To The Moon

Lately, I’ve been seeing comments like thes$NVIDIA(NVDA)$ “Nvidia’s market cap is just too big—over $4 trillion. There’s no way the market has enough money to push it higher.” “Think about it: for the stock to rise another 25%, that would mean $1 trillion has to flow in. Anyone still telling people to buy is just being foolish.” This kind of thinking is a textbook case of sounding knowledgeable while completely missing the point. The mistake here lies in a fundamental misunderstanding of what market capitalization actually means. When people hear “Nvidia’s market cap is $4 trillion,” they picture $4 trillion in cash somehow “locked up” in the stock. From that view, to climb another 25% to $5 trillion, it would require $1 trillion in new money to flood into the market. That’s just plain wrong. Here’s the reality: Market Cap = Current Share Price × Total Shares Outstanding. The key is the current share price. And what sets that price? Not some giant cash pool, but the most recent trade. That last trade could be 100 shares—or even 10 shares. Think of it like a neighborhood with 100 identical houses. Last year, each one sold for $1 million, so the neighborhood’s “total value” was $100 million. This year, one owner sells their house for $1.2 million. Instantly, every unsold house is now “worth” $1.2 million, and the neighborhood’s total value is re-marked at $120 million. Did $20 million in fresh cash suddenly pour into the neighborhood? Of course not. The actual transaction was just $1.2 million. Stocks work the same way. So, let’s clear this up: Nvidia’s $4 trillion market cap isn’t a cash vault stuffed with $4 trillion. It’s just a snapshot—a valuation based on the last trade price, multiplied across all outstanding shares. For Nvidia’s market cap to move from $4 trillion to $5 trillion, you don’t need $1 trillion of new capital. What you need is for buyers, at the margin, to consistently outbid sellers. If that dynamic pushes the stock price up 25%, the market cap goes along for the ride. That shift might be fueled by tens of billions in trading volume—a big number, yes, but trivial compared to the total market cap. That’s the real lesson: prices are set by marginal trades, and market cap is just the amplified reflection of those trades. The real question isn’t whether there’s “enough money in the market.” It’s simply this: at today’s price, are there more buyers or more sellers? And just to be clear, I’m not making a call on Nvidia’s future. This isn’t investment advice. I’m just pointing out the logic that too often gets overlooked. @TigerPM @TigerObserver @Tiger_comments @Daily_Discussion @TigerStars