Nvidia Corp. is on the verge of becoming the first company with a market capitalization of $6 trillion. This comes as investors once again turn their attention to the AI chipmaker. UNN reports this, citing Bloomberg.
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The shares once again reached a record high after the company provided an optimistic revenue forecast and announced the largest share buyback in its history, taking advantage of a valuation close to multi-year lows. These two pillars — strong growth and a cheap multiple — stand out, especially given high interest rates and sluggish economic data, the publication writes.
"Nvidia is attractive from both a growth and a value perspective, and it appears to be a refuge from any harm that higher rates may inflict on the economy," said Jim Awad, senior managing director at Clearstead Advisors, which owns Nvidia shares. "All of that makes it such an attractive proposition here and a place people should continue to turn to if they have concerns," he noted.
The shares have risen 28% this year, driving a $1.2 trillion increase in Nvidia's market capitalization and bringing it close to $5.8 trillion. The company is also the largest contributor to the S&P 500 Index's 14% gain in 2026.
The move is particularly impressive given that on March 30 the shares were down 11% for the year, as investors questioned the hundreds of billions of dollars spent on artificial intelligence infrastructure. Since then, sentiment toward AI has changed, and more existential questions about the potential threats it poses to humanity are now at the center of attention. Meanwhile, inflation risks and the likelihood of the US Federal Reserve raising interest rates have made mega-cap technology companies such as Nvidia relatively safe for investors, the publication writes.
"As concerns about higher rates materialize, money starts moving into these large-cap technology stocks because they are somewhat more resilient to rising rates," said Larry Tentarelli of Blue Chip Daily, adding that the semiconductor sector has also experienced an AI-driven recovery fueled by Meta Platforms Inc.'s Muse AI agent. There is "a significant rotation into semiconductor companies, a significant rotation into mega-cap companies, and both of these factors are favorable for Nvidia."
The appeal to investors was underscored by Nvidia authorizing an additional $150 billion under its existing share-buyback program, which Chief Executive Officer Jensen Huang said "reflects our confidence in the long-term opportunities ahead." Before that, he called Nvidia "the world's first and only appreciating asset stock."
Wall Street generally likes buybacks because they represent payouts to shareholders and reduce the number of shares outstanding, boosting earnings per share. Nvidia's buyback is unique among major technology companies, which are largely using their funds for artificial intelligence spending, with the exception of Apple Inc., the publication writes.
The buyback "is what investors want to see" because it shows that the company is "sharing the wealth of its insanely high profits with investors," Mizuho Securities analyst Jordan Klein wrote in a September 28 note to clients.
Although there is an argument that share buybacks are merely a way for companies to inflate their earnings per share without organic growth, that is unlikely to apply to Nvidia. In its previous report, the chipmaker forecast that sales would grow by 70% in fiscal 2028, significantly above the expected 45% growth, the publication notes.
"The reason the company is able to make this enormous buyback is that it is growing so quickly that it has more money than it knows what to do with," said Awad of Clearstead. "It remains at the forefront of the artificial intelligence revolution, which shows no signs of slowing, and the demand it is seeing appears insensitive to rising rates, adding confidence in its resilience."
Nvidia's net income is expected to double in fiscal 2027, which ends in January, while revenue is projected to rise 90%. A year earlier, both figures increased by 65%.
But even taking all this into account, Nvidia is still trailing the broader semiconductor sector this year. The Philadelphia Stock Exchange Semiconductor Index has risen 86% in 2026, driven by companies such as Micron Technology Inc., Marvell Technology Inc. and Intel Corp., whose share prices have climbed more than 200%, even though they are trading below the record highs reached earlier this year.
AI boom - Nvidia increases share buyback program to a record $235 billion28.09.26, 16:34