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Nvidia (NVDA -0.53%) became the first company to cross the $5 trillion market cap threshold last year, powered by its position at the center of the artificial intelligence (AI) infrastructure boom. It fell under that line, but is near $6 trillion in market cap now. Nvidia sells the GPUs, networking equipment, and software that hyperscalers and developers need to build powerful models.

Apple (AAPL +0.33%) briefly followed Nvidia into $5 trillion territory before slipping back below that milestone. Interestingly, Apple's AI opportunity looks different from Nvidia's. The company doesn't need to dominate AI infrastructure because its enormous installed base of devices gives Apple something resembling a tollbooth through which developers can distribute AI-powered services.

There's another company sitting somewhere between these two models: Alphabet (GOOGL +0.11%) (GOOG +0.12%). Google owns AI infrastructure, develops frontier models, operates one of the world's largest cloud platforms, distributes AI to billions of users, and monetizes the technology across several businesses. That's why I think Alphabet can handily become the next $5 trillion company -- and potentially get there before the end of 2028.

Image source: Getty Images.

How Alphabet quietly built an AI empire What makes Alphabet unusual is how it controls so many layers of the AI stack. Starting with infrastructure, Google spent years developing its own custom silicon, called Tensor Processing Units (TPUs). Historically, these chips powered Google's internal workloads and those of cloud customers. However, Alphabet is now beginning to expand the opportunity by making TPUs available to select customers for deployment inside their own data centers.

Alphabet is showing how AI isn't just confined to chatbots. Moving up the stack is Google Cloud and Gemini. The Gemini consumer app has 950 million monthly active users, while Gemini Enterprise is already being used by nearly 90% of the Fortune 100.

Moreover, the company is incorporating AI into search and advertising, where better recommendations and targeting translate directly into high-margin revenue. Meanwhile, Waymo is using AI to operate autonomous vehicles and has already scaled to hundreds of thousands of paid rides per week.

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How AI can change Alphabet During the second quarter, Google Cloud revenue soared 82% year over year to $24.8 billion. Even more impressive, the platform's backlog reached $514 billion. That backlog provides Alphabet with something growth investors love: visibility.

Meanwhile, Gemini is proving that Google belongs in the same conversation as frontier models. Gemini models process roughly 22 billion API tokens per minute. As usage expands across Gemini Enterprise, Workspace, Search, and Google's consumer products, Alphabet has numerous opportunities to monetize AI research.

Waymo provides another potential growth engine. While robotaxis aren't material to Alphabet's financial results yet, autonomous transportation could become a major commercial market -- and Alphabet already owns one of the most mature platforms.

The bigger theme here is that Alphabet doesn't need each of its AI initiatives to become a blockbuster. Search can monetize AI through advertising while Gemini sells software and subscriptions. Cloud stands to benefit from accelerating infrastructure spend while TPUs monetize underlying hardware. Lastly, Waymo gives Alphabet an opportunity to commercialize AI in the physical world. Very few companies have this many shots on goal.

How Alphabet can reach a $5 trillion valuation Alphabet is currently worth $4.2 trillion. Reaching a $5 trillion valuation requires its market capitalization to increase by only about 19%. Wall Street's consensus estimates currently call for Alphabet to notch roughly $11.81 in earnings per share (EPS) this year, and expand that to $15 in 2027 and nearly $18 by 2028. Alphabet stock currently trades at a forward price-to-earnings (P/E) ratio of 23.

GOOGL EPS Estimates for Current Fiscal Year data by YCharts

Here's the interesting part: Multiplying the consensus 2028 earnings estimate of $18 per share by Alphabet's forward P/E of 23 produces a future share price of $414. This is about 20% higher than Alphabet's current stock price and would propel the company just above a market cap of $5 trillion. This means Alphabet could reach $5 trillion by 2028 without requiring multiple expansion.

Of course, there are some important risks to note. Alphabet is spending enormous amounts of money building AI infrastructure. Competition from OpenAI, Anthropic, Microsoft, and Amazon remains fierce.

I think the competitive landscape is what makes Alphabet stock such a compelling long-term investment, though. Alphabet doesn't need Waymo to dominate transportation, Gemini to destroy ChatGPT, or TPUs to replace Nvidia's GPUs for this overall thesis to work out.

In the long run, Alphabet simply needs its vertically integrated AI businesses to keep compounding earnings. If the forecast above is any indication, analysts seem overwhelmingly bullish on Alphabet's ability to continue monetizing and profiting from its AI ambitions. And that makes sense. 

Nvidia stock has wavered since breaking through to a record high earlier this week. One massive options buyer is confident of further gains.

The Australian data center company's $5.5 billion IPO is testing how much investors are still willing to pay for AI infrastructure growth. Summary

Firmus reportedly closed IPO bookbuilding without clarity on the final price or deal structure.

Nvidia Corp. (NVDA, Financials), the AI chipmaker and an existing Firmus Technologies shareholder, is getting another look at how investor enthusiasm for AI infrastructure can collide with valuation concerns.

Firmus, an Australian firm, is said to have completed bookbuilding for an IPO that aims to raise $5.5 billion at A$11 a share. The offer would value the high-performance computing and AI infrastructure firm at around A$43.7 billion ($30.4 billion).

Demand originally looked sufficient for Firmus to bring its bookbuilding deadline forward. But interest apparently waned as investors were asked to put down capital, leaving the ultimate pricing and format of the offering unclear. The number of delayings past Firmus.

Investors have put a lot of money into data centers, processors and AI processing power. Firmus provides access to that buildout through high-performance computers, cloud services and AI-as-a-Service, and already counts Nvidia among its supporters.

But such infrastructure costs a lot of dollars to create. Higher interest rates and more scrutiny of AI expenditure mean investors may be less ready to pay up for high valuations unless firms prove they can provide enough returns.

Then the firmus IPO is a good measure of whether the market is getting more discriminating about the AI infrastructure growth. The next trigger will be whether Firmus goes forward with the offering at its planned value, cuts the price or pulls the IPO.

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.

Click for the complete disclosure

Sometimes, there’s safety in size. Semiconductor Goliath Nvidia (NVDA) is proving as much. Already one of the world’s largest companies by market capitalization, Nvidia is up 29.5% year-to-date. That extends a five-year run in which the stock surged 1,066%.

Numbers such as those may imply that additional near-term gains may be limited. However, that perspective has frequently been applied to Nvidia only for the stock to continue grinding higher. Nvidia’s track record of turning big gains into even larger ones is one reason risk-aware traders may want to evaluate the Direxion Daily NVDA Bull 2X Shares (NVDU).

Indeed, there’s momentum for this stock and the Direxion ETF. The fund attempts to deliver 200% of the daily performance of the chip stock. On Monday, BNP Paribas, citing AI-fueled growth, lifted its price target on Nvidia to $345 from $285. The stock traded around $241 at this writing. So if the BNP Paribas price objective is accurate, occasional use of the leveraged NVDU could reward short-term traders.

Still One of the Best
Adding to the case for Nvidia stock and NVDU, though not as a buy-and-hold tool, is the point that some market observers view the semiconductor stock as undervalued. For example, Morningstar’s fair value estimate on the shares is $310. That’s well ahead of where the stock currently resides. Something else that’s clear is Nvidia’s competitive positioning is a force to be reckoned with.

“Nvidia has a wide economic moat, thanks to its market leadership in graphics processing units, hardware, software, and networking tools needed to enable the exponentially growing market around artificial intelligence,” observed Morningstar’s Brian Colello. “In the long run, we expect tech titans to strive to find second sources or in-house solutions to diversify away from Nvidia in AI, but these efforts will, at best, only chip away at Nvidia’s AI dominance.”

With a market value currently flirting with a staggering $6 trillion, the Nvidia story remains very much tied to AI. That’s something prospective NVDU traders can’t overlook. And it’s a reminder that the Direxion ETF must be deployed in short-term, tactical fashion. That said, Nvidia’s AI ties are likely to be the most significant catalyst for the geared NVDU.

“We think Nvidia’s prospects will be tied to the AI market, for better or worse, for quite some time. We expect leading cloud vendors to continue to invest in in-house, while AMD is also working on GPUs and AI accelerators for the data center,” concluded Colello. “However, we view Nvidia’s GPUs and Cuda as the industry leaders, and the firm’s massive valuation will hinge on the pace of AI buildouts in the years ahead.”

For more news, information, and strategy, visit the Leveraged & Inverse Content Hub.

Alta Advisers Ltd boosted its position in NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 186.4% in the 2nd quarter, according to its most recent filing with the SEC. The firm owned 272,438 shares of the computer hardware maker’s stock after acquiring an additional 177,316 shares during the period. NVIDIA comprises approximately 12.4% of Alta Advisers Ltd’s holdings, making the stock its 2nd biggest holding. Alta Advisers Ltd’s holdings in NVIDIA were worth $54,512,000 at the end of the most recent quarter.

