Nvidia is First to $5 Trillion

Summary

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Bloomberg Intelligence Podcast – "Nvidia is First to $5 Trillion"

Date: October 29, 2025
Hosts: Scarlet Fu, Paul Sweeney
Featured Guests: Michael Shepherd (Bloomberg Senior Editor for Technology and Strategic Industries), Christopher Ciolino (Bloomberg Intelligence Senior U.S. Machinery Analyst), George Ferguson (Bloomberg Intelligence Senior Aerospace, Defense, and Airlines Analyst)

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Episode Overview

This episode covers the historic moment of Nvidia becoming the first company to reach a $5 trillion market capitalization, dissecting what the milestone says about the current market, especially the AI boom. The conversation gives insight into how Nvidia continues to lead the charge in AI, the broader implications for the tech industry, and includes analysis of earnings news from other sector-leading companies like Caterpillar and Boeing.

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Key Discussion Points and Insights

1. Nvidia Tops $5 Trillion – The AI Boom Unpacked

• Nvidia’s Milestone:

  • Nvidia’s stock has climbed over 40% this year, crossing $5 trillion market cap.
  • The company is central to the AI infrastructure powering tech giants and industry at large.

• AI Enthusiasm and Earnings:

  • Major hyperscalers (Microsoft, Meta, Amazon) are investing heavily in Nvidia’s technology.
  • Anticipation around their earnings reports as indicators for ongoing AI capital expenditure.
  • Jensen Huang (Nvidia CEO) expresses confidence: sees no AI bubble and projects $500B revenue in next five quarters.

  “You really can sense the enthusiasm for artificial intelligence and all the capex that has gone into it. We're really getting a sense of no sign of an end to the momentum.”
  — Michael Shepherd [02:08]

  “He [Jensen Huang] was emphatic in saying that he sees no sign of a bubble coming and that he expects another 500 billion in revenue over the next five quarters tied to all of that.”
  — Michael Shepherd [02:52]

• Transition in Computing:

  • Shift described as moving from "general-purpose computing to accelerated computing" driven by AI’s rapid advancements and practical reasoning capabilities.

  "We're going through a natural transition from an old computing model based on general purpose computing to accelerated computing. We also know AI has now become good enough because of reasoning capability."
  — Michael Shepherd relaying Jensen Huang [03:28]

• Beyond Chatbots – AI’s Expanding Role:

  • Nvidia’s vision for AI spans robotics, cybersecurity, business automation, and quantum computing.
  • Highlights strategic partnerships (Uber in transportation, CrowdStrike in cybersecurity, Palantir in automation).

• Skepticism and ROI Questions:

  • While market sentiment is hot, some investors remain skeptical about whether the revenue justifies massive AI spending.
  • Nvidia’s answer is that AI models are finally delivering measurable, monetizable intelligence.

  “When does revenue actually become something measurable and tied to artificial intelligence use? … AI has not only the use case, but it is actually starting to pay off.”
  — Michael Shepherd [05:45]

• Macro Impacts:

  • The size of tech stock moves (e.g., a 5% move in a $4 trillion company) being "real money" with ripples through GDP.
  • Tech’s interconnected supply chain (chips, services) could impact the broader economy if spending slows.

  “A 5% move in $4 trillion market cap stock. That's real money, right?”
  — Paul Sweeney [06:37]

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2. Caterpillar: Whispering the AI Story Into Industrial Markets

• Q3 Highlights:

  • Caterpillar’s stock surges 13% to an all-time high on strong quarterly results and accelerated orders.
  • Backlogs improve to a record $40 billion, showing strong visibility for future earnings.

  “Orders accelerated here in the quarter and we also saw backlog improve sequentially to a record $40 billion.”
  — Christopher Ciolino [10:08]

• AI-Driven Power Generation Boom:

  • AI is increasing demand for power generation equipment (large engines, turbines) for data centers.
  • Power generation now the fastest-growing part of CAT’s portfolio; expected to show a step change by 2027.

  “Power gen is probably…roughly 15% of the overall enterprise. But it continues to be the fastest growing part of the portfolio. They're bringing on a lot of capacity here…”
  — Christopher Ciolino [10:41]

• Competition and Global Footprint:

  • Key competitors: Cummins, Siemens Energy, and others.
  • CAT's energy and transportation business is strongest in North America but has a global reach (~100 countries).

