On October 2, Nvidia broke past its previous high from May during trading, setting a new all-time high. Its market cap returned to $5.7 trillion, and the stock rose about 2.4% that day (depending on the source, between 2.34% and 2.51%), closing at around $236. On the same day, the Nasdaq rose 1.43%, the S&P 500 gained 1%, and the Dow rose 0.75%.
But what I want to say is that this new high had little to do with earnings driving the stock. The earnings report came out a month ago: last quarter’s revenue was about $96.2 billion, up 106% year over year and a record for any single quarter. The company also expects revenue growth of about 70% in fiscal 2028. The market had already fully priced in these figures. The real new development on October 2 was an additional $150 billion in share repurchase authorization, bringing the total to $235 billion, with the plan to be carried out before fiscal 2028. Add to that the 64GB configuration of DGX SPARK going on sale this month through major partners, becoming available on October 23 at a starting price of $4,999, and capable of running models with up to 100 billion parameters locally—and you have two pillars: “narrative + real money buying.”
My view: at a level like $NVDAB , I think the main thing being priced into this new high is the certainty of buybacks, not the elimination of uncertainty around AI demand. Buybacks are disciplined buying and tend to be more resilient than sentiment-driven buying, but they use cash to reduce the share count; they don’t change the cyclical nature of downstream capital spending. What will determine how much further this rally can go has never been Nvidia’s own guidance, but its customers—the cloud providers—and the guidance they give in their next capex reports. The significance of an all-time high is that it clears out underwater holders, but it can’t erase the cycle.
Here’s a more specific question: in your view, how much of Nvidia’s $5.7 trillion market cap reflects the pricing in of “AI inevitability,” and how much is being supported by the “$235 billion in buybacks”? How would you estimate that split?
#NvidiaStockHitsAllTimeHighUp2.4%
But what I want to say is that this new high had little to do with earnings driving the stock. The earnings report came out a month ago: last quarter’s revenue was about $96.2 billion, up 106% year over year and a record for any single quarter. The company also expects revenue growth of about 70% in fiscal 2028. The market had already fully priced in these figures. The real new development on October 2 was an additional $150 billion in share repurchase authorization, bringing the total to $235 billion, with the plan to be carried out before fiscal 2028. Add to that the 64GB configuration of DGX SPARK going on sale this month through major partners, becoming available on October 23 at a starting price of $4,999, and capable of running models with up to 100 billion parameters locally—and you have two pillars: “narrative + real money buying.”
My view: at a level like $NVDAB , I think the main thing being priced into this new high is the certainty of buybacks, not the elimination of uncertainty around AI demand. Buybacks are disciplined buying and tend to be more resilient than sentiment-driven buying, but they use cash to reduce the share count; they don’t change the cyclical nature of downstream capital spending. What will determine how much further this rally can go has never been Nvidia’s own guidance, but its customers—the cloud providers—and the guidance they give in their next capex reports. The significance of an all-time high is that it clears out underwater holders, but it can’t erase the cycle.
Here’s a more specific question: in your view, how much of Nvidia’s $5.7 trillion market cap reflects the pricing in of “AI inevitability,” and how much is being supported by the “$235 billion in buybacks”? How would you estimate that split?
#NvidiaStockHitsAllTimeHighUp2.4%