holdings add currency and geopolitical risk on top of tech volatility.
Trade-Offs Retirees Should Weigh Before Buying In Nobody can promise the AI buildout keeps compounding at these rates. Semiconductors are cyclical, valuations are stretched after a year like this, and SMH already gave back 1.91% just last week. If you are already in retirement, it is important to size these positions like the volatile satellites they are. A common framework is capping thematic tech at 10% to 15% of the portfolio combined, with QQQM doing most of the heavy lifting and SMH plus AIQ as smaller accelerators. A rough patch in the first years of withdrawals hurts far more than one a decade in, which is the whole subject of our free guide on defending the early retirement years. That way an ugly quarter dents the account without derailing the retirement plan you already spent decades building.
Contact [email protected] for any questions or corrections.
Nvidia (NVDA +1.80%) is confident in the durability of its competitive advantages.
*Stock prices used were the afternoon prices of Aug. 31, 2026. The video was published on Sept. 2, 2026.
Parkev Tatevosian, CFA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The acquisition may be about far more than software Summary
Rosenblatt kept its Buy rating and $390 Nvidia target
Nvidia NVDA investors may be focusing too much on the $12.93 billion price tag attached to its Hugging Face acquisition and not enough on what the deal says about the chipmaker's broader AI strategy.
Rosenblatt Securities analyst Kevin Cassidy reiterated his Buy rating and $390 price target on Nvidia following the deal, implying more than 71% upside from shares trading around $228. His takeaway is that Nvidia is increasingly willing to use its enormous financial resources to protect and expand the ecosystem surrounding its AI hardware.
Cassidy described the acquisition as Nvidia “continuing to use its balance sheet to maintain the health of the AI ecosystem as it rapidly expands.”
That matters because Hugging Face sits at the center of the open-source AI developer community. The platform hosts machine-learning models, datasets and applications used to build, customize and deploy AI systems. Nvidia is already one of the largest contributors of open models and data to the platform, according to Cassidy.
CEO Jensen Huang said Hugging Face has more than 18 million developers, researchers and creators, hosting more than 3 million models, 500,000 datasets and 1 million applications. More than 200,000 companies use the platform.
The strategic opportunity extends beyond Nvidia's dominant GPU business.
Nvidia already develops its Nemotron family of open-source models. Owning Hugging Face would give the company deeper exposure to the software and developer layers of AI just as major customers increasingly explore internally designed chips.
What Nvidia investors should watch nextFor investors, the key question is whether Nvidia can turn its hardware dominance into an even broader AI platform advantage.
Rosenblatt's thesis suggests Hugging Face could strengthen developer loyalty, increase adoption of Nvidia-compatible models and tools, and make the company harder to displace even as hyperscalers build proprietary silicon.
The risk is execution. Nvidia is paying nearly $13 billion, meaning investors will eventually need evidence that the acquisition produces strategic or financial returns rather than simply enlarging Nvidia's AI footprint.
For now, Rosenblatt remains firmly bullish. Cassidy's $390 target suggests he believes Nvidia's expanding ecosystem can support substantial further upside even after the stock's enormous AI-driven run.
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.
Nvidia (NVDA +1.80%) reported its fiscal second-quarter results on Aug. 26, and the figures were extraordinary. Quarterly revenue rose 106% year over year to $96.2 billion, accelerating from the 85% growth recorded in the fiscal first quarter. Data center revenue rose 117% to $89.0 billion.
But the figures that caught my eye came out of the earnings call, from chief financial officer Colette Kress.
"With cloud industry backlog now greater than $2 trillion, [capital expenditures] by the top 5 hyperscalers is expected to reach nearly $800 billion in 2026 and $1.3 trillion in 2027," Kress said.
That backlog is the pipeline behind both spending figures: cloud customers turn it into data centers, and a meaningful share of every data center dollar goes to Nvidia. So the way to size Nvidia's cut is to pin down that share.
Image source: Nvidia.
How much of hyperscaler spending goes to Nvidia?Nvidia divides its data center revenue into two categories. The hyperscaler category takes in the public clouds plus the world's biggest consumer internet companies. The rest (AI clouds, industrial and enterprise customers, which the company abbreviates as ACIE) covers everyone else.
Revenue from hyperscalers reached $48.7 billion in the fiscal second quarter. That was a 13% rise from the $43.1 billion in the fiscal first quarter, and was more than double the $24.2 billion Nvidia recorded a year earlier (Nvidia recast prior periods after moving a customer to the hyperscaler category).
Multiply the $48.7 billion from the second quarter by four, and revenue from hyperscalers reaches a run rate of about $195 billion a year. If you compare that figure with the nearly $800 billion in capital expenditures Kress says the top five hyperscalers are expected to make in 2026, Nvidia's share comes out to about 24%.
The comparison is loose, to be sure: Nvidia's fiscal year ends in late January, so its fiscal 2027 aligns only approximately with calendar 2026, and its hyperscaler category includes more customers than those five -- which means the true share of those five companies' spending runs somewhat lower. Even so, the last two quarters come to about $92 billion against half of this year's $800 billion -- about $400 billion, if that spending were distributed evenly throughout the year -- or about 23%.
If that share holds, 24% of $1.3 trillion equals about $315 billion in revenue from hyperscalers in calendar 2027, most of which falls into Nvidia's fiscal 2028. That single category would be larger than the $215.9 billion Nvidia brought in for all of fiscal 2026.
And hyperscalers represent only about half of Nvidia's data center business. ACIE revenue was $40.3 billion in the second quarter, a 25% quarter-over-quarter increase and a 138% year-over-year increase. Kress said that non-hyperscaler business should continue to represent about half of data center revenue.
If that distribution holds and the $315 billion is doubled, data center revenue in fiscal 2028 comes out to about $630 billion. Use the second quarter's actual split instead (hyperscalers were about 55% of the data center total) and the figure comes out closer to $575 billion.
Nvidia cannot manufacture everything its customers wantWherever demand for Nvidia's products lands, there's a holdup: manufacturing.
Kress said the company's preliminary expectation is that fiscal 2028 revenue will grow about 70%, and that the figure reflects supply constraints.
CEO Jensen Huang put it more directly, saying "even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%."
What does 70% equal in dollars?
Nvidia's revenue during the first half of fiscal 2027 was $177.8 billion, and the company forecast $108 billion for the third quarter. And a fourth quarter that matched the third would put fiscal 2027 near $394 billion. If that figure grows by 70%, fiscal 2028 revenue comes to about $670 billion.
Data center revenue accounted for more than 92% of Nvidia's total last quarter, so $670 billion in total revenue implies about $620 billion for the data center business -- right in the middle of the $575 billion to $630 billion the demand math yields. That is what you would expect if supply is the real limit: revenue can only reach what Nvidia can build, and the demand Huang says runs well past 70% shows up in the backlog instead of the income statement.
Premium Feature
Moneyball Superscore
94/100
Today's Change
(
1.80
%) $
4.04
Current Price
$
228.45
One risk is how much it costs to manufacture all that. Memory prices are rising, and the company now expects its gross margin to bottom out in the fiscal fourth quarter between 71% and 72%, compared with 75% in the second quarter.
The other risk is the share itself. Capital spending also buys land, buildings, power, and networking gear, and the big cloud companies design some chips of their own -- so Nvidia's quarter of the total is an observation, not a guarantee.
As for the stock, it trades at about $217 as of this writing, up about 4% since the report and about 8% below its 52-week high. The stock trades at about 27 times earnings. Relative to the earnings analysts expect for fiscal 2028, the price-to-earnings multiple drops to about 14, which seems reasonable to me for a company expecting 70% growth.
The semiconductor industry is cyclical, of course, and a $2 trillion backlog could shrink just as fast as it was built. But Nvidia has already told the market how much it expects to grow next year, and said demand is higher than that figure. With this in mind, I do think shares look attractive here. But I would simply maintain a modest position, given how cyclical chips have always been.
Nvidia is paying $12.9 billion for Hugging Face, and the investors on the desk this morning say the price is the least interesting part of it. Barbara Doran, Chief Executive Officer of BD8 Capital Partners LLC, reads it as a company preparing for a world it does not live in yet: Nvidia is "positioning themselves to be much more of an AI platform rather than just a supplier of chips," and doing it now because chip demand will slow eventually, even if that day still looks distant.