• Tariff Challenges:

  • Tariffs were a $600M headwind in the quarter but margins remained strong.
  • Future strategy may involve pricing adjustments versus cost efficiencies.

  “Tariffs were actually a much bigger headwind than we anticipated in the quarter…somewhere around a $600 million headwind in 3Q. But margins were better than expected.”
  — Christopher Ciolino [12:42]

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3. Boeing: Progress in Turnaround Amid Headwinds

• Earnings Recap:

  • Commercial airplane division posts a $430M loss (excluding a $5B charge on the 777).
  • Boeing was cash flow positive at operating level, freed up $5B in inventory—promising signs of recovery.

  “Commercial airplane is getting closer to break even. And then in the cash flow statement, Boeing was cash flow positive at an operating level and free cash flow was about $1 billion.”
  — George Ferguson [16:53]

• 737 Production/Guidance:

  • FAA increased Boeing’s build rate to 42/month; expect 44–45/month near term.
  • Build rates expected to rise in 5-unit increments every six months, supporting turnaround efforts.

• CEO Kelly Orberg’s Impact:

  • Strong marks for improving morale and quality.
  • Defense business (especially St. Louis segment) lags but is improving, with new projects (F47 fighter) in development.

  “The biggest thing he [Orberg] needed to do was improve morale, improve quality. And it appears to be the case...So I think I'd give it all high.”
  — George Ferguson [20:10]

• Labor Issues and the 777 Program:

  • Machinists in St. Louis have been on strike for three-plus months.
  • The 777, once certified, will be the largest in production, with 500 in backlog and a strong “queen of the skies” reputation.

  “When it finally gets certified, it'll be the biggest airplane in production. So it kind of replaces 747 and A380 as the queen of the skies.”
  — George Ferguson [21:44]

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Notable Quotes & Memorable Moments

• On Nvidia and the AI Bubble:

  “I don't believe we're in the bubble.”
  — Jensen Huang via Michael Shepherd [03:27]

  "It's now generating tokens and now generating intelligence that's worth paying for."
  — Michael Shepherd [03:45]

• On Macro Tech Impact:

  “If anyone slows down their spending just a little bit or pulls back a little bit, that could have a ripple effect.”
  — Host [06:58]

• Caterpillar’s Tariff Resilience:

  “$600 million is no small change when it comes to tariff impact.”
  — Host [13:42]

• Boeing’s Momentum:

  “That's going to hyperdrive some of the cash generation of Boeing as they bring that inventory…down to probably a 60 or $50 billion level.”
  — George Ferguson [17:31]

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Timestamps for Important Segments

• Nvidia Hits $5 Trillion & AI Market Context:
  [01:36] – [07:13]
• Caterpillar's Q3, AI Power Generation Impact:
  [09:31] – [14:05]
• Boeing’s Turnaround Progress, CEO Orberg’s Leadership:
  [16:27] – [22:23]

---

Summary

This episode captures a pivotal moment for the tech market, with Nvidia at the crest of the AI investment wave, reshaping industry after industry. Expert guests bring granular analysis on corporate strategies, the intersection of AI with industrials, and the real-world impact on company performance. Insights into Caterpillar’s strategic growth and Boeing’s restructuring highlight how AI is permeating well beyond Silicon Valley and impacting legacy sectors.

For listeners wanting to understand how AI is transforming markets, as well as the interplay between tech investments and broader industry shifts, this episode is both timely and revealing.

Transcript

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[Co-Host/Interviewer]

Once again, you know, leading kind of the the winners out there in the world is Nvidia. Just extraordinary accomplishment today reaching $5 trillion in market cap. There's always, always news around this story. Michael shepherd joins us, Bloomberg Senior Editor for Technology and Strategic Industries. Michael, first of all just, I don't know, I guess it's just a number but boy, $5 trillion suggests that this market continues to see extraordinary value in this thing we call AI. What do you make of it?

