Nvidia shares NVDA rose more than 1.6% on Wednesday as softer-than-expected US inflation boosted hopes that the Federal Reserve may hold off on another interest rate increase as soon as next month, benefiting most mega-cap and growth stocks.
The Commerce Department reported that the Personal Consumption Expenditures price index rose 3.4% annually in August, below the 3.7% increase economists polled by Reuters had forecast.
The softer inflation reading eased concerns that the Fed could resume tightening monetary policy at its October meeting.
Traders were pricing in about a 35% probability of an October rate hike, down from roughly 45% before the data, according to LSEG data.
Separate data showed that the US economy expanded at a solid pace in the second quarter, supported by strong consumer spending and business investment linked partly to the continued buildout of artificial intelligence infrastructure.
The broader market also moved higher, with the S&P 500 gaining about 0.6% and the Nasdaq Composite up roughly 0.9%.
Cathie Wood loads up on Nvidia
The company has also attracted fresh attention after Cathie Wood’s ARK Investment Management disclosed a significant purchase of Nvidia shares.
ARK bought 356,681 Nvidia shares across its ARKK, ARKQ, ARKW and ARKX exchange-traded funds, with a combined value of about $81.63 million.
ARK also purchased 76,263 Broadcom shares worth approximately $25.56 million.
The Nvidia purchase adds to the recent momentum around the chipmaker, although the transaction itself does not necessarily indicate a change in the broader investment strategy of the funds.
CoreWeave to expand computing portfolio with Nvidia’s Vera CPU
CoreWeave Inc. said Wednesday it will expand its computing portfolio with Nvidia’s Vera CPU, according to a company press release.
The announcement was made at Fully Connected, CoreWeave’s AI cloud conference.
Nvidia’s Vera CPU is designed specifically to handle AI agent workloads.
CoreWeave said its rack-scale system will feature 128 Vera CPUs with 11,264 cores in a single rack, alongside BlueField-4 data processing units and Spectrum-X Ethernet switching.
“General-purpose infrastructure bottlenecks agentic AI; Vera is the first CPU explicitly designed to accelerate it,” said Chen Goldberg, executive vice president of product and engineering at CoreWeave.
The company plans to deploy the Vera CPU on bare-metal infrastructure through its existing cloud platform.
$235 billion buyback underscores Nvidia cash generation
Nvidia shares have received another boost this week after the company announced a record $150 billion increase in its share repurchase authorization.
The move takes Nvidia’s remaining buyback capacity to $235 billion, which the company expects to deploy through fiscal 2028.
The decision reflects the enormous cash generation of Nvidia’s AI business as demand for its processors continues to generate billions of dollars in operating cash flow.
“The AI buildout won’t continue at its current pace forever, but Nvidia is signaling confidence that demand for its hardware and services has staying power,” said Jacob Bourne, an analyst at eMarketer.
Kate Leaman, chief market analyst at AvaTrade, said the size of the authorization was particularly notable.
“The headline number is striking. Nvidia is effectively telling the market it expects its AI cash generation to be durable, not a one-off boom. You don’t commit to buying back roughly $235 billion of stock through fiscal 2028 unless you believe the cash will keep coming.”
However, Leaman cautioned that a buyback authorization does not necessarily mean Nvidia will immediately repurchase the full amount.
Expert view
An authorisation is permission, not a commitment, and part of any tech buyback goes towards offsetting shares issued to employees rather than genuinely shrinking the share count. Buying back stock at a market value above five trillion dollars is also a very different proposition from buying it cheaply. Think of it as a company betting on itself – that bet may pay off if AI spending holds up, but if the big cloud companies slow their data-centre investment, the cash flows funding this programme could come under pressure
“For investors, the buyback could offer some support on dips, but it doesn’t remove the stock’s sensitivity to the AI spending cycle.”
Nvidia explores new ways to expand chip demand
Beyond the buyback, Nvidia is reportedly exploring ways to make it easier for smaller AI companies to finance purchases of its expensive processors.
The Financial Times reported that Nvidia has held discussions with insurance companies about structures that could shift some of the risks associated with semiconductor financing to insurers and other investors.
One proposal under discussion involves insurance against losses on loans to smaller cloud computing companies, often known as “neoclouds,” if they default and the Nvidia chips pledged as collateral cannot be resold for enough to cover lenders’ losses.
Such arrangements could potentially encourage lenders to provide more capital to Nvidia customers that lack the financial strength and balance sheets of major technology companies.
The discussions remain at an early stage and may not result in agreements.
Still, the talks highlight Nvidia’s efforts to broaden the financing ecosystem around its chips as it seeks to expand demand beyond the largest cloud providers.
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