A number of other large investors also recently made changes to their positions in the business. Bank of America Corp DE lifted its position in NVIDIA by 2.1% during the first quarter. Bank of America Corp DE now owns 191,200,989 shares of the computer hardware maker’s stock worth $33,345,453,000 after buying an additional 4,019,505 shares during the period. Invesco Ltd. grew its holdings in NVIDIA by 0.3% in the 4th quarter. Invesco Ltd. now owns 143,239,504 shares of the computer hardware maker’s stock valued at $26,714,167,000 after buying an additional 446,178 shares during the period. Amundi increased its stake in shares of NVIDIA by 10.4% during the 1st quarter. Amundi now owns 133,768,018 shares of the computer hardware maker’s stock valued at $23,329,141,000 after acquiring an additional 12,575,177 shares during the last quarter. J. Stern & Co. LLP lifted its holdings in shares of NVIDIA by 13,709.1% during the 4th quarter. J. Stern & Co. LLP now owns 125,760,307 shares of the computer hardware maker’s stock worth $23,454,297,000 after acquiring an additional 124,849,603 shares during the period. Finally, Dimensional Fund Advisors LP boosted its position in shares of NVIDIA by 0.6% in the first quarter. Dimensional Fund Advisors LP now owns 94,521,253 shares of the computer hardware maker’s stock worth $16,479,126,000 after acquiring an additional 555,221 shares during the last quarter. Hedge funds and other institutional investors own 65.27% of the company’s stock.

Insider Activity In related news, CFO Colette Kress sold 34,918 shares of the firm’s stock in a transaction dated Thursday, September 17th. The stock was sold at an average price of $219.05, for a total transaction of $7,648,787.90. Following the sale, the chief financial officer directly owned 765,103 shares in the company, valued at approximately $167,595,812.15. This trade represents a 4.36% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Timothy Teter sold 30,460 shares of the business’s stock in a transaction that occurred on Monday, September 21st. The stock was sold at an average price of $222.80, for a total value of $6,786,488.00. Following the transaction, the executive vice president directly owned 2,687,660 shares in the company, valued at $598,810,648. This trade represents a 1.12% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 1,766,118 shares of company stock worth $399,450,353. 3.94% of the stock is currently owned by corporate insiders.

NVIDIA Stock Performance Shares of NVDA stock opened at $237.36 on Thursday. The company has a current ratio of 4.59, a quick ratio of 3.85 and a debt-to-equity ratio of 0.14. The company has a market cap of $5.72 trillion, a PE ratio of 30.01, a P/E/G ratio of 1.85 and a beta of 2.22. The company’s fifty day simple moving average is $221.38 and its 200-day simple moving average is $208.88. NVIDIA Corporation has a 52 week low of $164.27 and a 52 week high of $243.37. NVIDIA (NASDAQ:NVDA – Get Free Report) last announced its quarterly earnings results on Wednesday, August 26th. The computer hardware maker reported $2.22 earnings per share for the quarter, topping analysts’ consensus estimates of $2.09 by $0.13. NVIDIA had a net margin of 63.66% and a return on equity of 96.04%. The firm had revenue of $96.22 billion during the quarter, compared to analysts’ expectations of $92.27 billion. During the same period in the prior year, the company earned $1.05 EPS. The firm’s revenue was up 105.9% on a year-over-year basis. As a group, equities research analysts anticipate that NVIDIA Corporation will post 9.25 EPS for the current year.

NVIDIA announced that its board has initiated a stock buyback program on Monday, September 28th that permits the company to buyback $150.00 billion in outstanding shares. This buyback authorization permits the computer hardware maker to buy up to 2.8% of its shares through open market purchases. Shares buyback programs are often a sign that the company’s board of directors believes its stock is undervalued.

NVIDIA Announces Dividend The business also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Stockholders of record on Thursday, September 10th were given a $0.25 dividend. The ex-dividend date of this dividend was Thursday, September 10th. This represents a $1.00 annualized dividend and a dividend yield of 0.4%. NVIDIA’s dividend payout ratio is presently 12.64%.

Wall Street Analyst Weigh In Several equities analysts recently commented on the stock. Piper Sandler assumed coverage on shares of NVIDIA in a research report on Wednesday, September 9th. They set an “overweight” rating and a $300.00 price target for the company. DA Davidson reissued a “buy” rating and set a $300.00 price objective on shares of NVIDIA in a research note on Thursday, August 27th. Weiss Ratings restated a “buy (b)” rating on shares of NVIDIA in a report on Friday, October 2nd. Itau BBA Securities cut their target price on NVIDIA from $256.00 to $218.00 in a research report on Wednesday, June 24th. Finally, Wells Fargo & Company set a $210.00 target price on NVIDIA in a report on Friday, October 2nd. Four investment analysts have rated the stock with a Strong Buy rating, fifty have given a Buy rating and one has issued a Hold rating to the company’s stock. According to MarketBeat, the company currently has a consensus rating of “Buy” and a consensus target price of $321.89.

Check Out Our Latest Stock Analysis on NVDA

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

Positive Sentiment: SpaceX may become a major new customer. SpaceX is reportedly seeking approximately $40 billion in debt financing—potentially including bank loans and investment-grade bonds—to purchase NVIDIA GPUs for its AI infrastructure. The proposed transaction would reinforce demand for NVIDIA’s chips, although the debt-funded nature of the purchase raises questions about customer financing risk. Apollo, banks in talks to finance SpaceX’s $40 billion Nvidia GPU purchase Positive Sentiment: NVIDIA is expanding beyond data centers into PCs and edge AI. Microsoft unveiled the $2,599 Surface Laptop Ultra with an NVIDIA AI chip, while ASUS and other manufacturers began offering RTX Spark-powered systems for local AI workloads. This could broaden NVIDIA’s addressable market and create a new consumer and enterprise revenue stream. Microsoft to sell Surface Laptop Ultra containing Nvidia AI chip Positive Sentiment: AI infrastructure adoption remains widespread. NVIDIA-backed Lambda is reportedly targeting up to $4 billion in additional funding ahead of a planned IPO, while robotics, sovereign-AI and cloud-computing companies continue announcing deployments using NVIDIA platforms. These developments support the company’s ecosystem and long-term demand outlook. Nvidia-backed Lambda targets $4 billion raise Positive Sentiment: Analyst sentiment remains bullish. Morgan Stanley raised its price target, and consensus estimates cited by analysts imply additional upside. NVIDIA’s prior quarterly earnings beat and more-than-doubling revenue growth continue to support the bullish case. Neutral Sentiment: Market conditions are mixed. Rising oil prices tied to renewed Strait of Hormuz tensions pressured broader equities, while investors also remained focused on interest rates and Federal Reserve minutes. Negative Sentiment: Valuation and concentration risks are becoming more prominent. NVIDIA is approaching a $6 trillion market capitalization after a powerful rally, increasing the potential for profit-taking. Michael Burry has reportedly shifted to longer-dated put options on NVIDIA, citing the risk of an eventual AI downturn. Negative Sentiment: Trade and execution risks could weigh on the shares. Fresh tariff threats and concerns about margin compression, inventory levels and the sustainability of debt-financed AI spending are tempering enthusiasm. Investors may also be reluctant to chase the stock near record highs without evidence that earnings growth can continue to exceed elevated expectations. About NVIDIA (Free Report)

NVIDIA Corporation is a technology company that designs accelerated computing platforms, graphics processing units (GPUs), central processing units (CPUs), networking products and related software. Its technologies are used in artificial intelligence, data centers, scientific and technical computing, gaming, professional visualization, automotive systems and robotics.

The company’s products include GeForce GPUs and gaming software, data center computing platforms, networking solutions, and enterprise software for AI development and deployment.

Featured Stories Five stocks we like better than NVIDIA Skydance Just Became a Media Giant—With an $80 Billion Debt Load Could Velo3D Be the Next Defense Buyout Target? Penguin Solutions Is Soaring as AI Memory Demand Explodes Alphabet’s Chart Is Coiling—and the Fundamentals May Be Ready to Back It Up

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.

Evolve Private Wealth LLC trimmed its holdings in shares of NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 12.8% in the 2nd quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The institutional investor owned 246,013 shares of the computer hardware maker’s stock after selling 36,220 shares during the quarter. NVIDIA comprises about 3.0% of Evolve Private Wealth LLC’s holdings, making the stock its 4th largest position. Evolve Private Wealth LLC’s holdings in NVIDIA were worth $49,226,000 at the end of the most recent quarter.

