Key Highlights

● Nvidia fell 0.80% to $213.66 on Thursday, with Volume about 0.75 times normal.

● About $15.9 billion of shares traded, the sixth-highest dollar volume among US stocks.

● Alphabet's capex surge and negative free Cash Flow reignited the AI spending debate.

● Nvidia trades near 27 times trailing earnings, below Broadcom and AMD but above Micron.

What put Nvidia (NASDAQ:NVDA) near the top of Thursday's most-active list was less a story of its own than its place at the center of the AI spending debate, which flared up again after a busy night of big-tech earnings. The shares slipped 0.80% to close at $213.66 on about 74.59 million shares, which market data put at only about 0.75 times normal volume. Even on a relatively quiet day for the stock, its size meant that roughly $15.9 billion worth of shares changed hands, the sixth-highest dollar volume of any US stock. At the close, the chipmaker was valued at around $5.15 trillion, the largest Market Value on the list.

Big tech's spending signals

The backdrop was a mixed set of reports from Nvidia's biggest customers on Wednesday evening. According to market reports, Microsoft (NASDAQ:MSFT)'s fiscal first-quarter Revenue rose 19% to $92.28 billion, ahead of expectations, with Azure growing 48%. But Microsoft's Capital spending, including finance leases, came in at $45.2 billion, below the consensus estimate of $50.67 billion, because some third-party capacity deliveries slipped. Microsoft guided to more than $50 billion of spending in its fiscal second quarter.

Alphabet (NASDAQ:GOOGL)'s report was the bigger shock. Its third-quarter capital spending more than doubled from a year earlier to about $51.4 billion, and the company kept its 2026 range of $195 billion to $205 billion while saying spending would increase significantly in 2027. However, Earnings missed estimates and free cash flow was negative for a second straight quarter, according to media reports, and Alphabet's shares fell sharply on Thursday. Market reports also noted that Alphabet expects sales of its own TPU systems to keep scaling, with a meaningful revenue ramp in 2027, a reminder that Nvidia's largest customers are also building competing chips.

For Nvidia, that combination cut both ways. Spending plans that remain enormous support Demand for its accelerators, but a market that is starting to punish customers for negative free cash flow raises questions about how long that spending can keep growing at its current pace.

A risk-off tape for chips

The broader market was not much help. Market reports said the Nasdaq Composite fell about 1.4% while the S&P 500 lost roughly 0.3%, as Alphabet's slide weighed on technology and investors rotated into health care, financials and real estate. Chip stocks were weak in the AI-related sell-off, with Marvell Technology (NASDAQ:MRVL) falling on reports that it was in advanced talks to acquire Lumentum (NASDAQ:LITE). Macro data added to the pressure on richly valued growth stocks. September PCE Inflation rose to 3.6% year on year, the Federal Reserve held rates on Wednesday with two officials dissenting in favor of a hike, and the 10-year Treasury Yield traded near 4.99%, according to the same coverage. Against that backdrop, a decline of less than 1% left Nvidia among the steadier large chip names on the day.

The Business and its latest results

Nvidia designs the graphics processors and accelerated computing systems that power most large-scale AI Training and inference, along with networking hardware and software. Its Data Center unit now accounts for the vast majority of revenue. The stock is a member of the S&P 500, Nasdaq-100, Dow Jones Industrial Average and Russell 1000 indexes.

In its most recent report on August 26, Nvidia said revenue for the second quarter of fiscal 2027 rose 106% from a year earlier to $96.2 billion, ahead of consensus of about $92 billion, according to market reports. Data center revenue reached $89.0 billion, up 117%. Adjusted earnings were $2.22 a share against expectations of about $2.10, and gross Margin was 75.0%.

The company guided third-quarter revenue to $108 billion, plus or minus 2%, above consensus of about $104 billion, and said that outlook assumed no data center compute revenue from China. One report said Nvidia expects gross margin to dip to 71% to 72% in its fiscal fourth quarter because of memory costs, and that it returned $26 billion to shareholders in the quarter, with about $99 billion of buyback authorization remaining.

How the valuation compares

At Thursday's close, Nvidia traded at about 27 times trailing earnings of $7.91 a share, based on market data. That is well below Broadcom (NASDAQ:AVGO) at about 44 times and Advanced Micro Devices (NASDAQ:AMD) at about 145 times, though above memory maker Micron Technology (NASDAQ:MU) at roughly 12.6 times. A trailing multiple understates how the market is pricing Nvidia's growth, since the company's guidance implies sharply higher earnings in the coming quarters. Another report said management pointed to revenue growth of roughly 70% for fiscal 2028, well above the roughly 44% analysts had modeled at the time. That outlook is a central reason the stock trades at a discount to several slower-growing chip peers on trailing numbers.

The stock remains below its October 6 record close of $243.37, and market reports cited an average analyst target of about $329, based on market data.

The bull and bear cases

The bull case rests on the spending numbers. Alphabet is guiding to a significant increase in 2027, Microsoft expects its quarterly spending to rise above $50 billion, and Nvidia's own guidance pointed to another quarter of strong growth even without China. Strong economic data supports the theme as well: market reports said third-quarter GDP grew at a 3.4% annualized rate, with business Investment up 12.7% on the AI build-out.

The bear case centers on how that spending is being paid for. Alphabet has posted two consecutive quarters of negative free cash flow and has turned to Debt and share sales to fund its build-out, while Amazon (NASDAQ:AMZN) reported a trailing free cash outflow after Thursday's close. Custom chips such as Alphabet's TPUs are a growing alternative to Nvidia hardware, the company's guided margin dip shows rising memory costs, and higher interest rates make it harder to justify paying up for long-duration growth.

What to watch next

Amazon's results after Thursday's close, including a reaffirmed capital spending plan of about $220 billion for 2026 and AWS growth of 39%, will feed directly into how investors judge demand for Nvidia's chips. AMD reports on November 3, according to market reports, offering another read on the AI accelerator market. Nvidia's own fiscal third-quarter report is expected on November 17, when investors will look at whether revenue lands near the $108 billion guidance, how quickly gross margins recover from the memory-cost squeeze and what management says about demand for 2027.

Any update on export rules for China would also matter, given that current guidance excludes that market. In the nearer term, the stock's relatively low relative volume on Thursday suggests investors were waiting for more information rather than repositioning aggressively, so Friday's reaction to Amazon's report may be a better test of sentiment.