Nvidia Corporation (NVDA +1.80%) announced on Thursday that it has agreed to acquire Hugging Face for $12.93 billion. The deal gives the chip behemoth control of an influential platform within the world of AI. The company says it is used by more than 18 million developers and 200,000 companies.
Talks had been reported last week, but details were unsettled until today's confirmation. Nvidia's stock jumped today, up 2.5% by the afternoon. The S&P 500 and Nasdaq Composite were rising as well, up 1.1% and 1.6%, respectively.
Premium Feature
Moneyball Superscore
94/100
Today's Change
(
1.80
%) $
4.04
Current Price
$
228.45
Hugging Face hosts more than 3 million AI models for 18 million developersSo what exactly is Hugging Face? The company's platform is a central hub for the open source AI development world, providing devs with access to millions of AI models and important data sets. Instead of building an AI system from scratch, devs can find an existing model or application and use it as-is or modify and adapt it. It also provides tools that help developers test and deploy those models.
Access to the open source models on the platform is offered for free, unlike the proprietary models offered by frontier labs like OpenAI and Anthropic.
Huang pledges Hugging Face will stay open, with no Nvidia hardware requirementNvidia is not presenting this as an attempt to turn Hugging Face into a storefront for its chips, and the company took pains to reassure the Hugging Face community that under its ownership, the platform will remain open source. Users will not be required to use Nvidia's hardware or operate within its ecosystem.
In a blog post penned by Nvidia's CEO, Jensen Huang, that fact was made clear: "Hugging Face will remain an open platform for the entire AI ecosystem. Developers will choose the models they want, the frameworks they want, the clouds and inference service providers they want, and the computing platforms they want. Nvidia Compute will not be required to build on or deploy through Hugging Face."
The deal extends Nvidia's reach into AI software, not just chipsStrategically, the deal pushes Nvidia farther beyond the business of selling processors. But that doesn't mean it won't have an impact on chip sales. The company that influences one of the primary ways developers discover and work with AI models and applications can steer those developers toward software that "plays nice" with Nvidia hardware.
Nvidia doesn't need to require its hardware for the deal to strengthen its position.
At $12.93 billion for $150 million in revenue, the bet is on influence over profitFor my money, the strategic vision is stronger than the near-term financial case. $12.93 billion is a steep price for a company making $150 million in annual revenue. Nvidia clearly isn't buying Hugging Face for what it earns today. But Hugging Face gives Nvidia a recognized platform that helps it better influence the software decisions that eventually drive demand for hardware.
There is a risk, however, that Nvidia's ownership could backfire. If open source developers feel that Nvidia is, in fact, using its position to steer them toward the Nvidia ecosystem, it could alienate them. And of course, the deal could face regulatory pushback on antitrust grounds.
Investors should watch whether Nvidia can turn its new distribution reach into a stronger business without weakening the ecosystem.
Nvidia Corporation delivered triple-digit Q2 revenue growth, robust margin expansion, and a significant earnings beat, reaffirming its Strong Buy rating. NVDA's $12.9B Hugging Face acquisition strategically strengthens its position in open-source AI software, enhancing global reach and ecosystem influence. Partnership expansions with AWS, SpaceX, and MediaTek reinforce Nvidia's hardware dominance and connectivity leadership in AI infrastructure.
Nvidia just committed serious money to train plumbers and electricians, and the retailer that sells to those exact tradespeople responded by printing a 52-week low. Something in that equation does not add up.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
On September 1, 2026, the Lowe’s Foundation announced what it called the nation’s largest skilled trades coalition, with NVIDIA (NASDAQ:NVDA | NVDA Price Prediction), AT&T, Bank of America, Carrier, General Motors, DEWALT and Duke Energy signing on to train 1 million skilled trades workers by 2030. That same day, Lowe’s (NYSE:LOW) stock hit a 52-week low.
Read that again. The chipmaker at the center of the AI data center buildout is paying to train plumbers and electricians, because there are not enough of them to wire, cool and plumb the buildings that will house its GPUs. The retailer that sells to those same tradespeople just printed a 52-week low.
Why NVIDIA Cares About Plumbers On the fiscal Q2 2027 call, Jensen Huang stepped away from silicon and onto the job site:
“All of the labor that’s necessary. AI infrastructure is creating so many jobs all over the United States and all around the world.”
NVIDIA just posted $96.22 billion in Q2 revenue, up 105.8% year over year, with data center revenue at $89.02 billion. Huang told analysts “you’ve got to go secure the land power and shell, which oftentimes is a couple, two, three years out.” No trades, no factories. No factories, no tokens.
Trades Boom Is Already Here Federated Hermes senior portfolio manager Stephen DeNichilo went on CNBC the next evening and confirmed it: “if you’re a plumber, if you’re a hvac guy, you’re busy right now. You don’t have enough work out there. And so you don’t have enough time for all the work you have out there.”
He called the moment “a generational opportunity for investment in the us”, and noted the Federal Reserve’s Beige Book found “data centers were driving a lot of the economic activity.” Lowe’s CEO Marvin Ellison put a number on the stakes on CNBC, warning the shortage could create a $1 trillion economic loss for the U.S.
Lowe’s Stock Says Otherwise And yet. Lowe’s closed at $199.84 on September 2, 2026, down 21% over one year and down 16% year to date. The Pro customer Lowe’s has spent years courting is the same tradesperson NVIDIA is now paying to train.
I’ve owned NVIDIA for over 15 years, and the through-line of every earnings call is the same: demand exceeds supply, and supply is capped by physical constraints. Broadcom (NASDAQ:AVGO) told the same story this week. AI semiconductor revenue hit $16.70 billion, up 221% year over year, and Hock Tan flagged land, power and shell construction as gating constraints. Same bottleneck, different logo, and it’s why the power, cooling and networking suppliers behind the buildout keep showing up in our free AI infrastructure report.
What to Watch Buy Lowe’s if you believe the Pro backlog eventually shows up in same-store sales. Avoid it if you think a soft housing cycle drowns out the data center tailwind first. NVIDIA is paying to train the plumbers. The market is pricing the plumbers’ supplier at a 52-week low. One of those signals is wrong.
Contact [email protected] for any questions or corrections.
SummaryYes, Nvidia Corporation's 70% FY28 revenue guidance is impressive. However, am I the only one looking at the 52% sequential drop in operating cash flow?Accounts receivable consumed $22.346 billion of cash in Q2, versus only $2.243 billion in Q1. In fact, days sales outstanding jumped to 60 days from 45 last quarter.I can't help but wonder why NVDA suddenly allows investment-grade customers to pay 90 days to one year later.Let me be crystal clear. I'm not bearish on this name. In fact, I think the next leg of the rally is likely if the stock breaks above $230.Overall, I think NVDA's fundamentals are intact (as long as the two AI frontier labs and the neoclouds can pay the bills), and the chart is looking better now than a few months ago. Ahmad Darmansyah/iStock via Getty Images
Heading into Nvidia Corporation's (NVDA) Q2 FY27 print, I was looking at the following chart showing the market's reaction after earnings:
Well, after the blowout FY28 guidance of 70% sales growth, which is constrained by supply, the
14.5K Followers
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.
I am not a registered investment adviser, broker, dealer, or tax professional. This article, including any comments or replies I post, reflects my personal opinions only and is provided for informational and educational purposes. Nothing I write is investment, legal, tax, or financial advice, or a personalized recommendation to buy, sell, hold, or short any security. My views may change without notice. Nothing I write is tailored to any reader’s objectives, financial situation, risk tolerance, or portfolio. Investing involves risk, including possible loss of principal. Readers should conduct their own research and consult a qualified professional before making investment decisions.
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.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of NVDA, AMD, AVGO 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.
The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.
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.
The September Effect has a reputation for making investors nervous. September has historically been the weakest month of the year for U.S. stocks across a data set stretching back 98 years. For investors watching companies in the artificial intelligence (AI) space this year, September could be a useful test of whether a stock's investment thesis rests on price momentum or on business progress.
That distinction matters for Micron Technology (MU +0.22%) and Nvidia (NVDA +1.80%). Both companies are seeing conditions shift as the AI build-out progresses into a new stage, but the more interesting story is what is happening beneath the headlines about graphics processing units (GPUs) and central processing units (CPUs).
Image source: Getty Images.
Micron is becoming more than an AI memory supplier Micron is one of the clearest examples of how AI infrastructure is changing.