Several other institutional investors and hedge funds have also recently modified their holdings of the business. W1M Asset Management Ltd boosted its position in shares of NVIDIA by 14.9% during the 2nd quarter. W1M Asset Management Ltd now owns 32,118 shares of the computer hardware maker’s stock valued at $6,416,000 after acquiring an additional 4,176 shares during the last quarter. Madison Wealth Partners Inc increased its position in shares of NVIDIA by 14.9% in the second quarter. Madison Wealth Partners Inc now owns 30,492 shares of the computer hardware maker’s stock worth $6,101,000 after purchasing an additional 3,960 shares during the last quarter. Krane Financial Solutions LLC raised its stake in NVIDIA by 9.0% in the second quarter. Krane Financial Solutions LLC now owns 1,869 shares of the computer hardware maker’s stock valued at $374,000 after purchasing an additional 154 shares in the last quarter. Varma Mutual Pension Insurance Co raised its stake in NVIDIA by 0.3% in the second quarter. Varma Mutual Pension Insurance Co now owns 3,920,566 shares of the computer hardware maker’s stock valued at $784,466,000 after purchasing an additional 12,300 shares in the last quarter. Finally, George Kaiser Family Foundation lifted its position in NVIDIA by 246.0% during the second quarter. George Kaiser Family Foundation now owns 12,204 shares of the computer hardware maker’s stock valued at $2,442,000 after purchasing an additional 8,677 shares during the last quarter. Hedge funds and other institutional investors own 65.27% of the company’s stock.

Wall Street Analyst Weigh In A number of equities analysts have commented on the stock. Sanford C. Bernstein reissued a “buy” rating on shares of NVIDIA in a research note on Monday, September 21st. Needham & Company LLC reiterated a “buy” rating and issued a $300.00 target price on shares of NVIDIA in a research report on Friday, September 4th. The Goldman Sachs Group reissued a “buy” rating on shares of NVIDIA in a research note on Thursday, September 10th. Royal Bank Of Canada raised their price target on NVIDIA from $300.00 to $330.00 and gave the company an “outperform” rating in a research report on Thursday, August 27th. Finally, Evercore set a $465.00 price target on NVIDIA and gave the stock an “outperform” rating in a research note on Thursday, August 27th. Four analysts have rated the stock with a Strong Buy rating, fifty have given a Buy rating and one has issued a Hold rating to the company’s stock. According to data from MarketBeat.com, NVIDIA has an average rating of “Buy” and a consensus price target of $321.89.

Check Out Our Latest Analysis on NVIDIA NVIDIA Price Performance Shares of NASDAQ:NVDA opened at $237.36 on Thursday. The stock has a market cap of $5.72 trillion, a PE ratio of 30.01, a PEG ratio of 1.85 and a beta of 2.22. The company’s fifty day moving average is $221.38 and its 200 day moving average is $208.88. NVIDIA Corporation has a 52 week low of $164.27 and a 52 week high of $243.37. 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 (NASDAQ:NVDA – Get Free Report) last posted its quarterly earnings results on Wednesday, August 26th. The computer hardware maker reported $2.22 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.09 by $0.13. NVIDIA had a net margin of 63.66% and a return on equity of 96.04%. The business had revenue of $96.22 billion during the quarter, compared to analyst estimates of $92.27 billion. During the same period in the prior year, the business posted $1.05 earnings per share. The company’s revenue was up 105.9% on a year-over-year basis. Research analysts anticipate that NVIDIA Corporation will post 9.25 earnings per share for the current year.

NVIDIA Announces Dividend The business also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Investors of record on Thursday, September 10th were issued a dividend of $0.25 per share. The ex-dividend date was Thursday, September 10th. This represents a $1.00 annualized dividend and a yield of 0.4%. NVIDIA’s dividend payout ratio is currently 12.64%.

NVIDIA announced that its Board of Directors has authorized a stock buyback plan on Monday, September 28th that permits the company to buyback $150.00 billion in shares. This buyback authorization permits the computer hardware maker to buy up to 2.8% of its shares through open market purchases. Shares buyback plans are generally a sign that the company’s leadership believes its stock is undervalued.

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

Positive Sentiment: SpaceX may become a major new customer. SpaceX is reportedly seeking approximately $40 billion in debt financing—potentially including bank loans and investment-grade bonds—to purchase NVIDIA GPUs for its AI infrastructure. The proposed transaction would reinforce demand for NVIDIA’s chips, although the debt-funded nature of the purchase raises questions about customer financing risk. Apollo, banks in talks to finance SpaceX’s $40 billion Nvidia GPU purchase Positive Sentiment: NVIDIA is expanding beyond data centers into PCs and edge AI. Microsoft unveiled the $2,599 Surface Laptop Ultra with an NVIDIA AI chip, while ASUS and other manufacturers began offering RTX Spark-powered systems for local AI workloads. This could broaden NVIDIA’s addressable market and create a new consumer and enterprise revenue stream. Microsoft to sell Surface Laptop Ultra containing Nvidia AI chip Positive Sentiment: AI infrastructure adoption remains widespread. NVIDIA-backed Lambda is reportedly targeting up to $4 billion in additional funding ahead of a planned IPO, while robotics, sovereign-AI and cloud-computing companies continue announcing deployments using NVIDIA platforms. These developments support the company’s ecosystem and long-term demand outlook. Nvidia-backed Lambda targets $4 billion raise Positive Sentiment: Analyst sentiment remains bullish. Morgan Stanley raised its price target, and consensus estimates cited by analysts imply additional upside. NVIDIA’s prior quarterly earnings beat and more-than-doubling revenue growth continue to support the bullish case. Neutral Sentiment: Market conditions are mixed. Rising oil prices tied to renewed Strait of Hormuz tensions pressured broader equities, while investors also remained focused on interest rates and Federal Reserve minutes. Negative Sentiment: Valuation and concentration risks are becoming more prominent. NVIDIA is approaching a $6 trillion market capitalization after a powerful rally, increasing the potential for profit-taking. Michael Burry has reportedly shifted to longer-dated put options on NVIDIA, citing the risk of an eventual AI downturn. Negative Sentiment: Trade and execution risks could weigh on the shares. Fresh tariff threats and concerns about margin compression, inventory levels and the sustainability of debt-financed AI spending are tempering enthusiasm. Investors may also be reluctant to chase the stock near record highs without evidence that earnings growth can continue to exceed elevated expectations. Insider Activity at NVIDIA In related news, EVP Timothy Teter sold 30,460 shares of the firm’s stock in a transaction that occurred on Monday, September 21st. The stock was sold at an average price of $222.80, for a total transaction of $6,786,488.00. Following the transaction, the executive vice president directly owned 2,687,660 shares in the company, valued at $598,810,648. This trade represents a 1.12% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Mark Stevens sold 622,239 shares of NVIDIA stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $231.62, for a total value of $144,122,997.18. Following the completion of the transaction, the director directly owned 2,336,531 shares in the company, valued at $541,187,310.22. This trade represents a 21.03% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 1,766,118 shares of company stock worth $399,450,353 in the last ninety days. 3.94% of the stock is owned by company insiders.

NVIDIA Company Profile (Free Report)

NVIDIA Corporation is a technology company that designs accelerated computing platforms, graphics processing units (GPUs), central processing units (CPUs), networking products and related software. Its technologies are used in artificial intelligence, data centers, scientific and technical computing, gaming, professional visualization, automotive systems and robotics.

The company’s products include GeForce GPUs and gaming software, data center computing platforms, networking solutions, and enterprise software for AI development and deployment.

Further Reading Five stocks we like better than NVIDIA Skydance Just Became a Media Giant—With an $80 Billion Debt Load Could Velo3D Be the Next Defense Buyout Target? Penguin Solutions Is Soaring as AI Memory Demand Explodes Alphabet’s Chart Is Coiling—and the Fundamentals May Be Ready to Back It Up Want to see what other hedge funds are holding NVDA? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for NVIDIA Corporation (NASDAQ:NVDA – Free Report).

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Foyston Gordon & Payne Inc purchased a new position in NVIDIA Corporation (NASDAQ:NVDA – Free Report) during the second quarter, according to the company in its most recent Form 13F filing with the SEC. The firm purchased 47,475 shares of the computer hardware maker’s stock, valued at approximately $9,581,000. NVIDIA makes up 2.0% of Foyston Gordon & Payne Inc’s investment portfolio, making the stock its 19th biggest position.