[Michael Shepherd]

Well you can see not only in the share price which is up well above 40% this year, but you really can sense the enthusiasm for artificial intelligence and all the capex that has gone into it. We're going to be hearing later today from some of the hyperscalers, Microsoft Matter and Amazon reporting results and they are some of the biggest buyers of Nvidia's technology. So there is a real symbiote and we haven't seen any slowdown from them. We'll get some signaling after the results come out in their various conference calls about what their plans are for investment in this area going forward. But at least based on yesterday's GTC event here in Washington, the big industry confab sponsored by Nvidia, we're really getting a sense of no sign of an end to the momentum. And Jensen Huang was emphatic in saying that he sees the no sign of a bubble coming and that he expects another 500 billion in revenue over the next five quarters tied to all of that.

[Host]

I'm so glad you bring that up because we wanted to play some sound from that conversation Jensen Huang, the CEO of Nvidia, had with our Ed Ludlow. Bloomberg Tech co host Ed spoke with both Jensen Huang and Nokia's CEO Justin Hotard. Let's take a listen.

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I don't believe we're in the bubble.

[Michael Shepherd]

And the reason for that is we're going through a natural transition from an old computing model based on general purpose computing to accelerated computing. We also know that AI has now become good enough because of reasoning capability.

[Metronome Advertiser]

Research capabilities, its ability to think.

[Michael Shepherd]

It's now generating tokens and now generating intelligence that's worth paying for.

[Host]

Mike, what gets my attention is Jensen Huang coming out and saying definitively that he does not think there's an AI bubble. Do you think any of the CEOs of the three companies that are reporting today, the two that are reporting tomorrow are likely to go out on a.

[Michael Shepherd]

Limb and say that, you know, they have put so much into artificial intelligence themselves that they would be loath to issue any kind of a bubble warning that'll come much more from the outsiders. The interesting thing though, is when Nvidia talks about AI, it is not thinking just chat. GPT and the other chat bots that we are familiar with, they're talking about so many more things and uses. And one priority for Jensen Huang is really to accelerate the adoption of artificial intelligence across the economy in a variety of platforms. It ranges from robotics to cybersecurity to business automation. All sorts of things that they were talking about and really infused all the partnerships in deals that the company was announcing yesterday. Let's we could do a quick review. Scarlett It's Uber. It's lucid when it comes to transportation, it's crowdstrike when it comes to cybersecurity, it's Palantir when it comes to business automation. So the company really is not only trying to push this narrative, but it's trying to show it as well. And they even began to talk about some of the edge case uses for quantum computing, which is another area of keen interest for investors. And it's been an area that Nvidia has been edging toward in the past few years.

[Co-Host/Interviewer]

Michael, there are some investors out there that are obviously a little reticent about this whole story and the momentum behind it. Maybe they want to tap the brakes every once in a while. And I think their argument is basically, okay, I get the big spending by the hyperscalers, but what's the return on investment? Again, every once in a while we hear from those people. Where do you think that narrative is today?

[Michael Shepherd]

Well, it remains one of the big questions. When does revenue actually become something measurable and tied to artificial intelligence use? And Jensen Huang was trying to point yesterday to, look, AI has not only the use case, but it is actually starting to pay off. The models are starting to pay off. And this is why he sees the world not being in a bubble right now. But it is something that companies will have to try to demonstrate more visibly as they release results to justify all the expenditures that they have been making on data centers and on all the technology that goes into them to power these models that they intend to use.

[Host]

All right. Michael Shepard, really appreciate your joining us and giving us, you know, a wrap up of what we're seeing right now. Nvidia Once again, $5 trillion in market cap. 5 trillion, Paul. That is a lot of zero.

[Co-Host/Interviewer]

That is. And when you see the movements in these stocks, I'm just thinking some of these big tech stocks that have been announcing these big investments with each other and CHAP GPT and the amount of dollars, the absolute dollars of gains and losses in the stock market every day on some of these names is staggering because you are a 5% move in $4 trillion market cap stock. That's real money, right?

[Host]

And the spending that they're all doing on products or services and things like chips from each other, that is responsible for a big chunk of the GDP as well. So if anyone slows down their spending just a little bit or pulls back a little bit, that could have a ripple effect.

[Co-Host/Interviewer]

Stay with us. More from Bloomberg Intelligence coming up after this.

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[Co-Host/Interviewer]

One of the ear is out there is Caterpillar. Our good friends at cat stocks up 13% today, 52 week high. I think the market likes what they heard from Caterpillar. Let's bring in Chris Ciolino. He covers all those big industrial companies for Bloomberg Intelligence. Chris, talk to us about cat. What do we hear from them today?