The company produces HBM4, a type of high bandwidth memory (HBM) that Nvidia is embedding in its brand-new Vera Rubin platform, but that is only part of the opportunity. Micron is also shipping SOCAMM2 low-power memory and its PCIe Gen6 9650 data center solid-state drive in high volumes. Those products address all the different memory-related needs of an AI system: accelerator memory, CPU-attached memory, and storage.
All this jargon matters because AI factories are not just collections of GPUs. As large language models are asked to handle longer contexts and more inference workloads, moving and storing data becomes a larger part of the problem. Micron says its HBM4 can deliver more than 2.8 terabytes per second of bandwidth, while its SOCAMM2 can provide up to 2 terabytes of memory per CPU platform.
To me, that is a more useful bullish signal than another quarter of strong earnings. Micron's hardware now occupies key positions in the architectures that determine how AI systems are built.
Premium Feature
Moneyball Superscore
91/100
Today's Change
(
0.22
%) $
2.08
Current Price
$
958.16
Nvidia is building the factory, not just the chip Nvidia's own latest product moves the point in the same direction. The Vera Rubin platform combines GPUs, CPUs, networking, storage, and software into an AI factory. The company says Vera Rubin can deliver 10 times the agent throughput of its previous Grace Blackwell platform at scale.
The company's shift toward hardware designed to support agentic AI is important. AI agents make repeated calls to models, databases, and software tools, so their operation demands far more than just GPUs. They also need networking, storage, CPUs, software, and copious amounts of memory to keep everything running. Nvidia's Vera CPUs and Vera Rubin platforms show how the company is building an architecture designed to scale across different AI workloads and environments.
Premium Feature
Moneyball Superscore
94/100
Today's Change
(
1.80
%) $
4.04
Current Price
$
228.45
The 98-year September pattern is worth knowing about, but I would not use it as a reason to sell shares of either company. Septembers come and go, but these tickers are here to stay. A calendar effect can warn investors that volatility may rise. It cannot tell them whether a company's competitive position is improving or weakening. For Micron and Nvidia, the better question is whether the AI infrastructure cycle is producing new products, customer commitments, and deployments. I think it is.
Both companies are already familiar names, which could help them continue to attract attention from those looking to invest in the AI boom. And with both stocks already included in major indexes and offering solid exposure to AI, they're well positioned to remain on investors' radar.
There are risks. Nvidia faces the challenge of sustaining demand as AI customers spend at a huge scale, while competition from other makers of GPUs and custom silicon remains a threat. Micron faces the added risk of memory cycles. Production-related decisions can alter industry economics even when long-term demand is strong. Both of these stocks could also fall for reasons unrelated to their operating businesses.
That is why September may be useful as a review period. If these stocks fall, investors can ask whether the decline reflects a weaker AI thesis or a market pattern.
Wall Street má za sebou solidní růst tažený výrokem člena FEDu Wallera, který naznačil ochotu hlasovat pro podržení sazeb na současné úrovni. Růst indexů jde na vrub především největším společnostem jako Nvidia, Meta nebo Microsoft. Index S&P 500 je půl procenta od historického maxima.
Index Dow Jones +1,18 % na 53686,11 b.
S&P 500 +1,06 % na 7747,71 b.
Nasdaq Composite +1,4 % na 26584,06 b.
Index S&P 500 +1,06 % na 7747,71 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Zbytná spotřeba +1,6 % Energie -0,7 % Finanční sektor +1,6 % Základní materiály -0,5 % Komunikační služby +1,5 % Nezbytná spotřeba 0 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Robinhood Markets (HOOD) +17 % Ciena Corp (CIEN) -10 % Coinbase Global (COIN) +10 % Tyson Foods (TSN) -7,3 % Palantir Technologies (PLTR) +7,7 % Charter Communications (CHTR) -4,8 % ServiceNow (NOW) +6,5 % Albemarle Corp (ALB) -4,1 % Principal Financial Group (PFG) +6,5 % General Mills (GIS) -3,3 %
Martin Varecha
Fio banka, a.s.
Prohlášení
China's open-source AI push could drive software costs to zero and put Big Tech's multitrillion-dollar valuations to the test. Brookings Institution fellow Kyle Chan breaks down how Beijing's strategy is reshaping global AI competition and what it means for investors.
Nvidia will buy popular developer platform Hugging Face for $12.93 billion, using its growing AI war chest to expand its influence in the booming market for open-source models that can nearly match the best from OpenAI and Anthropic at lower costs.
The deal, one of Nvidia’s biggest ever, will bring the chip giant closer to the developers who use Hugging Face to find models and tools, potentially helping it create a pipeline of customers that may buy its processors to run AI services.
It marks the company’s latest effort to use its surging cash pile, totaling more than $22 billion at the end of July, to broaden its customer base when clients such as Meta, OpenAI and Microsoft are developing their own AI chips to reduce their reliance on Nvidia.
“Hugging Face will remain an open platform for the entire AI ecosystem,” Nvidia CEO Jensen Huang said, adding that his company’s chips would not be required to build on or deploy through Hugging Face. AP Photo/Jeffrey McWhorter The chip giant’s increasing investments, sometimes in its own customers, have, however, sparked investor fears the $5.4 trillion company could be artificially inflating valuations and contributing to a bubble in the industry.
Open models “broaden access to AI and help ensure that AI leadership is distributed across companies, institutions and communities,” Nvidia CEO Jensen Huang said on Thursday. “They enable organizations to match the right model to the right job.”
Unlike the closed systems built by OpenAI and Anthropic, open models can be freely downloaded, run and customized by developers. Demand for such models has surged as businesses balk at the steep bill of deploying the technology, with Chinese companies such as DeepSeek and Z.ai emerging as crucial players.
Seeking to assure developers that Nvidia’s involvement would not alter their access to models, Huang said that “Hugging Face will remain an open platform for the entire AI ecosystem.”
The New York-based startup was founded in 2016 by French entrepreneurs Clément Delangue (above), Julien Chaumond and Thomas Wolf. LinkedIn/Clem Delangue He added that developers could choose their preferred models, chips and cloud platforms.
Nvidia will pay about $11.9 billion to Hugging Face investors, while offering an equity-based retention program of up to $1 billion for employees who join Nvidia.
The two companies already work together to help developers use Nvidia’s computing services on the platform.
Developer concerns Some analysts and developers said they were concerned that Nvidia may gradually neglect rival hardware, making its chips the only practical choice for those building on Hugging Face.
“While they have stated otherwise, it is likely that, at a minimum, technical methods will get instrumented to provide a competitive advantage,” said Harold Byun, CEO of BlueRock, a startup that helps companies run AI systems safely.
Hugging Face was valued at $4.5 billion in its last disclosed funding round in August 2023, when it raised $235 million from investors such as Salesforce, AMD and Amazon. Hugging Face “That’s something any rational company would seek to do.”
For Nvidia, building up open source may help it cushion a demand slowdown from some of its biggest customers.
“Nvidia is clearly buying strategic influence as much as current earnings,” said Axel Rudolph, chief technical analyst at IG Group, adding that the deal was another sign that the company’s ambitions extend far beyond selling chips.
Founded in 2016 by French entrepreneurs Clément Delangue, Julien Chaumond and Thomas Wolf, Hugging Face has also been in the news recently after a hack by rogue AI agents that escaped OpenAI’s testing environment. Beyond hosting AI models, it offers datasets, software libraries and cloud services used to build and deploy AI applications.
The New York-based startup was valued at $4.5 billion in its last disclosed funding round in August 2023, when it raised $235 million from investors such as Salesforce, AMD and Amazon.
Nvidia has officially agreed to buy open-source artificial intelligence platform Hugging Face for $12.9 billion, as the chipmaker and world's most valuable company moves into a future beyond hardware. The CEOs of both companies, Nvidia's Jensen Huang and Hugging Face's Clement Delangue, join exclusively to discuss the terms of the courtship and the deal – and the future of artificial intelligence's open source commitment.
Nvidia is reportedly spending billions to acquire a platform that built its reputation by giving everything away for free, and the biggest threat this deal is meant to neutralize comes from Nvidia's own best customers.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
The world’s most valuable semiconductor company is reportedly preparing to spend roughly $14 billion on a business whose core product is given away for free, according to Bloomberg Intelligence. Bloomberg reports that NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) is in advanced talks to acquire Hugging Face, the platform where the open-source AI community hosts models, datasets, and applications. Reports include a $1 billion employee retention component, according to Bloomberg.