Several other institutional investors and hedge funds have also recently bought and sold shares of the stock. LightSquare Wealth Management LLC raised its stake in NVIDIA by 0.3% during the 2nd quarter. LightSquare Wealth Management LLC now owns 18,695 shares of the computer hardware maker’s stock valued at $3,741,000 after purchasing an additional 49 shares during the period. Defender Capital LLC. lifted its holdings in shares of NVIDIA by 0.7% in the second quarter. Defender Capital LLC. now owns 7,534 shares of the computer hardware maker’s stock valued at $1,507,000 after purchasing an additional 50 shares in the last quarter. Kooman & Associates boosted its position in shares of NVIDIA by 0.6% in the second quarter. Kooman & Associates now owns 8,464 shares of the computer hardware maker’s stock worth $1,694,000 after buying an additional 50 shares during the period. Roof Eidam Maycock Peralta LLC boosted its position in shares of NVIDIA by 0.3% in the second quarter. Roof Eidam Maycock Peralta LLC now owns 18,827 shares of the computer hardware maker’s stock worth $3,767,000 after buying an additional 50 shares during the period. Finally, Persium Advisors LLC grew its holdings in shares of NVIDIA by 3.5% during the second quarter. Persium Advisors LLC now owns 1,466 shares of the computer hardware maker’s stock valued at $293,000 after buying an additional 50 shares in the last quarter. Institutional investors and hedge funds own 65.27% of the company’s stock.

Wall Street Analyst Weigh In NVDA has been the subject of several research analyst reports. Melius Research set a $420.00 price objective on NVIDIA in a research note on Thursday, August 27th. KGI Securities lifted their target price on NVIDIA from $335.00 to $345.00 in a research note on Thursday, August 27th. Daiwa Securities Group dropped their target price on NVIDIA from $255.00 to $245.00 and set an “outperform” rating on the stock in a report on Thursday, September 17th. Weiss Ratings reissued a “buy (b)” rating on shares of NVIDIA in a research report on Friday, October 2nd. Finally, Oppenheimer set a $315.00 price target on shares of NVIDIA and gave the stock an “outperform” rating in a report on Thursday, August 27th. Four equities research analysts have rated the stock with a Strong Buy rating, fifty have assigned a Buy rating and one has given a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Buy” and a consensus price target of $321.89.

Check Out Our Latest Stock Analysis on NVIDIA NVIDIA Trading Down 0.8% NASDAQ:NVDA opened at $237.36 on Thursday. The company has a market capitalization of $5.72 trillion, a P/E ratio of 30.01, a P/E/G ratio of 1.85 and a beta of 2.22. The stock’s 50 day moving average price is $221.38 and its 200 day moving average price is $208.88. The company has a debt-to-equity ratio of 0.14, a quick ratio of 3.85 and a current ratio of 4.59. NVIDIA Corporation has a 52 week low of $164.27 and a 52 week high of $243.37.

NVIDIA (NASDAQ:NVDA – Get Free Report) last posted 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. NVIDIA had a net margin of 63.66% and a return on equity of 96.04%. The company had revenue of $96.22 billion during the quarter, compared to the consensus estimate of $92.27 billion. During the same period in the previous year, the firm posted $1.05 earnings per share. The company’s revenue for the quarter was up 105.9% compared to the same quarter last year. On average, research analysts forecast that NVIDIA Corporation will post 9.25 EPS for the current fiscal year.

NVIDIA Announces Dividend The firm also recently disclosed a quarterly dividend, which was paid on Thursday, October 1st. Investors of record on Thursday, September 10th were issued a $0.25 dividend. The ex-dividend date was Thursday, September 10th. This represents a $1.00 dividend on an annualized basis and a yield of 0.4%. NVIDIA’s dividend payout ratio is currently 12.64%.

NVIDIA announced that its Board of Directors has initiated a share repurchase program on Monday, September 28th that authorizes the company to buyback $150.00 billion in shares. This buyback authorization authorizes the computer hardware maker to reacquire up to 2.8% of its shares through open market purchases. Shares buyback programs are typically a sign that the company’s leadership believes its shares are undervalued.

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

Positive Sentiment: SpaceX may become a major new customer. SpaceX is reportedly seeking approximately $40 billion in debt financing—potentially including bank loans and investment-grade bonds—to purchase NVIDIA GPUs for its AI infrastructure. The proposed transaction would reinforce demand for NVIDIA’s chips, although the debt-funded nature of the purchase raises questions about customer financing risk. Apollo, banks in talks to finance SpaceX’s $40 billion Nvidia GPU purchase Positive Sentiment: NVIDIA is expanding beyond data centers into PCs and edge AI. Microsoft unveiled the $2,599 Surface Laptop Ultra with an NVIDIA AI chip, while ASUS and other manufacturers began offering RTX Spark-powered systems for local AI workloads. This could broaden NVIDIA’s addressable market and create a new consumer and enterprise revenue stream. Microsoft to sell Surface Laptop Ultra containing Nvidia AI chip Positive Sentiment: AI infrastructure adoption remains widespread. NVIDIA-backed Lambda is reportedly targeting up to $4 billion in additional funding ahead of a planned IPO, while robotics, sovereign-AI and cloud-computing companies continue announcing deployments using NVIDIA platforms. These developments support the company’s ecosystem and long-term demand outlook. Nvidia-backed Lambda targets $4 billion raise Positive Sentiment: Analyst sentiment remains bullish. Morgan Stanley raised its price target, and consensus estimates cited by analysts imply additional upside. NVIDIA’s prior quarterly earnings beat and more-than-doubling revenue growth continue to support the bullish case. Neutral Sentiment: Market conditions are mixed. Rising oil prices tied to renewed Strait of Hormuz tensions pressured broader equities, while investors also remained focused on interest rates and Federal Reserve minutes. Negative Sentiment: Valuation and concentration risks are becoming more prominent. NVIDIA is approaching a $6 trillion market capitalization after a powerful rally, increasing the potential for profit-taking. Michael Burry has reportedly shifted to longer-dated put options on NVIDIA, citing the risk of an eventual AI downturn. Negative Sentiment: Trade and execution risks could weigh on the shares. Fresh tariff threats and concerns about margin compression, inventory levels and the sustainability of debt-financed AI spending are tempering enthusiasm. Investors may also be reluctant to chase the stock near record highs without evidence that earnings growth can continue to exceed elevated expectations. Insiders Place Their Bets In other NVIDIA news, Director Mark A. Stevens sold 622,239 shares of the business’s stock in a transaction dated Friday, September 4th. The stock was sold at an average price of $231.62, for a total value of $144,122,997.18. Following the completion of the sale, the director owned 2,336,531 shares of the company’s stock, valued at $541,187,310.22. The trade was a 21.03% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CFO Colette Kress sold 34,918 shares of the stock in a transaction dated Thursday, September 17th. The shares were sold at an average price of $219.05, for a total value of $7,648,787.90. Following the transaction, the chief financial officer directly owned 765,103 shares in the company, valued at approximately $167,595,812.15. This represents a 4.36% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 1,766,118 shares of company stock valued at $399,450,353 over the last three months. 3.94% of the stock is currently owned by insiders.

About NVIDIA (Free Report)

NVIDIA Corporation is a technology company that designs accelerated computing platforms, graphics processing units (GPUs), central processing units (CPUs), networking products and related software. Its technologies are used in artificial intelligence, data centers, scientific and technical computing, gaming, professional visualization, automotive systems and robotics.

The company’s products include GeForce GPUs and gaming software, data center computing platforms, networking solutions, and enterprise software for AI development and deployment.

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Nvidia (NVDA -0.74%) is often seen as the stock to buy for investors interested in betting on the artificial intelligence (AI) revolution. That's because the company's graphics processing units (GPUs) play a key role in the development and use of AI and have generated mind-boggling revenue growth.

Nvidia's annual revenue has climbed 700% over the past five years, reaching $215 billion in the last fiscal year. And the pace continues, with Nvidia itself for the first time offering annual revenue guidance -- the company expects 70% growth in the next fiscal year. Considering this, you may expect Nvidia stock to be expensive. But the stock isn't. In fact, it's reached bargain levels, trading at only 25x forward earnings estimates.

Is Nvidia, at this dirt cheap price, a buy right now? Here are the bull and bear cases to consider before making a move.

Image source: Getty Images.

Nvidia dominates the AI chip market thanks to its early entry into this space and its commitment to innovation. These two elements have kept it a step ahead of rival chip designers in the data center market. On top of this, Nvidia recently turned its attention to a fresh area of high potential: The company is in the process of launching its first stand-alone central processing units (CPUs).

These are the chips found in every computer, but here's why Nvidia is interested now: They are the key chips needed to power agentic AI, which involves AI considering a problem and taking steps to solve it. Agentic AI is seen as the next AI growth driver, so this clearly is an important area for Nvidia. The company already predicts $20 billion in CPU sales this year and has said it aims for market leadership in this space.