[Christopher Ciolino]

It was a great quarter despite pretty elevated expectations coming into the print, a bigger tariff headwind. CAT really delivered very solid 3Q results. It was really driven by higher volumes across all three of their core businesses, with particular strength in energy and transportation. Again. But I think, you know, one of the more encouraging signs that we took away from the results this morning were that orders accelerated here in the quarter and we also saw backlog improve sequentially to a record $40 billion. So we think we see above average production and earnings visibility as we begin to think about next year, did the.

[Host]

Company say a lot about the power producing equipment, including turbines and generators that have investors excited about it being kind of a derivative play to the AI story?

[Christopher Ciolino]

Absolutely. So, you know, we continue to hear more and more about AI in data centers and CATS exposure there today. You know, power gen is probably, you know, roughly 30% of the energy and transportation business, roughly, you know, 15% of the overall enterprise. But it continues to be the fastest growing part of the portfolio. They're bringing on a lot of capacity here over these next three years. I think you'll really begin to see a step change as we move into 2027, particularly on the large engine side. So there is more of a focus and investment on the energy and transportation business and it has become the biggest part of their portfolio.

[Co-Host/Interviewer]

Wow. Are there other companies, or let me put it this way, who does catch compete with in that segment of the business?

[Christopher Ciolino]

Yeah, so there's a number of different competitors and it really breaks down relative by size on some of the gen sets. Cummins is a big one, Siemens Energy, and then you also have a few other European and Asian players. But, you know, this is certainly a market that's growing, you know, pretty exponentially here. Backlogs extend several years, so we think we have pretty good visibility at least through, you know, the next three years.

[Host]

Does this part of the business mean that Caterpillar will need to rely more on domestic market opportunities as opposed to global market opportunities?

[Christopher Ciolino]

So their footprint is the largest, the energy and transportation footprint is the largest in North America. But you know, I think the opportunity is global. They are a large global producer. They serve, you know, essentially almost all markets around the world. I think even particularly within energy and transportation, it's like something like 100 different countries. So while I think the immediate near term excitement is more focused here in North America, I do think longer term there's an opportunity international as well.

[Co-Host/Interviewer]

What's the company saying about the impact, if any, on tariffs on their business now and going forward?

[Christopher Ciolino]

Yeah, so tariffs were actually a much bigger headwind than we anticipated in the quarter. And even catching, I think it kind of shook out somewhere around a $600 million headwind in 3Q. But margins were better than expected. Really pretty remarkably resilient. Despite these price cost headwinds. 4Q will actually see a step up in the tariff costs. And then as we think about next year, Cat's really been kind of hesitant to pull the pricing lever on a lot of tariffs thus far. We think that's more of an opportunity for them. Here in the near term to gain some market share. So as we think about 2026, it'll be interesting to see do they continue to offset through more cost and productivity efficiencies or do they lean into pricing a little bit more? But tariffs will step up here in the near term and then 2026 it still remains to be seen, but I'd expect the demand backdrop to improve. So they certainly should have the opportunity to push pricing a little bit more aggressively next year.

[Co-Host/Interviewer]

Wow.

[Host]

$600 million is no small change when it comes to tariff impact.

[Co-Host/Interviewer]

And they these companies are finding margin improvement in other areas. I guess. It's really amazing.

[Host]

All right, thank you so much for speaking with us. Christopher Ciolino is Bloomberg Intelligence senior U.S. machinery analyst on Caterpillar's earnings and the stock right now up about 13% trading at $593 all time high. All time high.

[Co-Host/Interviewer]

Stay with us. More from Bloomberg Intelligence coming up after this.

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[Host]

One of the laggards in the Dow Industrials is Boeing. It's taking 26 points off of the off of the dow industrials is 230 point gain. And part of that is because of its latest earnings report. Let's bring in George Ferguson, who of course covers Boeing among other aerospace, defense and airlines companies for Bloomberg Intelligence. And George, I thought Boeing was in turnaround mode. Did the report, did the latest earnings back that idea up?

