Key Highlights

● NVDA shares rose 2.12% to $238.90 on Monday, October 5, on Volume of about 127 million shares, roughly 20% above normal.

● The rally lifted Nvidia's Market Value to about $5.76 trillion, leaving it roughly 4% short of a $6 trillion milestone.

● Foxconn reported third-quarter Revenue of about NT$3.03 trillion, up 47% from a year earlier, with September its first month ever above NT$1 trillion.

● Nvidia guided to third-quarter revenue of $108.0 billion, plus or minus 2%, excluding Data Center compute sales to China.

Nvidia (NASDAQ:NVDA) headed Monday's most-active table on a mix of record-setting momentum and fresh evidence that the AI hardware build-out is still accelerating. The chipmaker rose 2.12% to close at $238.90, and roughly 127 million shares changed hands, about 20% above its normal pace. At that price, more than $30 billion of Nvidia stock traded in a single session, the largest dollar volume of any US-listed company on the day.

What's driving the volume

The rally extended a run that began the previous week. On Friday, October 2, Nvidia logged its first record close since May, leaving its market value less than $300 billion short of $6 trillion, a level no public company has ever reached. Monday's gain pushed the valuation to about $5.76 trillion, and market commentary noted open chatter about the stock crossing the $6 trillion mark soon.

The most concrete catalyst came from Taiwan. Foxconn, the contract manufacturer that assembles a large share of the world's AI servers, reported third-quarter revenue of about NT$3.03 trillion, up 47% from a year earlier and ahead of analyst forecasts, with September becoming its first month ever above NT$1 trillion. Because Foxconn builds racks that are packed with Nvidia processors, investors read the figures as an independent check on demand. Monday's move was tied directly to the Foxconn report, and Taiwan Semiconductor (NYSE:TSM) and Broadcom (NASDAQ:AVGO) rallied alongside Nvidia.

The broader tape helped as well. The Nasdaq Composite rose 1.05% even as the 10-year Treasury Yield climbed to 5.31%, its highest level since 2002. Softer-than-expected jobs data reduced expectations of further Federal Reserve rate hikes, and investors leaned back into large technology names. With a weighting at the top of the S&P 500 and the Nasdaq-100, Nvidia also tends to absorb heavy index-related and institutional flows whenever money rotates into tech.

The business

Nvidia designs the graphics processors, networking gear and software that most large AI models are trained and run on. It is a fabless company: it designs chips and full rack-scale systems, while partners such as TSMC manufacture the silicon and companies such as Foxconn assemble the servers. Its customers range from hyperscale cloud providers to AI labs, sovereign governments and enterprises building their own computing clusters.

The company now reports its Business in two buckets, Data Center and Edge Computing, a reflection of how thoroughly the AI data center has come to dominate its sales. Since November 2024 it has also been a member of the Dow Jones Industrial Average, where it replaced Intel (NASDAQ:INTC), which means its shares now sit in all three of the most widely followed US benchmarks and are bought and sold by a vast range of passive funds every trading day.

Recent results and guidance

The company's most recent report, for the second quarter of fiscal 2027 released on August 26, showed how large that business has become. Revenue reached $96.2 billion, up 106% from a year earlier and 18% from the prior quarter. Data Center revenue was $89.0 billion, up 117% year over year, while Edge Computing contributed $7.2 billion. Gross Margin was 75.0% on both a GAAP and non-GAAP basis, and GAAP diluted Earnings came to $2.46 per share.

For the third quarter, Nvidia guided to revenue of $108.0 billion, plus or minus 2%, with gross margin of about 74%. That outlook excludes data center compute sales to China. The company returned roughly $26 billion to shareholders through Buybacks and dividends during the quarter and still had $99 billion left on its repurchase authorization. Chief executive Jensen Huang said AI has reached an inflection point where its output is productive and profitable, and the company said its Vera Rubin platform had entered full production.

Valuation

Based on market data, Nvidia trades at about 30 times trailing Earnings Per Share of $7.91. That is close to Microsoft (NASDAQ:MSFT) at 29.3 and Meta Platforms (NASDAQ:META) at 28.0, and well below Broadcom at 46.3 and Advanced Micro Devices (NASDAQ:AMD) at 162.1. For a company whose revenue roughly doubled over the past year, that is not an extreme multiple, and it helps explain why bulls argue the stock is not in Bubble territory. Nvidia's gain of about 28% this year actually trails the much larger advance in the iShares Semiconductor ETF, suggesting the stock has been catching up rather than leading the group.

The flip side is scale. At $5.76 trillion, Nvidia's valuation already assumes that AI infrastructure spending stays strong for years. Small changes in expectations for hyperscaler budgets can move the stock by hundreds of billions of dollars.

Bull case

The bull argument rests on Demand that keeps outrunning forecasts. Revenue has more than doubled in a year, guidance points to another sequential increase of roughly 12%, and data points from suppliers such as Foxconn and TSMC suggest orders are still building. Margins near 75% show Nvidia retains strong pricing power, and its large buyback gives the stock steady support. Gene Munster of Deepwater Asset Management argued that earnings growth can carry the shares higher even if the valuation multiple keeps compressing.

Bear case

Skeptics focus on the durability of the spending cycle. David Bahnsen of the Bahnsen Group warned that every capital-intensive boom in history has eventually reached a stage where too much money was spent, and that the AI cycle has not yet passed through that phase. Competition is rising too, with pressure from new AMD systems and from custom chips designed by Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOGL). Meanwhile, China remains excluded from guidance, and a 10-year yield above 5% raises the discount rate applied to long-duration growth stocks. Stocks sitting at all-time highs also tend to attract profit-taking.

The road to a six trillion dollar valuation

The near-term focus is whether Nvidia becomes the first company to reach a $6 trillion market value, which at Monday's close would require a gain of roughly 4%. Beyond that, investors will watch third-quarter earnings season at the big cloud providers for updated Capital spending plans, further monthly sales from Asian suppliers such as Foxconn and TSMC, and the ramp of the Vera Rubin platform. Nvidia's own fiscal third-quarter report, its next scheduled update, will test whether the company can meet or beat its $108 billion revenue target. Treasury yields remain a wildcard for the entire growth complex.