Nvidia, fellow chip designers, and cloud service providers have all delivered the same message quarter after quarter: Demand for AI continues to soar. And with the AI market forecast to reach into the trillions of dollars by the end of the decade, Nvidia is well-positioned to benefit.

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The Nvidia bear caseNvidia's revenue is highly dependent on AI, with data center revenue making up 92% of total revenue in the most recent quarter. So any slowdown in AI spending could significantly hurt Nvidia's earnings and, eventually, its stock price.

What could cause such a slowdown? If cloud service providers see lower customer demand, they might decide to delay investments. So far, this hasn't been the case, but it remains a possibility -- and even a temporary reduction in AI spending may be difficult for Nvidia.

Though rivals would find it difficult to unseat Nvidia, they still could capture more and more market share as they continue to innovate -- and if their innovations please the AI customer, this could eventually weigh on Nvidia's pricing power.

Finally, Nvidia's sales to China -- a key AI market -- were blocked by the U.S. government back in April of 2025. Even though the U.S. has since authorized such sales, China's government has encouraged the use of local chips over imports. This could limit Nvidia's growth potential over time, and eventually, China may develop high-performance rival chips.

Should you favor the bull or bear case?It's true that, in recent times, investors have worried about a potential slowdown in AI spending and the impact it may have on companies such as Nvidia. Demand today remains strong, with tech giants aiming to spend nearly $700 billion this year on infrastructure. Any slowdown could indeed represent a big hurdle for Nvidia, but it's unlikely that even this would alter the bright long-term AI story. Companies have already applied AI to some degree and seen its value, so they're likely to want to continue benefiting from the technology as it develops.

Meanwhile, Nvidia's venture into the CPU market offers the company a fresh growth driver in the quarters to come. With this complete picture in mind, and Nvidia's bargain valuation today, I favor the bull case and consider Nvidia a top AI stock to buy now.

SpaceX (SPCX -2.51%) ended June with $100 billion in cash, cash equivalents, and marketable securities, mostly from its $86 billion initial public offering (IPO) the same month. But the company now reportedly wants to borrow another $40 billion.

The rocket and artificial intelligence (AI) company is lining up around $10 billion in bank loans and $30 billion in investment-grade bonds to buy chips from Nvidia, according to a report on Tuesday. Asset manager Apollo Global Management is expected to lead the deal, which should close in 2027.

SpaceX already had about $39.5 billion in debt and finance leases at the end of June. Shares were down about 2% on Wednesday, near $168 as I write.

Image source: Getty Images.

Why borrow with $100 billion in the bank?The cash pile is huge, yet SpaceX is spending it fast, and the pace has been speeding up. Capital expenditures were $18.4 billion in the second quarter, up from $10.1 billion in the first quarter and $2.8 billion a year before. Of the latest total, $15.8 billion went to AI computing infrastructure. In the first half of 2026, SpaceX's operations brought in around $3.5 billion in cash, but capital spending was $28.5 billion.

Put simply, outside money is funding almost all the build-out.

And spending isn't expected to fall this year. On the August earnings call, CFO Bret Johnsen told analysts to expect capital spending in each of the next two quarters to be very similar to the second quarter's. Two more quarters like that would eat up around $37 billion, or over a third of the cash pile.

But next year looks even bigger. CEO Elon Musk said on the same call that SpaceX's computing capacity by the end of 2027 could be closer to 10 gigawatts than 5, compared to 1.4 gigawatts at the end of June. SpaceX also expects to close its purchase of EchoStar's wireless spectrum in late 2027, a deal that includes up to $8.5 billion to pay off EchoStar debt.

In short, the $100 billion probably can't fund the full plan. And a financing that closes in 2027 would arrive just as those bills come due.

Double the debtAt the end of 2025, SpaceX owed around $23.3 billion in debt and finance leases. By June, that had risen to $39.5 billion. The largest chunk is $25 billion in bonds sold in June, partly to repay a bridge loan, and most of the remaining $13.4 billion of other financing is linked to AI hardware.

Adding $40 billion would take the total to roughly $80 billion, about double. Still, SpaceX is worth about $2.3 trillion in the stock market, and none of the June bonds mature before 2031.

Borrowing has one edge over selling more stock: It doesn't add shares. SpaceX already issued around 391 million new shares to buy AI coding firm Cursor in August.

Debt also fits management's stated priorities.

"Across all three of these investments, we remain focused on capital efficiency, return on investment, and preservation of a strong investment-grade balance sheet," Johnsen said on the call.

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Starlink would be paying the interestI'd say the bigger cost shows up on the income statement. SpaceX's interest expense was $629 million in the second quarter, up 53% year over year and a bit under the first quarter's $664 million.

The reported terms don't give an interest rate. But if the new debt costs about what the June bonds did (a weighted average of 5.855%), $40 billion would add about $2.3 billion of interest a year, or roughly $585 million a quarter. That alone is bigger than SpaceX's entire $541 million net loss in the second quarter.

For now, Starlink is what makes the bill payable. SpaceX's connectivity segment, which includes the satellite internet business, earned $1.7 billion of operating income in the second quarter, but the AI segment lost $1.3 billion. Increasingly, profits from selling internet service might end up paying the interest on debt taken on to buy chips.

I don't think the borrowing is a red flag by itself. At this rate of spending, SpaceX was always going to need outside money, and debt is arguably easier on shareholders than more stock. But it raises the cost of being wrong.

At around 73 times sales (based on second-quarter revenue annualized), the stock already assumes the AI spending turns into profits. Billions of dollars a year of added interest leave less room if it doesn't. Until the AI segment makes enough to pay its own share of that bill, I think the price is too steep.

Nvidia's (NVDA -0.74%) graphics processing units (GPUs) are the foundational hardware that is powering the artificial intelligence (AI) revolution. Along with its leading position in advanced GPUs for AI, the company is also building its position in central processing units (CPUs) and other hardware used in data center tech stacks.

As a result of very strong demand for its AI-focused hardware products, the company made an unprecedented move with its latest quarterly report: It issued guidance for the subsequent fiscal year. CEO Jensen Huang cited having "a lot greater visibility" into its demand outlook as the reason for the move. Does this mean that Nvidia stock deserves to trade at premium valuation?

Image source: Getty Images.

First things first Nvidia stock has risen roughly 27% over the last year, and the AI hardware leader currently has a market capitalization of $5.77 trillion. Meanwhile, the company has a forward price-to-earnings (P/E) ratio of roughly 25.6. While Nvidia's forward P/E ratio represents a premium compared to the S&P 500 index average's forward P/E of roughly 19, that doesn't necessarily mean that the company is valued at a premium compared to its own growth. In fact, there's a solid case to be made that Nvidia could actually still be significantly undervalued based on the rate at which it's expanding earnings.

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Nvidia has a forward P/E value that looks high compared to the S&P 500 average, but the semiconductor company is growing earnings faster than nearly every other business in the index. Given that Nvidia's business is already highly scaled and commands the largest market capitalization of any company in the world, this is incredibly impressive.

Nvidia's growth outlook suggests the stock could have room to run In the second quarter of the company's 2027 fiscal year, which ended July 26, Nvidia's non-GAAP (adjusted) earnings per share increased 120% on the strength of a 106% increase for revenue. Meanwhile, the company's midpoint guidance for sales of roughly $108 billion in the current quarter suggests year-over-year growth of roughly 89% in the period. Crucially, the GPU frontrunner is guiding for its gross margin to remain very strong.

Next fiscal year, Nvidia expects annual sales growth of roughly 70% and continued strength for gross margins -- a bold forecast that Huang said is made possible by greater visibility on the demand outlook. With forecasts for that level of sales growth and guidance for a gross margin between 72% and 73%, there's a good chance that Nvidia will record growth for adjusted earnings per share above 70% in fiscal 2028. With that level of earnings growth seemingly on the horizon, Nvidia stock may actually deserve a much higher valuation multiple than it currently commands.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Watch Satya Nadella and the Windows team introduce the next era for Windows including more trustworthy AI Agents, The Surface Laptop Ultra and NVIDIA powered laptops and PCs for creators and developers. Read more about the Windows Event on CNET.com Surface Laptop Ultra Preorders: Everything Announced at Microsoft's Windows and Surface Event https://zdcs.link/aBokB8 Timecode Chapters: 0:00 Introduction: Agent 365, Microsoft IQ, and Copilot 1:22 Microsoft Execution Containers (MXC) & Agent Containment 2:32 Agent Identity, Observability & Enterprise Management 3:32 Microsoft Defender Agent Security & Risk Containment 4:58 Hybrid Intelligence & Local Model Execution 5:45 MAI Code 1.1 Flash & Local Model Compression 6:34 New Windows 11 Taskbar Search & Quick Actions 7:45 Copilot App Integration & Native App Creation 9:10 Copilot Autopilot: Autonomous File & Email Workflows 11:00 Surface Laptop Ultra Announcement & Performance 11:56 NVIDIA RTX Spark & Gaming Announcements 12:20 Surface Laptop Ultra Hardware Specs & Magnetic USB-C 13:48 Surface RTX Spark DevBox & Pre-Orders 14:13 RTX Spark Laptop Ecosystem (Lenovo, ASUS, Dell, MSI, HP) 15:10 NVIDIA DGX Station for Windows & Desk-Side AI Performance Video Credits: Producer: Stephen Beacham Video Editor: Stephen Beacham Thumbnail Designer: Add CNET as a trusted news source https://www.google.com/preferences/source?q=cnet.com Never miss a deal again!