[George Ferguson]

Yeah, I think it did. So you know, what I saw from earnings today is that the commercial airplane business had about a $430 million loss. When you back out that about $5 billion charge for triple seven. I think that number was a bit better than consensus, a little bit better than what we were looking for. I think it's another sign that commercial airplane is getting closer to break even. And then in the cash flow statement, Boeing was cash flow positive at an operating level and free cash flow was about $1 billion in the operating level and free cash flow of a couple hundred million, I think, you know, that's above where consensus expected it. We saw $5 billion in inventory get unlocked during the quarter, meaning, you know, Boeing has been sitting on something like $90 billion inventory. I think it's like 987, I think was the exact number. And that came down to 82 billion because they've been buying from suppliers, putting things on shelves as they try to keep the supply base healthy while they've been going through some of their challenges here. And now they're starting to take that, you know, that inventory off the shelves, put it into airplanes. That's going to hyperdrive some of the cash generation of Boeing as they bring that inventory I think down to probably a 60 or $50 billion level. So I think those are both big positives. And the charge was largely non cash for an airplane that I think is still very Competitive just gets delayed a bit.

[Co-Host/Interviewer]

All right, how about deliveries of the 737? What's the guidance there, George? Because we know that's the big cash driver.

[George Ferguson]

Yes. So they're, you know, Boeing's kind of out of the game of giving guidance right now, but they've, they said, you know, the FAA has allowed them to go to 42amonth build rate, which, which would be above what they've done in, in the last quarter. I think we've got a model that about 44 or 45 per month for the next three months. That's because there's still some inventory airplanes they'll deliver as, as well as what they're building. Just heard Kelly Ortberg say on the call that he would anticipate sort of cranking up those build rates from 42 in increments of 5 every 6 months, no sooner. Obviously won't break unless they feel like they've got things stabilized. So I think we've got a path here to higher build rates over, you know, to the end of the decade. So, you know, I would expect that as they get a year down the road here will be probably break even in this business, you know, maybe a little bit longer, but I think we'll be break even in that business. And again, that's, I think all part of the Turnaround is getting 737 to perform. That's, that's going to be the financial driver.

[Host]

So Kelly Orberg has now been CEO for just over a year. He started in August of 2024. I can't believe it's been that long already.

[Co-Host/Interviewer]

I know, I know.

[Host]

And a lot has happened, clearly. And what I didn't realize is that Boeing is still facing some labor issues. St. Louis area machinists still strike. They've been striking for more than three months. What does this say about Kelly Orberg's leadership? And what kind of grade would you give him, George, for his leadership so far?

[George Ferguson]

Yeah, I mean, I'd give him a very high grade. Right. Again, I think that, you know, the biggest thing he, he needed to do was like, improve morale, improve quality. And it appears to, you know, to be the case. I think, you know, the proof is again, build rates, the FAA returning some, you know, giving Boeing the ability to go to 42 and returning some of their ability to certify some of the airplanes. So I think I'd give it all High in St. Louis right now. You know, St. Louis is where the defense business is centered out of right now. The defense business not performing great, but getting better. You know, I think there's, there's definitely more to come in the defense business as they start building the F47, which is the sixth generation fighter that they won. But that's still some preliminary work. My guess is that the sides are still a little bit apart on, you know, where they want to be for an agreement. And it's not as critical to get those folks back to the production lines as it was to get commercial 737 machinists back to production lines. So he's probably doing the right thing for the business here and, you know, making sure he can get an agreement he can live with, especially in defense where it's harder to bear, increase costs. And again, I would give him, I'd give him high grades. I think the company's in a turnaround right now and doing well.

[Co-Host/Interviewer]

George, about 30 seconds left. We don't talk about the triple seven much. How does that kind of figure into their portfolio and into the economics of Boeing?

[George Ferguson]

Yeah, when it finally gets certified, it'll be the biggest airplane in production. So it kind of replaces 747 and A380 as the queen of the skies. A350 1000 is the closest competitor. It can't be as densified. It can't have as many seats inside it. So I think you'll find a seat cost advantage. And the 777 has got core customers in those, you know, in those Middle east carriers, those Asian carriers that are the biggest sort of east west connectors. And I think it'll be fine. I think the delay won't, won't hurt its ability to be sold. And it's already got 500 in the backlog.

[Co-Host/Interviewer]

All right, I'll put my order in for the surveillance Triple seven for Tom Favorite. You know, he'll need one of those. George, thanks so much for joining us. George Ferguson, senior aerospace, defense and airlines analyst. If it flies, George covers it for Bloomberg Intelligence. That's kind of how I think about it.

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