Matt Bloxham, senior analyst at Bloomberg Intelligence, explained the strategic logic: “Hugging Face has become the poster child for the AI boom. It is a platform for hosting open-source AI models, datasets, and apps, a kind of real collaboration space for the AI community, and that is one of the reasons why NVIDIA has been attracted to it.” NVIDIA’s Q2 FY27 revenue was $96.22 billion, so the cash is available.
What Hugging Face Actually Is Hugging Face is where developers download open models, share weights, or spin up demos. When a lab releases an open model, the file typically lands on Hugging Face first. When a developer at a bank or hospital wants to try a domain-specific model without paying per-token API fees, that is where they go.
Jensen Huang confirmed on the Q2 FY27 call how central open models have become to NVIDIA’s story, listing TML, Mistral, Quinn, Kimi, GLM, DeepSeq, Minimax and Nemotron as leading open models running on his hardware. He said, “Nearly all open models run on NVIDIA.” Hugging Face is where that ecosystem physically lives.
NVIDIA’s Biggest Customers Are Becoming Its Competitors Bloxham described the defensive rationale: “The AI market is controlled by a small number of closed source AI platforms, the likes of OpenAI and Anthropic, and even Google, and what we are seeing is a lot of those companies are developing their own AI hardware capability, which would potentially rival NVIDIA.”
Broadcom (NASDAQ:AVGO) said on its Q3 FY26 call that OpenAI’s custom accelerator, Jalapeno, will be deployed at 1.3 gigawatts in 2027, and that Google TPU supply will be in the tens of billions of dollars annually. Anthropic is partnered with both Broadcom and AMD (NASDAQ:AMD), with AMD saying it will deploy up to 2 GW of MI450 in Helios racks. Every hyperscaler that fills a data center with its own silicon is a customer NVIDIA loses at the margin.
Why the Developer Commons Is the Durable Moat NVIDIA’s real moat has always been CUDA and the software layer that made its GPUs the default target for anyone building anything. Bloxham described what NVIDIA is trying to protect: “By buying that, they can continue to influence that part of the community and obviously start to influence more what technology those companies use, as well as selling AI hardware.”
Owning the distribution point for open models means every startup, sovereign, and enterprise builder that pulls a model down is doing so from an NVIDIA property. Per NVIDIA’s Q2 FY27 8-K, Data Center revenue was $89.02 billion, up 117% YoY. Protecting the top of the funnel that feeds that number is worth a lot.
Price Tag and the Neutrality Problem The reported $14 billion price buys very little revenue, but it buys influence over which frameworks, model formats, and hardware targets receive first-class support on the platform where the community congregates, according to Bloomberg Intelligence.
An open-source commons derives its value from being seen as neutral ground. A chip vendor owning it gives AMD, Broadcom, and every custom-silicon program a genuine reason to fund a fork or a rival hub. AMD is already investing in its own developer platform, Rackham.ai, and said: “more than 3 million models now run out of the box on AMD.” The moment Hugging Face is perceived as an NVIDIA property, that number becomes a marketing weapon.
Is NVIDIA Stock a Buy? AMD is the merchant-silicon alternative. Its Q2 FY26 data center revenue of $6.72 billion (+107% YoY) is real, but it trades at a P/E of ~172x. Broadcom sells co-designed accelerators to hyperscalers looking to move away from NVIDIA, guiding to $21.7 billion in Q4 AI semiconductor revenue.
NVIDIA still has the platform. It trades at a P/E of ~45x with an operating margin of ~60%, and guided Q3 revenue of ~$108 billion. Buying Hugging Face is a defensive move priced as a strategic one, and it is probably the right call. Shareholders should track whether the community accepts the new landlord.
Contact [email protected] for any questions or corrections.
Marc Ganzi just cashed out a $4 billion deal, and now he is drawing a pointed comparison between today's AI infrastructure frenzy and the late 1990s fiber overbuild. His warning about who gets left holding the debt when the cycle…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Marc Ganzi has spent three decades building digital infrastructure into an institutional asset class. This week, with SoftBank’s acquisition of DigitalBridge approaching completion, he told CNBC that the AI infrastructure market was in a “toppy-esque moment” that felt “very similar to the late 1990s.” Back then, companies borrowed heavily to build fiber networks before demand had caught up. Today, Ganzi sees similar signs around AI infrastructure, even though he views the buildout itself as “another iteration in the evolution of technology.”
The CEO of DigitalBridge Group (NYSE:DBRG | DBRG Price Prediction) agreed on December 29, 2025 to sell the company to SoftBank Group Corp for $16.00 per share in an all-cash, $4 billion transaction, a deal shareholders later approved in April 2026. DBRG last traded at $15.96, hugging the deal price and up 42.48% over the past year. Ganzi has already locked in his exit. The warning he issued this week is aimed at everyone else still climbing.
Ganzi Flags a Widening Leverage Divide On CNBC, Ganzi described a two-tier data center market. DigitalBridge, he said, typically keeps its portfolio near a 45% loan-to-value (LTV) ratio, while newer competitors are pushing into 70% to 80% LTV territory, a condition he compared to altitude sickness. He drew a hard line between investment-grade tenants signed to long-term leases, which he called “islands of safety,” and unrated operators leaning on aggressive private credit structures.
This was not his first warning. Ganzi told analysts on DigitalBridge’s Q3 2025 earnings call the coming cycle would be “marked by a lot of amateurs and a lot of tourists in the next 24 to 36 months.” He also observed that “these gigawatt projects are really tough,” adding that customers can tell the difference between a first-time developer and a firm with “over 400 data centers and 11 different companies.”
DigitalBridge’s own scale supports the point. The company reported $40.80 billion in fee-earning equity under management as of Q1 2026 and, in Q3 2025, leased a record 2.6 gigawatts across its portfolio, roughly a third of U.S. hyperscale leasing that period. DigitalBridge-backed Vantage Data Centers is also building Frontier, a $25 billion, 1.4 GW Texas campus contracted to Oracle and OpenAI’s Stargate program. No wonder SoftBank noticed.
Ganzi’s “Priced to Perfection” Shot at NVIDIA Ganzi reserved his sharpest edge for the financing architecture forming around NVIDIA (NASDAQ:NVDA). He described the capital backing NVIDIA’s chip-financing initiative as “priced to perfection,” meaning every assumption in the stack has to hold for the structure to hold up.
NVIDIA disclosed the scale of that program on its most recent earnings call. Management announced high-profile partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to raise over $500 billion of third-party capital. Under the model, NVIDIA provides “a take or pay commitment on a portion of the facility’s capacity, a minimum revenue guarantee that gives lenders the confidence to underwrite the project.” CFO Colette Kress commentary acknowledged that “some will call this circular financing,” adding that the company sees things differently.
The numbers around NVIDIA are the reason the structure is being built at all. In its Q2 FY2027 report, NVIDIA posted revenue of $96.22 billion, up 105.8% year over year, with data center revenue of $89.02 billion, up 117%. Supply obligations swelled to $279.00 billion. The stock trades at roughly 45x earnings and is up 896.2% over five years, valuations that put some wind behind the late-1990s analogy.
What Retail Investors Should Take Away Ganzi’s message maps where the risk in AI infrastructure actually lives. A campus leased for years to an investment-grade company and financed with moderate debt already has a customer and a stream of rent. A first-time developer borrowing 70% to 80% of a project’s value on behalf of an unrated operator needs far more pieces to go right. The power, cooling, and networking suppliers behind these campuses are a separate trade entirely, and we profiled seven of them in a free report on AI infrastructure beyond the chipmakers.
Ganzi is not warning that every data center is a bubble. He is warning that leverage decides which projects can still breathe when the altitude changes.
Contact [email protected] for any questions or corrections.
Every year, as Labor Day fades and portfolio managers return from vacation, the same conversation starts: Stocks tend to wobble in the ninth month, so maybe it's time to play a little defense. If you own shares of Nvidia (NVDA +2.46%), this discussion may hit a bit harder.
Nvidia has been the market's artificial intelligence (AI) engine for four years now. Since OpenAI launched ChatGPT to the public on Nov. 30, 2022, shares of Nvidia have climbed by 1,200%, and the company has become the most valuable business in the world by market cap.
NVDA data by YCharts.
Sounds great, right? Well, what this also means is Nvidia can be one of the first names institutional funds sell when they want to take gains off the table. While the calendar is not destiny, it is not background noise either.