Nvidia (NVDA -0.74%) was once only known as the leading provider of graphics processing units (GPUs) for the video game industry. But it leaned on its strengths, helping other industries find uses for its GPUs over the years. And in recent years, the leads it gained in developing parallel processors and attracting developers to create code for them on its CUDA platform positioned it to become the top provider by far of accelerator chips for the artificial intelligence (AI) infrastructure build-out. The gains that its long-term investors have captured thanks to that multitrillion-dollar spending spree are truly incredible.

If you'd invested $1,000 in this AI stock 10 years ago, here's how much your stake would be worth today.

Image source: The Motley Fool.

Nvidia shares have generated a total return of 13,930% in the last 10 years (as of Oct. 6). This phenomenal gain would've turned a starting $1,000 investment into more than $140,000 today. The momentum has continued this year, with the stock up 28% in 2026.

Investors would struggle to find any stocks that have performed better since October 2016. Getting into this chipmaker ahead of a generational technological secular trend paid off for those who did so and held on.

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Nvidia is arguably the most important business in the world right now, as it sits at the center of the AI boom. Revenue growth, driven by insatiable demand for its data center graphics processing units, has been a key catalyst benefiting investors.

Profits have been more impressive, though. Diluted earnings per share (EPS) climbed 128% year over year in its fiscal 2027 Q2 (which ended July 26). The consensus view among sell-side analysts following Nvidia is that its EPS will rise at a compound annual rate of 65% from fiscal 2026 to fiscal 2029 as its large customers keep spending to expand their compute capacity.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Two of the biggest megatrends gripping Wall Street and Main Street alike are the space economy and the rise of artificial intelligence (AI). Developments in each of these dynamic fields are changing investor perceptions about what is possible and mark paradigm shifts in technology.

Space Exploration Technologies (SPCX -2.15%), aka SpaceX, is one of the most intriguing names in space stocks, and Nvidia (NVDA -0.80%) gets the nod for enabling the expansion of AI thanks to advances in its graphics processing units (GPUs).

The two companies are already AI partners, but recent reports suggest the pair are taking that partnership to the next level.

Image source: The Motley Fool.

Signing a big checkSpaceX and its CEO, Elon Musk, are in active discussions to raise $40 billion to finance the purchase of Nvidia processors, according to a report that first appeared in the Financial Times. The company is seeking to fund the purchase through a combination of roughly $10 billion in bank loans and another $30 billion in high-grade debt.

The rocket launch, satellite, and AI company secured a BBB credit rating soon after its initial public offering (IPO) earlier this year. As a result, SpaceX's investment-grade bonds are attracting capital from high-profile institutions, including private equity firm Apollo Global Management and Pacific Investment Management Company (PIMCO), among others.

This report should come as no surprise to investors. Musk had previously shared a vote of confidence for Nvidia chips, saying that SpaceX would only use Nvidia for AI:

SpaceX has committed to using Nvidia GPUs exclusively because they are the best

— Elon Musk (@elonmusk) August 4, 2026 Musk went even further during SpaceX's Q2 earnings call in August:

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

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Given the close ties between SpaceX and Nvidia, investors shouldn't be surprised by the revelation. Moreover, during the SpaceX earnings call, Musk noted that the company planned to have 2 gigawatts of compute online by the end of 2026, up from 1.4 gigawatts currently. He also said the company expects to have "closer to 10 gigawatts of compute than 5 gigawatts of compute" online by the end of next year. That's several times higher than the current level.

The cost to generate 1 gigawatt of AI compute can range from $40 billion to $50 billion, with 50% of that spent on GPUs. That suggests a $40 billion purchase of Nvidia GPUs could translate into roughly 2 additional gigawatts of compute capacity for SpaceX.

Rising capacity will provide additional growth opportunities for SpaceX's AI segment. In Q2, revenue for the segment grew 247% year over year and 213% quarter over quarter to $2.6 billion. Furthermore, the company inked deals worth more than $14 billion to provide customers with access to its compute capacity.

SpaceX isn't yet profitable and still faces several technological hurdles for its Starship rocket and proving the viability of deploying data centers in space. Moreover, the stock is currently valued at 106 times sales. That said, the company's stunning growth and increasing backlog suggest the stock may not be as costly as its multiple suggests.

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What it means for Nvidia investorsNvidia has shaken off concerns from earlier this year about the durability of AI innovation and concerns about circular financing. Indeed, the stock was recently near a new all-time high and closing in on a $6 trillion market cap, making it the world's most valuable company.

Yet most experts believe the opportunity ahead is vast for Nvidia. In its 2027 second quarter (ended July 26), revenue grew 106% year over year to $96.2 billion, and earnings per share (EPS) of $2.46 soared 128%. For the full year, the company is on track to deliver $412 billion in revenue and $9.31 in EPS, up 90% and 95%, respectively.

Despite the opportunity, Nvidia continues to sell at a discount of just 25 times forward earnings and 15 times next year's expected earnings -- so the stock is attractively priced, particularly in light of the vast opportunity represented by AI.

Mecka AI has raised $60 million in Series B funding led by Sequoia Capital, with backing from Nvidia, Microsoft's M12 and Qualcomm, as it builds technology to help robots understand and operate in the physical world. CEO and cofounder Josh Gao discusses the enormous data challenge facing robotics, how Mecka captures everything from physical interactions to force and pressure, and why scaling physical AI will require major investments across sensors, infrastructure and real-world data collection.

Microsoft said its new laptop containing an Nvidia AI chip will start at $2,599, as the software maker tries to bring more artificial intelligence capabilities to its consumer devices.

The Surface Laptop Ultra is now available on preorder and will begin shipping on Oct. 16, Pavan Davuluri, Microsoft's executive vice president of Windows and devices, said at a company event in San Francisco on Wednesday. The computer has the world's first magnetic USB-C port, similar to Apple's MagSafe charging connector, along with two other standard USB-C ports, Microsoft said in a blog post.

While Microsoft Windows is the most popular operating system for PCs, the company isn't among the top six PC vendors in terms of unit shipments, according to an estimate from researcher Gartner. As the AI boom matures and chip technology advances, tech giants including Microsoft, Apple and Google are aiming to allow users to run more AI workloads from their devices rather than relying on the cloud.

Users can install and run a variety of models on the new laptop without having to worry about racking up high monthly bills. Microsoft first talked about the Surface Laptop Ultra in May, but is just now providing specifics.

"Microsoft might get me back to Windows," Max Weinbach, an analyst at Creative Strategies, wrote on X after the announcement.

Davuluri also said that Meta will introduce a version of its popular Muse AI agent for Windows, capitalizing on the surging popularity of the personal agent, which has jumped to the top of Apple's App store, surpassing ChatGPT.

Microsoft is still trying to solidify its role as a key player in AI. The company offers its own AI models, but they're less popular than leading models from OpenAI and Anthropic and aren't at the forefront in terms of performance, according to one benchmark. Developers are more likely to have used alternatives, according to a recent survey.

This isn't the first time Microsoft has sought to use the AI boom as a way to boost sales of its devices.

In 2024, the company introduced the Copilot+ PC standard, requiring the inclusion of neural processing units that ensure a minimum level of AI performance, along with compliant Surface computers. But Microsoft has since "simplified product naming to lead with the Surface brand, while continuing to deliver premium hardware and hybrid AI experiences," a spokesperson said.

The new device can contain up to 128 gigabytes of unified memory and supply up to one petaflop of computing power. The Blackwell RTX Spark GPU inside the computer has as much processing power as Nvidia's DGX-1 data center server from 2016, which cost $250 million, Nvidia CEO Jensen Huang said at Wednesday's event.

A presenter showed how apps on the Surface Laptop Ultra can route some AI coding requests run on the computer's local GPU, displaying a green leaf icon, and others to the cloud. Through Windows 11, developers can confine coding agents to Microsoft Execution Containers that will prevent unwanted system access.

