Nvidia, Micron and Soft Jobs Data Drive Last Week’s Stock Action

The Friday rally was led again by artificial-intelligence demand. Nvidia reached an all-time high for the first time since May, while CrowdStrike, Palo Alto Networks and AMD also hit all-time highs. The Dow added 0.5% Friday, the S&P 500 gained 0.7%, and the Nasdaq climbed 1.2%, touching an all-time high earlier in the day before pulling back slightly.

According to CNBC, September nonfarm payrolls showed the U.S. economy added 29,000 jobs and unemployment rose to 4.2%, well below the Dow Jones consensus of 84,000 jobs and a 4.1% jobless rate. The figures were seen as soft enough to increase the chances that the Federal Reserve would hold rates steady at its late-October meeting rather than raise them. The market also digested Wednesday’s cooler-than-expected August personal consumption expenditures price index, the Fed’s preferred inflation gauge. With those data points, the market was pricing a 78% likelihood that the central bank would hold in October, up from 36% a week earlier, according to the CME FedWatch Tool.

Oil prices, which had been a drag on stocks as the war in Iran dragged on, pulled back Friday after a report that European nation-states were considering releasing strategic fuel reserves, CNBC reported.

Micron delivered another blowout quarter on Wednesday, but the bigger focus was management’s outlook on the supply-demand imbalance and the prospect of a powerful stock buyback. Revenue surged 379% from a year earlier to $54.23 billion, while adjusted earnings of $33.42 per share beat expectations. Micron guided for $61.5 billion in revenue for the first quarter of fiscal 2027 and $38.15 in adjusted EPS, both ahead of Wall Street estimates. Shares still ended the week down 0.7% as investors focused on plans to spend more on manufacturing capacity, with concern that added supply could eventually drive down memory prices and profits. Micron expects conditions in 2027 and 2028 to be tighter than in 2026, with roughly 75% of its expected 2027 output already spoken for. It has signed 26 strategic customer agreements, up from 16 last quarter. Jim called the outlook for the next couple of years "the best that I've ever heard," according to CNBC. Another catalyst could come in December, when CHIPS Act funding restrictions ease, allowing Micron to deploy its growing cash pile toward a significant buyback. The CNBC article said the price target was raised to $1,200 from $1,100 and a buy-equivalent 1 rating was reiterated.

Nvidia gave investors a much larger buyback. The chipmaker authorized an additional $150 billion in share repurchases, bringing its remaining authorization to $235 billion. Wall Street expects Nvidia to generate roughly $440 billion in free cash flow over the next six quarters, giving management room to repurchase shares while maintaining investments needed to keep its AI leadership. The move addresses a disconnect between Nvidia’s business and stock performance: shares are up roughly 24% this year but rank among the weaker performers in the iShares Semiconductor ETF, even as adjusted EPS has more than doubled in back-to-back quarters. The stock traded better last week and on Friday punched through its old May all-time intraday high, though it failed to score a record close. The $150 billion increase falls short of the $500 billion Jim had called for, but CNBC said it was a major step toward putting Nvidia’s cash generation to work for shareholders. Jim said during Friday’s Morning Meeting that Nvidia management had shown investors the best thing to own right now is Nvidia stock. Shares finished up 3.95% for the week.