Let's dig into what the September Effect actually is, how it lines up with Nvidia, and what smart investors can do instead of guessing over the next several weeks.
What is the September Effect? The September Effect is financial jargon used to describe a historical pattern: Over the long run, stocks have posted weaker returns in September than in any other month. In fact, September is the only month that shows a negative average across the major indexes.
Since 1928, the S&P 500 (^GSPC +1.09%) has averaged declines of about 1.1% in September and finished the month lower than it started roughly 56% of the time. The Dow Jones Industrial Average (^DJI +1.18%) shows a similar pattern over an even longer stretch, with an average September drop of around 1.1% and a winning month rate of only 42%. Lastly, the Nasdaq Composite (^IXIC +1.49%) has averaged a decline of about 0.9% in September over the last several decades.
Interestingly, the Nasdaq has actually finished higher 52% of the time in September since 1971. But when it does decline, those slides have been large enough to outweigh the slightly large quantity of wins and pull the long-run average below zero.
Understanding these patterns matters. The stock market is far from guaranteed to slump in the month of September. As the analysis shows, many Septembers end in the green.
Nevertheless, the month tends to attract outsize selling. Money managers come back from summer breaks and rebalance portfolios. Investor psychology also plays a role: After a few ugly Septembers, many people simply expect another one and act accordingly. When you layer on a Federal Reserve meeting, jobs data, and inflation prints, you get a month that feels much heavier than August.
The important thing to keep in mind here is perspective. A 1% average monthly loss does not constitute a bear market. It's a seasonal headwind. Treating the September Effect as a definite prophecy is one way that people wind up selling good stocks at the wrong time.
Image source: Getty Images.
What Nvidia investors need to know in September If you've been paying attention to the artificial intelligence (AI) revolution, you know by now that Nvidia doesn't trade like a sleepy blue chip stock. Instead, the semiconductor giant is a high-expectation, high-volatility growth stock touching the biggest capital-spending infrastructure cycle in modern technology history.
Here is how Nvidia stock has fared over the last few Septembers:
September 2023: (10.3%) September 2024: 1.7% September 2025: 7.1% Nvidia investors have clearly experienced at least one nasty September in the recent past, but they have also enjoyed better Septembers as the AI story continues to accelerate. This dichotomy is my whole point. Nvidia's month-to-month performance is less about the calendar and more about whether investors are in the mood to own one of the most crowded, profitable names in the AI ecosystem.
When institutional funds want to lock in some gains, Nvidia is one of the easiest stocks for them to sell because it is liquid, has a large weight in indexes, and has already delivered the kind of generational run that makes profit-taking feel both responsible and inevitable.
Underneath these buying and selling dynamics, Nvidia's business is the real story: Demand for data center chips remains intense, profit margins have been robust, and the company has kept beating estimates that Wall Street once thought were impossible to meet. At the end of the day, some seasonal selling does not erode Nvidia's dominance. It just means the stock can become briefly cheaper for reasons unrelated to the volumes of GPU shipments.
There's one more wrinkle for 2026: This is a midterm year. Some of the market's best Septembers came during midterm election cycles.
With that said, there is some important nuance to examine here. According to Scott Rubner of Citadel Securities, midterm election years have amplified the September Effect in more recent history, with "the average path weakening through month-end before recovering in October and accelerating higher around Election Day into year-end." Ultimately, the upcoming elections don't necessarily make September safe, but history proves that the "September is always terrible" moniker is a fractured argument.
The warning Nvidia investors should be aware of My warning to investors is not to confuse a seasonal average with a long-term trading plan. Sure, Nvidia stock can fall sharply in a month when the market is already nervous about interest rates, valuations, or concentration in a handful of megacap names.
If you are holding a massive position in Nvidia stock because you think it will never go down, September is a good time to admit that it does. Even a 5% drawdown would not be entirely shocking in a company this massive and widely owned.
If your thesis remains that Nvidia will continue to be a pick-and-shovel winner in AI infrastructure over the next several years, a weak September is nothing more than a weather report. It's far from a reason to abandon the stock.
Premium Feature
Moneyball Superscore
94/100
Today's Change
(
2.46
%) $
5.53
Current Price
$
229.94
Against this backdrop, long-term investors should stay the course and treat any dips as rare opportunities to add if their position size still makes sense relative to the rest of their portfolio. Alternatively, if Nvidia has become an outsize slice of your net worth, it may be wise to use weakness to rebalance rather than trying to time the bottom.
Selling now and buying back in October may look neat on a chart, but in real life, it means hoping you can make two perfect decisions in a row, paying extra taxes, and risking missing the bounce that almost inevitably will show up once the seasonal selling fades.
Ultimately, the best strategy is to exercise patience and have a firm plan. Remember why you own Nvidia stock to begin with, and figure out how much of a position you can own and still stomach watching it fall. Then let the mechanics of September play out.
The investors who make the most money over the long term are not the ones who try to outsmart the calendar. They are simply the ones who weathered the ugly months and kept themselves invested in quality businesses throughout.
Nvidia Corporation announced on Thursday that it has agreed to acquire the open-source AI platform Hugging Face for $12.93 billion.
While rumors and speculation about Nvidia’s potential play had been swirling for weeks, the chipmaker has now made it official.
Hugging Face, which is something of a GitHub for AI, has a library of models and datasets that should make Nvidia an even more dominant player in the AI ecosystem.
Shares of Nvidia were up roughly 1.45% in early trading on Thursday after the news was announced. The stock (Nasdaq: NVDA) is up almost 21% year to date, outperforming the broader Nasdaq Composite’s roughly 14%.
Subscribe to the Daily newsletter.Fast Company's trending stories delivered to you every day
What Nvidia’s boss is sayingIn a blog post announcing the acquisition, Nvidia CEO Jensen Huang appeared to imply that not much would change for Hugging Face users.
“Hugging Face will remain an open platform for the entire AI ecosystem,” Huang wrote. “Developers will choose the models they want, the frameworks they want, the clouds and inference service providers they want and the computing platforms they want.”
He continued: “Hugging Face will continue to support open source and open weight models from across the ecosystem, from every model builder. It will continue to support multi-cloud and multi-accelerator development and deployment, so builders can use the hardware and infrastructure that best fit their work.”
Explore TopicsAImarketsmergers and acquisitionsnvidiastocks
Open-source AI platform Hugging Face is in the news for the second time in as many weeks. But this time, it's good news.
Last week, it was because OpenAI released new details about the security incident in which OpenAI's agentic bots "broke containment," gained unauthorized access to Hugging Face's servers, and took over parts of its system.
This morning, Nvidia (NVDA +2.58%) CEO Jensen Huang announced a different kind of takeover of Hugging Face. But he's not using agentic AI: he's using good old-fashioned money to buy the company.
Here's why Nvidia has agreed to pay nearly $13 billion for Hugging Face, and the impact the acquisition might have on Nvidia's stock.
Nvidia CEO Jensen Huang. Image source: Nvidia Corporation.
What Hugging Face really doesMost people only know about Hugging Face from news reports of the OpenAI security breach. But Hugging Face is more than just a random website that got hacked.
Hugging Face is an open-source repository for tools related to AI and machine learning. It's often likened to GitHub, the primary online repository and platform for computer code.
Hugging Face hosts pre-trained, task-specific AI models, AI training data sets, cloud-based AI testing environments, and libraries of code for AI-related tasks.
And this isn't a tiny community. As Huang pointed out in his blog post announcing the deal, "More than 18 million developers, researchers and creators use Hugging Face to share more than 3 million models, 500,000 datasets and 1 million applications. More than 200,000 companies use the platform to discover, evaluate, customize and deploy AI."
Image source: The Motley Fool.
Why did Nvidia buy Hugging Face?Nvidia has been interested in buying Hugging Face for a while. Hugging Face reportedly turned down Nvidia's $500 million investment offer late last year, which would have valued the company at $7 billion.
But the company generates just $150 million in annual revenue, making a $13 billion valuation – well, $12,930,300,000, to be exact – very rich indeed. Why would Nvidia be willing to pay so much for such a modest business?
Right now, Nvidia dominates the AI chip market, and it's not even close. But closed-source AI labs -- including OpenAI, Anthropic, and Alphabet's (GOOG +1.74%)(GOOGL +1.78%) Google -- have been trying to develop their own AI chips, either on their own or in partnership with other companies like Amazon (AMZN +1.41%).
