Nvidia Shares Linger in 2% Range Since August Despite $600B AI Capex
Shares of Nvidia have traded in a narrow 2% range since August, barely outpacing broader indexes while peers TSMC and AMD climbed roughly 52% and 12%, respectively. After record highs in late 2025, Nvidia’s valuation compressed to about 24 times projected profits even as Big Tech plans over $600 billion of AI infrastructure spending in 2026.
1. Performance Stagnation
After peaking at record highs in late 2025, Nvidia’s shares have drifted within a roughly 2% band for six months, falling nearly 2% on the most recent Friday. Since August, the stock has gained just under 2%, underperforming sector peers by wide margins.
2. AI Infrastructure Spending Growth
Corporate investment in AI infrastructure is set to top $600 billion in 2026, driven by Big Tech firms ramping machine-learning compute and data-center build-outs. Despite this surge, investor sentiment has recalibrated expectations for how much of that capex translates into future revenue growth for chip suppliers.
3. Valuation Compression
Nvidia now trades at around 24 times projected profits, roughly in line with the Nasdaq-100 and only modestly above the S&P 500. That represents a discount by historic standards for a high-growth AI leader, as multiples have contracted from prior premium levels.
4. Earnings as Catalyst
Market participants view Nvidia’s quarterly report, due after the close on Feb. 25, as the pivotal event that could break the share-price stalemate. Analysts expect fresh guidance on revenue and margins to determine whether the stock finally aligns with its AI growth narrative.