Microsoft is updating its Windows 11 device setup experience to help people get started quickly with open-source OpenClaw AI agent software.

Microsoft has been releasing its own computers since 2012, and CEO Satya Nadella indicated on Tuesday that the company's position in the market is evolving.

"I think today is the day we'll start talking and thinking about the frontier ecosystem taking maybe slightly different contours two years from now, five years from now, 10 years from now," Nadella said at the event. "That classic edge that distributed computing will always remain distributed will be more true."

Powered by Nvidia's RTX Spark chip, the latest Windows laptop is designed to run AI models and workloads directly on the device.

Investors looking for ways to profit from artificial intelligence (AI) have an interesting choice heading into 2027. On one side is Nvidia (NVDA -0.81%), the company that essentially supplies the picks and shovels of the AI boom. On the other is Space Exploration Technologies (SPCX -2.97%), which has evolved from a rocket company into a vertically integrated technology platform spanning Starlink, AI infrastructure, government contracting, and space exploration.

Both companies have enormous catalysts heading into 2027 and each stock comes with expectations that leave little room for disappointment. But if I had to choose only one for next year, I think the answer comes down to a surprisingly simple idea: which company has the more predictable path to turning AI spending into profits?

Image source: The Motley Fool.

Nvidia's next big opportunity is already here The biggest catalyst for Nvidia stock in 2027 is the transition from the Blackwell chip architecture to the Vera Rubin platform. Rubin isn't some distant product roadmap. Management says the platform is already ramping into full production, with systems running at Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure, CoreWeave, and Nebius. For the third quarter, Nvidia's server CPU ecosystem, which includes Rubin, is expected to generate $20 billion in revenue and is on pace to more than double by next year.

Rubin is arriving while Nvidia's existing businesses are still growing at a staggering pace. During the second quarter, the company's revenue reached $96.2 billion, up 106% year over year. As usual, the data center segment was the star of the show -- generating $89 billion of revenue and soaring 117% year over year. Management guided third-quarter revenue of approximately $108 billion.

The interesting part of this forecast is that it does not assume any compute revenue from China. This highlights one of Nvidia's biggest potential catalysts for 2027. If China becomes a meaningful market again, Nvidia could have upside that isn't currently reflected in its guidance.

There are risks when it comes to buying Nvidia stock. Alphabet, Amazon, Microsoft, and Meta Platforms are developing custom AI chips. Meanwhile, Advanced Micro Devices continues to win deals with hyperscalers as it tries to take market share in the GPU and CPU landscapes. At a macro level, Nvidia will also need AI infrastructure spending to remain elevated.

SpaceX could be a bigger growth story in the long-run SpaceX enters 2027 from a much different position. In the second quarter, the company's revenue nearly doubled to $7.8 billion. Growth was primarily fueled by Starlink and AI infrastructure.

SpaceX has signed billions of dollars of AI compute agreements with Anthropic, Google, and Reflection AI. In addition, management recently disclosed two other cloud hosting agreements expected to contribute roughly $1.11 billion of monthly revenue beginning in December as well as another six-month, $6.7 billion capacity deal.

SpaceX says its combined businesses are on track to reach $100 billion in annualized run-rate revenue by the end of the year. Management also expects cumulative compute capacity to approach 10 gigawatts by the end of 2027, underscoring the importance of AI to the growth narrative.

This creates an interesting flywheel. At scale, SpaceX can generate cash from Starlink and its launch cadence and reinvest into AI infrastructure. In the long-run, the company can use Starship to deploy next-generation communications and compute infrastructure into orbit. Taken together, SpaceX believes its rockets, connectivity, and AI infrastructure create a $28.5 trillion addressable market.

The problem is cost. SpaceX spent $18.4 billion on capital expenditures (capex) during the second quarter alone and remains free cash flow negative. Smart investors understand that spectacular growth doesn't necessarily guarantee a stock will rise if enormous capital outlays are required.

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SpaceX may have a larger opportunity in the long-run. But for 2027 specifically, Nvidia is my better stock to buy. The reason isn't that SpaceX lacks meaningful catalysts. In fact, it's almost the opposite. SpaceX is simultaneously scaling Starlink, building AI data centers, developing Starship, expanding government operations, and pursuing space-based infrastructure. If these bets pay off, today's business will look much different down the road.

Nvidia offers something I value more over the next year: visibility. For Nvidia, AI spending is already translating into enormous revenue, high gross margins, and substantial cash generation. Rubin provides a new product cycle heading into next year, while unrelenting demand from hyperscalers, frontier labs, sovereign governments, and enterprises continues expanding.

NVDA Revenue (TTM) data by YCharts

Nvidia's recently expanded share repurchase program also gives it another quiet advantage. The company now has $235 billion remaining under its authorization, providing significant firepower to buy back stock through next year. When combined with an attractive valuation profile, Nvidia is hard to pass up.

While SpaceX may be a more exciting story heading into 2027, the reality is that the company could bring more unpredictable surprises than I'd like to see. When I'm choosing between two growth stocks, I'd rather own the company where secular tailwinds are already producing recurring profits than the one still spending aggressively to build its next engine. For this reason, I think Nvidia offers a cleaner investment setup. SpaceX should belong on a watchlist, but I see Nvidia stock as the more prudent choice for 2027.

According to some analysts, artificial intelligence (AI) infrastructure spending will reach a cumulative total of $31.6 trillion through 2050. To put that in perspective, the entire GDP of the U.S. was $30.77 trillion last year. In other words, the AI industry could grow by leaps and bounds over the long run, and plenty of companies could capitalize on that and make their shareholders richer in the process. With that said, let's consider two AI stocks to buy right now and hold onto for the next decade: Nvidia (NVDA -0.81%) and Amazon (AMZN +1.17%).

Image source: The Motley Fool.

1. Nvidia Nvidia has been one of the biggest winners from the AI boom so far. The company dominates the market for GPUs (graphics processing units), the defining hardware of the first wave of the recent AI revolution. Nvidia benefits from a wide moat from switching costs thanks to its CUDA ecosystem. However, some investors worry that the company's prospects are no longer what they once were.

With increased competition and many companies increasingly relying on custom AI chips, Nvidia could see revenue and earnings growth slow considerably in the next few years. These are reasonable concerns, but in my view, Nvidia's outlook appears bright despite these potential problems.

Here are three reasons why. First, Nvidia isn't just a GPU company anymore. The semiconductor specialist offers a complete AI platform, from hardware like GPUs and CPUs to networking and cloud services.

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Nvidia sees a large addressable opportunity in some of those niches. For instance, the company has identified a $200 billion opportunity in the CPU market. Second, Nvidia generates significant cash flow and is using it, in part, to return capital to shareholders. In May, it increased its quarterly dividend per share by 2,400% to $0.25. And recently, the tech leader announced a massive increase in its share repurchase program. Third, Nvidia is trading at reasonable levels relative to its growth potential.

The company is trading at 24.9x forward earnings, versus an average of 20.9x for information technology stocks. Considering how fast the company's revenue and earnings have been growing, that valuation is more than fair. These are all good reasons why it's not too late to invest in the stock.

2. Amazon Amazon is best known to most consumers as an e-commerce leader, and with good reason. The company has the largest share of the U.S. e-commerce market. However, Amazon's cloud business, Amazon Web Services (AWS), has long been its most important driver of operating profits.

Sales growth within AWS has accelerated in recent quarters, partly due to the impact of the company's AI offerings. In the second quarter, AWS revenue came in at $42.2 billion, up 37% year over year, the segment's fastest growth rate in 18 quarters. Amazon's total revenue increased 20% year over year to $200.6 billion. Note that even though AWS accounted for just 21% of the company's top line, its impact on operating income was much bigger.

Amazon's total operating income was $27.5 billion, up 43% year over year. AWS's operating income came in at $16.6 billion, 60% of the total, up almost 63% from the year-ago period.

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Several factors could allow Amazon's cloud business to continue growing at a good pace for the foreseeable future. For instance, the company is doubling down on its custom AI chips, including its Trainium franchise, which, as the company has pointed out, are better on price performance than comparable GPUs. So, these chips could help the company keep operating expenses in check and improve margins. Meanwhile, management has said the company cannot meet all demand for its cloud services in 2026, and it already has demand visibility extending into 2028.

Further, Amazon ended the quarter with a $496 billion backlog, which is growing by triple digits year over year. In other words, there remains a vast addressable market ahead for the company. Over the next decade, it could tap into opportunities in cloud computing, while its other segments should also make solid progress. That's why it's worth it to buy and hold Amazon stock.