Premium Feature
Moneyball Superscore
92/100
Today's Change
(
1.78
%) $
5.99
Current Price
$
343.11
Nvidia seems likely to continue to dominate the top-of-the-line chip market. But as AI computing becomes more widespread, the market for "not-the-best-but-good-enough" AI chips is expected to grow, and Nvidia can't afford to lose out on chip sales if the closed labs develop their own proprietary chips optimized for their AI models.
A thriving open-source AI model community would, by definition, be chip-agnostic. That would allow Nvidia to retain a larger market share even if closed-source models move away from Nvidia's technology. That's one reason Nvidia has been investing heavily in building its own open-source AI models.
How will it affect Nvidia's stock?Nvidia brought in $96.2 billion in sales in its most recent quarter, so the amount of revenue to be gained from this acquisition is practically a rounding error for the company. Instead, it's about maintaining dominance of the fast-growing AI ecosystem.
Jensen Huang has been very smart in recent years about establishing partnerships with companies across the AI usage spectrum. Nvidia provides these partners with access to its chips, hardware, and software, helping to ensure the next generation of AI models and infrastructure are designed to Nvidia's specifications.
This acquisition is another forward-looking move by the Nvidia CEO, showing he's thinking not just about next quarter's results but about Nvidia's long-term dominance.
Premium Feature
Moneyball Superscore
94/100
Today's Change
(
2.58
%) $
5.79
Current Price
$
230.20
It's also possible that Nvidia has seen the massive revenue gains posted in recent quarters by cloud providers like Amazon Web Services (AWS) and Google Cloud Platform and is regretting its decision to scale back its own DGX Cloud business.
Hugging Face's existing cloud-based developer tools could help Nvidia reestablish itself in the cloud services market. And that's no small potatoes! Google reported $24.8 billion in Google Cloud revenue in the most recent quarter.
So while this might seem like a minor acquisition for Nvidia in terms of numbers, it's likely to have an outsize impact on Nvidia's long-term performance. It bolsters the thesis that Nvidia is a long-term buy.
This is a fair market value price provided by Massive. Learn more.
$164.07▼
$236.540.43%
29.08
$324.23
Silicon alone does not guarantee a lasting monopoly. For years, the market valued NVIDIA Corporation NASDAQ: NVDA largely on the dominance of its data-center hardware. But the hyperscaler wars are evolving. Building the fastest chips is no longer enough when major cloud providers are aggressively deploying custom accelerators. The true battleground has shifted toward ecosystem lock-in.
The market is now digesting a transformative catalyst. NVIDIA has agreed to acquire the open-source AI platform Hugging Face for approximately $12.9 billion. This deal represents a vital strategic evolution, signaling a shift from a primarily hardware vendor to a broader enterprise software platform.
Get NVIDIA alerts:
Capturing the central hub of open-source AI models could fundamentally alter the competitive landscape. If finalized, this aggressive move to control more of the deployment layer could help neutralize threats to the CUDA architecture and redefine NVIDIA's long-term terminal value.
Laying the Foundation: Pivoting From Hardware to SoftwareWhen a tech sector hardware titan targets a software repository, the goal is rarely direct revenue generation. The objective is friction. If developers naturally build, train, and deploy their machine learning models in an environment owned by the hardware provider, switching to a competitor's silicon becomes prohibitively expensive and time-consuming.
Hugging Face operates as the central nervous system for open-source AI developers. By bringing this platform in-house, NVIDIA positions itself to influence the standards of model deployment. This shifts the relationship with enterprise clients from a transactional hardware cycle to a continuous software integration. The strategy could help ensure that, as the physical constraints of Moore's Law eventually catch up with advancements in the semiconductor sector, NVIDIA maintains its moat through high switching costs in the developer ecosystem.
Securing the Knights: The $1 Billion Developer Retention PlanThe core purchase price of the software repository is approximately $11.9 billion, with up to $1 billion in equity-based retention awards for Hugging Face employees who join NVIDIA.
That retention package is the most critical line item in the deal. Hugging Face's ultimate value lies not in its code but in the trust and engagement of its active developer community. Independent developers flock to the platform because of its historical neutrality. Incorporating an open-source hub into a proprietary corporate structure poses a meaningful risk of triggering a developer exodus.
By locking in the original engineering team with substantial financial incentives, NVIDIA aims to preserve the platform's culture and prevent competitors from spinning up a viable alternative repository. Controlling this developer base allows engineers to optimize foundational open models directly for the CUDA architecture, establishing a stronger walled garden.
Filling the Moat: A Nearly $13 Billion Price TagAcquisitions of this magnitude often strain balance sheets, but the capital allocation strategy here is distinctly aggressive yet entirely comfortable. NVIDIA generates quarterly revenue exceeding $96 billion and net margins exceeding 63%, so it can absorb an approximately $12.9 billion transaction without compromising its liquidity profile.
The acquisition represents a redirection of abundant free cash flow into a high-leverage strategic moat rather than a heavy financial burden.
Arming the Sentinels: Defending the Moat on 2 FrontsThe most credible bearish argument against NVIDIA has always been the rise of custom silicon. Cloud hyperscalers are aggressively funding their own AI accelerators to reduce dependency on expensive third-party GPUs.
The Hugging Face acquisition is only half of the defense strategy. Recently, NVIDIA invested about $3.5 billion in a convertible bond in MediaTek. This capital injection is designed to revive the Rubin CPX custom chip program, directly defending market share in the custom silicon space.
By simultaneously buying the premier software deployment layer and funding custom hardware alternatives, management is executing a dual-pronged defense against hyperscaler independence. Competitors attempting to circumvent traditional data-center GPUs will now find themselves battling optimized software standards on one front and well-funded custom hardware on the other.
Guarding the Gates: NVIDIA Overrides Policy NoiseEven structurally dominant organizations operate within the physical economy, and peripheral risks require attention. A recent global bond sell-off has pushed long-term U.S. Treasury yields higher. Elevated yields naturally pressure the valuation multiples of high-growth technology equities. With a beta hovering around 2.22, NVIDIA remains sensitive to macroeconomic volatility.
Adding to the friction, U.S. Commerce Secretary Howard Lutnick recently introduced commentary regarding forthcoming semiconductor tariffs. Broad trade policy shifts introduce immediate uncertainty into global supply chains and hardware pricing models.
Despite these genuine macroeconomic headwinds, underlying physical demand continues to offset policy noise. Recent earnings from infrastructure giants like Dell Technologies NYSE: DELL reveal raised guidance and substantial enterprise spending on AI servers. Hyperscalers are not slowing down their capital expenditures. The secular demand for compute power provides a robust buffer against short-term interest rate and tariff fluctuations.
The New Kingdom: Structuring Your Portfolio for SoftwareNVIDIA Stock Forecast Today12-Month Stock Price Forecast:
$324.23
42.64% Upside
Moderate Buy
Based on 55 Analyst Ratings
Current Price$227.30High Forecast$515.00Average Forecast$324.23Low Forecast$218.00NVIDIA Stock Forecast Details
Wall Street traditionally assigns cyclical, conservative multiples to semiconductor hardware manufacturers. Hardware businesses are capital-intensive and subject to brutal inventory cycles. Software platforms, conversely, command premium multiples due to recurring revenue, high margins, and immense scalability.
By capturing Hugging Face, NVIDIA effectively begins a transition from the former to the latter. The market is slowly realizing that NVIDIA is no longer just a chipmaker; it is becoming more of a foundational operating system for artificial intelligence.
This structural pivot provides substantial fundamental support for institutional price targets. The current consensus price target is around $324, representing healthy upside, with some aggressive analysts projecting targets that approach $515. Short interest remains at manageable levels, indicating that institutional bears lack the conviction to bet against this strategic pivot.
Investors might want to add NVIDIA to their active watchlists, using any tariff-induced price pullbacks as strategic entry points before the Hugging Face acquisition fully materializes and the software multiple expansion takes hold.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Should You Invest $1,000 in NVIDIA Right Now?Before you consider NVIDIA, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NVIDIA wasn't on the list.
While NVIDIA currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Learn the basics of options trading and how to use them to boost returns and manage risk with this free report from MarketBeat. Click the link below to get your free copy.
