Nvidia stock (NASDAQ: NVDA) is climbing as several tailwinds come together to strengthen confidence in the company’s leadership in AI chips.
Strong earnings and guidance from Micron helped calm fears that AI-related spending is slowing.
Moreover, Nvidia’s aggressive share buyback and cash-rich balance sheet signal management’s confidence that demand will remain strong.
Analysts also highlight year-end technical support and the broader durability of AI infrastructure spending, casting Nvidia as one of the few mega-cap growth names still showing momentum as 2025 comes to a close.
3 reasons Nvidia stock is rising today
1. Memory suppliers confirm AI capex remains robust
Micron’s strong quarterly results provided the most immediate market catalyst for Nvidia’s rally.
On Wednesday, Micron reported fiscal Q1 GAAP earnings of approximately $4.60 per share on revenue of $13.64 billion, far exceeding Wall Street expectations.
For fiscal Q2, the company guided to revenue of about $18.7 billion (± $400 million) and gross margins of roughly 67% (± 1%).
Management signaled that the high-bandwidth memory (HBM) supply crunch remains severe, with the company selling out expanded HBM capacity throughout 2026 at meaningfully higher prices.
Gross margins are expected to reach 67 to 69% in the coming quarter, far above the Street consensus of 55.7%, a clear signal that AI capex remains hot, and supply constraints persist.
2. Nvidia’s $60 billion buyback
Nvidia’s capital allocation strategy provides a second pillar of support.
In August, the company’s board authorised a record $60 billion share repurchase program with no expiration date.
During the first half of fiscal 2026, Nvidia had already returned $24.3 billion to shareholders through buybacks and dividends, with substantial firepower remaining under authorization.
This capital discipline, paired with over $23 billion in quarterly free cash flow, demonstrates confidence in both current valuations and future cash generation.
3. Year-end technical flows and momentum
Year-end trading patterns favor mega-cap tech. Historically, December sees strong inflows into large-cap growth names and potential short-covering ahead of portfolio rebalancing.
With Nvidia stock down roughly 13% from November highs, technical traders see renewed value and position for rallies toward $220–$230 before quarter-close.
Sentiment shifted sharply once Micron proved AI spending remains intact, lifting the entire chip complex off earlier lows.
What analysts say
Wall Street consensus remains overwhelmingly bullish despite Nvidia’s towering valuation.
While some analysts like Deutsche Bank’s Ross Seymore call the stock “fairly valued,” most major houses maintain Buy ratings and price targets well above current levels.
The street’s narrative centers on Nvidia’s scale, competitive moat, and the inevitability of AI capex cycles extending through the decade.
The consensus view remains that Nvidia is the essential pick-and-shovel play in the AI gold rush, with multiple expansion potential if gross margins hold steady and backlog visibility extends through 2026.
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