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Apollo Capital Management and several banks are in discussions with SpaceX to help facilitate the company's purchase of $40 billion worth of Nvidia graphics processing units, according to a person familiar with the talks who asked not to be named to discuss the matter.

The deal will primarily rely on the investment-grade debt market, which SpaceX just tapped four months ago, the person said.

Two weeks after its record-breaking IPO in mid-June, the space exploration company raised $25 billion in bonds at different durations. CNBC was told at the time that SpaceX's bond sale saw incredibly high demand, highlighting strong interest from fixed-income investors.

But since then, AI-related bonds have sold off, while credit spreads have widened.

SpaceX's $40 billion debt deal will likely use GPUs as collateral and Apollo Capital is said to be playing a leading role in facilitating the financing, the person said.

Apollo declined to comment. Nvidia did not immediately respond to a request for comment.

The market is still operating under the expectation that GPUs hold their value for about seven years, according to a person in the credit industry who asked not to be named to discuss the matter. Computing power is scarce and the shortage is not expected to abate anytime soon, which supports the value of high-performing GPUs.

The Financial Times was first to report on the financing talks.

While a bond deal of this size is notable, it follows a series of bond issuances from Meta, Amazon and Google as the cost to fund the AI buildout gets more expensive.

Both sources told CNBC that more debt sales are expected, fixed-income investors are demanding a higher yield to service the debt, a sign that participants are becoming more selective about their AI exposure.

Read more CNBC tech newsGoogle unveils latest AI model, but Wall Street wants a breakout personal agentFormer LinkedIn chief Roslansky to leave Microsoft, following other exec departuresSpaceX launches Google AI chips into orbit in push toward space-based data centersTrump's AI lunch included every major tech company. Except Apple

Bloomberg's Ed Ludlow takes a look at SpaceX in talks with banks and investors to borrow $40 billion to buy chips from Nvidia. Plus, Apple plans its entry into the smart home space with a doorbell, thermostat, and other accessories developed with LG; and JD Moriarty, Vice Chair and head of Global Tech Equity Capital Markets at Bank of America Securities, discusses the upcoming mega AI IPO pipeline.

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NVDA buy

Buy NVDA. Catalysts (SpaceX chip purchases, hyperscaler capex, Gartner’s +50% AI spend) support upside to earnings, and the $150B buyback plus conservative guidance history strengthens the “results beat” case. Technicals also back it: breakout above $235 and holding above the 50-day moving average.

Key Risk: AI spending slows sharply or guidance disappoints, making the buyback insufficient to offset weaker demand.

AI capex beneficiaries buy

Buy ASML. If AI capex keeps accelerating, leading-edge chipmaking equipment demand rises next, and ASML is a key bottleneck supplier. This is the “picks-and-shovels” second layer behind GPU demand.

Key Risk: A bond-yield shock or recession hits semiconductor capex plans, cutting orders for new lithography systems.

Nvidia stock has stayed in an upward trend this year and is now hovering near its all-time high as several catalysts emerge. It peaked at $243 on Tuesday before paring back some of those gains to trade at $239. Still, a crucial bearish chart pattern is forming ahead of the third-quarter earnings report.

There are signs that Nvidia’s demand is soaring. As we wrote earlier, Elon Musk’s SpaceX is in the process of raising $40 billion from Apollo Global to buy its chips. 

Other companies in the tech industry are also raising funds to do this. In Australia, Firmus is about to raise over $5 billion in an initial public offering. It plans to use some of these funds to buy Nvidia chips. 

Nscale, a British neocloud company, is also in the process of raising $3 billion at a $35 billion valuation. Lambda, a company that Nvidia backs, is also raising funds to scale its data centers. 

Most importantly, top hyperscalers plan to continue spending this year. In a recent note, Gartner predicted that AI spending will jump by 50% this year to $2.7 trillion. All this will benefit Nvidia, the biggest GPU provider in the world.

This trend suggests that Nvidia's revenue growth will likely exceed expectations. Analysts had forecast about 40% revenue growth for 2027, but when the company released its numbers, it guided for growth of about 70%. Nvidia has also historically set conservative guidance, which means its actual results often come in above its own forecasts.

Nvidia’s strong growth explains why the management has accelerated the share buyback plan. It announced a $150 billion buyback last week on top of the continuing $80 billion that it is executing. Data shows that its outstanding shares have dropped to 24.15 billion, down from a 2025 high of 25 billion.

The repurchase is also a sign that the management believes that the company is highly undervalued. It has a forward price-to-earnings ratio of 25, which is much lower than the five-year average of 42. 

Still, the risk is that some analysts believe that the AI bubble is about to burst. In a statement this week, billionaire Ray Dalio warned that the burst will be caused by the rising US bond yields. 

Analysts remains optimistic about Nvidia shares. BNP Paribas analysts reiterated their outperform rating and a target of $345. Cantor Fitzgerald analysts have a target of $350, while Rosenblatt hiked to $390.

NVDA stock chart | Source: TradingView

The daily chart shows that Nvidia shares have been in an upward trend this month. It jumped to a high of $243 as the rally gained steam. 

The stock has already jumped above the crucial resistance level of $235, its highest swing in May this year. Moving above that level confirmed a bullish breakout. It has remained above the 50-day moving average and the Supertrend indicator.

The risk, however, is that the stock has formed a rising wedge pattern, which is made up of two rising and converging trendlines. This pattern often leads to a bearish breakout, especially when the two lines are nearing their confluence. 

Simon Leopold, Raymond James equity analyst, sees shares Nvidia rising to $515. The stock is trading near a record high with SpaceX reportedly in talks to raise $40 billion to buy Nvidia chips.

The AI boom is starting to create a different kind of market question: not how much computing companies need, but how much debt investors are willing to provide to build it. Space Exploration Technologies Corp. (NASDAQ:SPCX) is becoming an unusually revealing test, with a reported $40 billion financing plan for Nvidia Corp (NASDAQ:NVDA) chips arriving only months after the company raised $25 billion through its first bond sale.

AI Is Getting More ExpensiveSpaceX’s reported financing would include about $10 billion of bank loans and $30 billion of investment-grade debt. The proposed deal, expected to close in 2027, would fund purchases of Nvidia chips as SpaceX expands its AI infrastructure.

The scale matters because SpaceX has already demonstrated how quickly its financing needs can grow. The company raised $85.7 billion in net proceeds from its June IPO, according to its SEC filing, and then issued $25 billion of investment-grade senior notes later that month.

After that bond offering, SpaceX reported $38.4 billion of total debt as of June 30, compared with $22 billion at the end of 2025. Its June bond deal carried interest rates ranging from 5.35% to 6.65%, with a weighted average rate of 5.855%.

That does not mean SpaceX is in financial trouble. Quite the opposite: the company has access to investment-grade credit and enormous equity-market backing. But it does illustrate how quickly an AI infrastructure strategy can turn into a financing strategy.

The Debt Is SpreadingSpaceX is hardly alone.

Oracle Corp (NYSE:ORCL) said it expected to raise $45 billion to $50 billion during 2026 through a combination of debt and equity to expand Oracle Cloud Infrastructure, citing contracted demand from customers including Meta Platforms Inc (NASDAQ:META), Nvidia, OpenAI and others.

CoreWeave, Inc. (NASDAQ:CRWV), meanwhile, has built a financing model around borrowing against AI infrastructure and customer contracts. In August, the company closed a $2.6 billion loan facility backed by customer commitments.

The broader market is already noticing the shift. Neuberger Berman estimated that hyperscaler, data-center and semiconductor financing had reached roughly $165 billion before the midpoint of 2026, about $27 billion more than the entire 2025 total.

The implication is bigger than SpaceX. AI infrastructure is becoming one of the largest new sources of corporate borrowing, which means the next phase of the AI trade will depend not only on demand for chips and computing, but also on the willingness of credit investors to keep funding the buildout.

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Investors Have a New AI MetricFor equity investors, that creates a less obvious metric to watch: the cost of capital behind AI growth.

A company can have enormous demand for computing and still face a different question if financing becomes more expensive. Higher borrowing costs can reduce the economics of data centers, chips and AI services before demand itself weakens.

SpaceX therefore offers an early test. If investors continue absorbing enormous AI-related debt at investment-grade rates, the industry’s spending cycle can keep expanding. If lenders begin demanding substantially higher compensation for that risk, the AI boom could encounter its first serious constraint not in computing capacity, but in the capital markets.

Watch what happens to the next wave of AI-related debt issuance — particularly its pricing, investor demand and credit ratings. SpaceX’s $40 billion proposal is significant, but the more important signal for stocks such as SPCX, NVDA, ORCL and CRWV may be whether Wall Street continues treating AI infrastructure as an investment opportunity worth financing at scale.

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