Americké akciové trhy dnes utěšeně rostou, když růst velkých technologických titulů a pokles dluhopisových výnosů převažují nad mírným zdražením ropy v reakci na další eskalaci konfliktu mezi USA a Íránem. Trhům pomohla slova guvernéra Fedu Christophera Wallera, že by byl ochoten podpořit ponechání sazeb beze změny, pokud bude inflace dál vykazovat pokrok směrem k dvouprocentnímu cíli. Peněžní trhy proto snížily sázky na zářijové zvýšení sazeb, i když Waller zároveň uvedl, že při silnějších inflačních datech by hike zvažoval. Investoři nyní čekají především na páteční srpnový report z trhu práce a následně na inflační data za srpen, která budou zveřejněna 11. září před zasedáním Fedu 15.–16. září. Geopolitickou nejistotu udržuje pokračující konflikt s Íránem, když podle zdrojů Írán odpálil střely na Kuvajt v reakci na americké bombardování z počátku týdne.
Růst táhnou především velké technologické a komunikační tituly. Microsoft (MSFT +2,62 %), Apple (AAPL +0,58 %), Meta Platforms ( META +3,71 %) a Nvidia (NVDA +2,24 %) po oznámení dohody o převzetí platformy Hugging Face za zhruba 13 mld. USD. Pozitivní nálada se ale neopírá jen o akcie — výnosy dluhopisů klesají, což pomáhá oceněním růstových titulů. Výnos desetiletého amerického dluhopisu se snižuje o 3 bazické body na 4,75 %. Euro roste o 0,4 % na 1,1639 USD. Ropa navzdory geopolitice roste jen mírně: WTI přidává 0,6 % na 91,57 USD za barel a Brent 0,1 % na 95,75 USD za barel. Zlato posiluje o 2,4 % na 4 486,61 USD za unci, bitcoin roste o 4,6 % na 80 973 USD a ether o 4,2 % na 2 495 USD.
Z jednotlivých titulů nejvíce vyčnívá Snowflake (SNOW), který skáče o 21 % po výrazně lepších kvartálních tržbách i zisku a zvýšení celoročního výhledu tržeb. Firma zároveň upozornila na rychlou adopci svého AI nástroje pro asistované programování. Naopak Broadcom (AVGO) klesá o 3,7 %, přestože výsledky překonaly odhady a firma očekává zdvojnásobení tržeb z AI čipů ve fiskálním roce končícím v roce 2028. Investory ale zklamal slabší celkový výhled tržeb. Hewlett Packard Enterprise (HPE) odepisuje 3,6 %, i když výsledky překonaly odhady a firma zvýšila výhled díky poptávce po cloudu a AI, protože trh znepokojily dodavatelské limity a další rizika. Tyson Foods (TSN) ztrácí 7,4 % po snížení výhledu tržeb a provozního zisku kvůli tlaku na marže z volatilních cen skotu, zatímco Victoria’s Secret (VSXY) propadá o 14 %, když zisk překonal odhady, ale tržby zaostaly za očekáváním.
Index Dow Jones +1,22 % na 53707,52 b.
S&P 500 +1,04 % na 7746,61 b.
Nasdaq Composite +1,4 % na 26585,07 b.
Index S&P 500 +1,04 % na 7746,61 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Zbytná spotřeba +1,9 % Základní materiály -0,1 % Komunikační služby +1,8 % Energie 0 % Finanční sektor +1,4 % Zdravotní péče +0,1 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Robinhood Markets (HOOD) +15 % Ciena Corp (CIEN) -10,0 % Coinbase Global (COIN) +11 % Tyson Foods (TSN) -7,1 % Palantir Technologies (PLTR) +7,8 % Charter Communications (CHTR) -4,9 % Tesla (TSLA) +7,2 % Moderna (MRNA) -4,2 % Principal Financial Group (PFG) +6,7 % General Mills (GIS) -4,0 %
Martin Varecha
Fio banka, a.s.
Prohlášení
Comments from Christopher Waller supporting an interest rate hold for September is what Kevin Hincks sees keeping stocks steady into Thursday morning's trading action. Kevin explains how jobs and inflation data will support Waller's comments and outlines the latest jobless claims print.
Key Takeaways NVIDIA expects fiscal Q4 2027 non-GAAP gross margin to fall to 71%-72% before recovering.Higher memory costs are pressuring margins as AI demand drives rapid Data Center revenue growth.NVIDIA plans fiscal 2028 price increases and is expanding memory supply through major suppliers. NVIDIA Corporation’s (NVDA - Free Report) gross margin faces a new test as memory prices rise sharply amid the artificial intelligence (AI) infrastructure boom. The company delivered a strong 75% non-GAAP gross margin in the second quarter of fiscal 2027, but management expects this metric to decline in coming quarters. Still, NVIDIA’s pricing power, strong Blackwell demand and long-term supplier relationships could help it protect profitability above the 70% level.
NVIDIA expects third-quarter fiscal 2027 non-GAAP gross margin of 74%, plus or minus 50 basis points, down from 75% in the second quarter. The company expects non-GAAP gross margin to come down to 71%-72% in the fourth quarter before recovering to 72%-73% in fiscal 2028. The pressure is largely tied to higher memory costs. During the second-quarter earnings call, management stated pricing conditions have become more difficult than previously expected.
The impact is significant because memory is an important component of NVIDIA’s AI systems. Yet the higher costs are also a result of the same AI demand driving NVIDIA’s growth. The company’s second-quarter revenues jumped 106% year over year to $96.2 billion, while Data Center revenues surged 117% to $89 billion. Strong demand for Blackwell Ultra helped lift non-GAAP gross margin 250 basis points from the year-ago quarter.
NVIDIA is taking steps to secure supply. Its supply and capacity commitments increased to $279 billion, primarily because of memory procurement. The company also has long-standing relationships with the three major memory suppliers — Micron Technology, SK Hynix and Samsung — and is working with them to expand capacity.
Pricing power could provide another cushion. NVIDIA expects to implement price increases beginning in fiscal 2028, helping margins recover toward 72%-73%. With AI demand remaining strong and Vera Rubin entering production, NVIDIA appears capable of keeping gross margins comfortably above 70%, although near-term pressure is likely.
NVDA’s Rivals AMD & INTC Face Margin Tests Amid AI Chip BoomNVIDIA’s main competitors, Advanced Micro Devices, Inc. (AMD - Free Report) and Intel Corporation (INTC - Free Report) , are also witnessing margin improvement amid the rising demand for AI chips.
Advanced Micro Devices offers a growing alternative in AI accelerators. Its second-quarter 2026 revenues rose 50% year over year to $11.54 billion, while Data Center revenues jumped 107% to $6.72 billion, helped by Instinct MI350 GPUs and EPYC processors. AMD’s non-GAAP gross margin expanded to 56.2% from 43.3%, reflecting a favorable mix shift toward higher-value Data Center products.
Despite the significant improvement, Advanced Micro Devices’ non-GAAP gross margin remained well below NVIDIA’s. This suggests AMD has a lower cushion to absorb rising memory costs.
Intel is another competitor benefiting from growing AI infrastructure demand through its Xeon CPUs and manufacturing business. The company’s second-quarter 2026 revenues increased 25% year over year to $16.13 billion, while non-GAAP gross margin expanded to 41.8% from 29.7%.
Though Intel expects continued strong demand for server CPUs, it has warned that higher memory, wafer and substrate prices could pressure margins. The company has been investing heavily in manufacturing, including a planned $5.7 billion expansion of its Ireland facility.
For NVIDIA, the key advantage remains its much higher gross margin. AMD and Intel face their own cost pressures, but NVIDIA's strong AI demand and pricing power could give it greater flexibility to absorb higher memory costs while keeping margins above 70%.
NVIDIA’s Price Performance, Valuation and EstimatesShares of NVIDIA have risen around 20.2% year to date, outperforming the Zacks Computer and Technology sector’s gain of 15.5%.
NVIDIA YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 17.98, below the sector’s average of 20.22.
NVIDIA Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 93.3% and 64%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over the past seven days.
Image Source: Zacks Investment Research
NVIDIA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Nvidia (NVDA - Free Report) .
Nvidia currently has an average brokerage recommendation (ABR) of 1.18, 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 1.18 approximates between Strong Buy and Buy.
Of the 51 recommendations that derive the current ABR, 46 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 90.2% and 5.9% of all recommendations.
Brokerage Recommendation Trends for NVDA
Check price target & stock forecast for Nvidia here>>>
While the ABR calls for buying Nvidia, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
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.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of 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.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
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.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Should You Invest in NVDA?In terms of earnings estimate revisions for Nvidia, the Zacks Consensus Estimate for the current year has increased 3.7% over the past month to $9.22.
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.
Nvidia announced Thursday that it will buy AI developer platform Hugging Face in a deal valued at approximately $12.9 billion.
The chipmaker is betting that growing demand for the open-source AI models hosted on Hugging Face will fuel future growth, even as some of Nvidia's largest customers develop their own chips to reduce their dependence on the company.
Nvidia CEO Jensen Huang said Hugging Face will remain an open-source platform. He estimated that it hosts more than 3 million models, 500,000 datasets and 1 million applications.
"Open models let startups, businesses, universities and public institutions build on advanced capabilities without training every model from scratch. They enable organizations to match the right model to the right job," Huang wrote in a Thursday morning blog post announcing the acquisition.
Nvidia CEO Jensen Huang said Hugging Face will remain an open-source platform. (Patrick T. Fallon/AFP via Getty Images)
MASSIVE AI BOOM PUTS ONE OF AMERICA'S OLDEST MANUFACTURERS ON PATH TO DOUBLE IN SIZE, CEO SAYS
"That is how AI can advance safely, strengthen cybersecurity and sovereignty, accelerate innovation, and reach factories, hospitals, farms, classrooms and Main Street businesses around the world," Huang added.
Under the deal, Nvidia will pay Hugging Face shareholders approximately $11.9 billion, while setting aside up to $1 billion in equity-based retention awards for Hugging Face employees who join the company, according to Nvidia's latest Form 8-K filing with the Securities and Exchange Commission.
Nvidia and Hugging Face have collaborated since 2023 to give developers access to Nvidia's AI computing platform.
Bringing Hugging Face in-house could help Nvidia offset any future slowdown in demand for its chips as Meta, OpenAI and Microsoft – among its largest customers – invest in their own AI computing capabilities.
Under the deal, Nvidia will pay Hugging Face shareholders approximately $11.9 billion. (Photographer: Loren Elliott/Bloomberg via Getty Images)
OPENAI CO-FOUNDER WARNS AI MODELS ARE BECOMING HARDER TO CONTROL AFTER ITS MODEL HACKED ANOTHER FIRM
The transaction is expected to close in the first half of 2027, according to the filing.
Also included in the filing was a risk disclosure cautioning that government restrictions on AI models originating in China could materially harm Hugging Face's business.
Hugging Face hosts numerous AI models developed by Chinese companies, including DeepSeek and Moonshot AI, alongside models from developers around the world.
The transaction is expected to close in the first half of 2027. (Jakub Porzycki/NurPhoto via Getty Images)
CLICK HERE TO DOWNLOAD THE FOX NEWS APP
Hugging Face recently made headlines after one of OpenAI's AI models escaped what was intended to be a secure testing environment and hacked into the platform during an experiment.
The New York-based startup, backed by investors including Intel, Advanced Micro Devices and Amazon, was founded in 2016 by French entrepreneurs Clément Delangue, Julien Chaumond and Thomas Wolf.
When Nvidia Corp (NASDAQ:NVDA) CEO Jensen Huang addressed world leaders at the G20, he didn’t spend much time talking about GPUs or the company’s latest chips.
Instead, he offered a simple framework for understanding the AI economy: a “five-layer cake” that starts with energy, ends with applications, and stretches far beyond Nvidia’s core business. For investors, it’s a useful reminder that the AI trade isn’t one theme—it’s an entire ecosystem.
AI Starts With Energy, Not Models“The first thing is to recognize what is AI,” Huang said before breaking it down into five layers. “At the lowest layer is energy. You can’t produce something without energy. It transforms electricity into mathematics.”
That first layer is easy to overlook in a market captivated by chatbots and foundation models. Yet Huang argued that electricity sits at the base of the AI economy, followed by chips, “that’s the world that I’m in,” and then infrastructure—the land, power and data centers that house AI systems.
Only after those three layers come AI models, which Huang noted are “what most people think AI is,” and finally data and applications, where businesses generate real economic value.
The sequence matters. Huang’s argument is that AI isn’t simply software running in the cloud. It’s a vertically integrated technology stack where every layer depends on the one below it.
Read Next
Nvidia Is One Slice. The Opportunity Is Much Bigger.Huang’s framework also broadens the list of potential AI beneficiaries.
The first layer—energy—could benefit companies involved in electricity generation, grid modernization and power equipment, including Constellation Energy Corp (NASDAQ:CEG), GE Vernova Inc. (NYSE:GEV) and Eaton Corporation, PLC (NYSE:ETN) as AI data centers place growing demands on power infrastructure.
The second layer is chips, where Nvidia remains the dominant player alongside companies such as Advanced Micro Devices, Inc (NASDAQ:AMD) and manufacturing partner Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM).
The third layer is infrastructure, covering the physical backbone of AI. That includes power and cooling specialist Vertiv Holdings, LLC (NYSE:VRT), networking companies like Arista Networks, Inc. (NYSE:ANET) and Broadcom Inc. (NASDAQ:AVGO), as well as data center operators Digital Realty Trust, Inc. (NYSE:DLR) and Equinix, Inc. (NASDAQ:EQIX).
Above that sit AI models, where companies including Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Meta Platforms Inc. (NASDAQ:META) are investing heavily in frontier AI systems.
Finally comes applications—the software businesses that embed AI into everyday workflows. Companies such as Microsoft Corp. (NASDAQ:MSFT), Salesforce Inc. (NYSE:CRM), ServiceNow, Inc. (NYSE:NOW) and Palantir Technologies Inc.(NASDAQ:PLTR) are among those building products that monetize AI for enterprise customers.
The Investment TakeawayHuang’s “five-layer cake” isn’t an investment recommendation—it’s a framework for thinking about where AI spending could flow. His central point was that countries and companies don’t have to dominate every layer, but they do need to decide where they want to compete.
For investors, the same logic applies. Nvidia may remain the flagship AI stock, but if Huang’s vision of AI as critical infrastructure plays out, the winners won’t be confined to chipmakers.
The next phase of the AI trade could increasingly be driven by the companies that generate the power, build the data centers, connect the networks and deliver AI into real-world applications.
By You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
There's a hidden puzzle in the deal price between Nvidia and Hugging Face. Matt RAMEY / AFP via Getty Images; Chip Somodevilla/Getty Images Look closely at the Nvidia-Hugging Face deal number.
Hugging Face cofounder Thomas Wolf snuck a parenthetical into his announcement of the company's acquisition: "(special congrats if you find the Hugging Face and Nvidia references hidden in our $12,930,300,000 acquisition price)."
Techies raced to decode the Easter egg.
The Hugging Face reference was easy. The number 129,303 is the decimal representation of Unicode code point U+1F917 — the 🤗 emoji, officially named "Hugging Face."
One commenter pointed out this emoji connection. Wolf responded: "And there is a second meaning related to Nvidia."
The Nvidia reference was trickier. Some commenters spotted 93 in the combination, guessing that it was a reference to Nvidia's founding year: 1993.
Some went further, breaking it out into three sets of numbers. 12, 93, and 03. The 12, they said, referenced Nvidia's $12 IPO price. Nvidia went public in 1999 at a price of $12 per share. The stock has skyrocketed, and now trades well over $200.
As for the 03, commenters pointed to Nvidia's three founders: Jensen Huang, Chris Malachowsky, and Curtis Priem.
— MemeCoinEnjoyer 🟪 (@Leon_W_C) September 3, 2026 For all the number-splitting and decoding, it seems like those commenters got it wrong. Hugging Face CEO Clément Delangue responded to one commenter with a link to the Official Register of Color Names.
The color code 129303, it turns out, is that vibrant shade of green that looks a whole lot like Nvidia's classic color.
"Oh my god," the commenter responded. "It was so simple and my gf was right (again)."
Read next
Henry Chandonnet You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Henry Chandonnet is a senior reporter on the Business News desk. He writes about tech culture, from Silicon Valley's startup class to the everyday AI user. He also closely covers Big Tech and the workplace. Henry previously wrote for Fast Company, where he covered trending tech news. He's written for The Daily Beast, People Magazine, and Vulture.Email Henry at [email protected], reach him on Signal at henrychand.30, or follow him on X @HenryChandonnet.
