Nvidia shares go cold even as Big Tech spending on AI balloons

"Big Tech keeps raising its spending plans for artificial intelligence infrastructure, yet shares of Nvidia Corp., one of the biggest beneficiaries of that flood of cash, have been largely stagnant for months. The stock is up less than 1% since the beginning of the fourth quarter and has been largely range bound despite hitting a record high in late October."

"Even ballooning capital spending from Meta Platforms Inc., Alphabet Inc., Microsoft Corp. and Amazon.com Inc. estimated to exceed $600 billion in 2026 hasn't been enough to meaningfully boost the stock amid increasing anxieties about returns on those investments. There is perhaps growing concern that the ultimate revenue from AI will simply not keep up with the capex spend that's been announced, said JoAnne Feeney at Advisors Capital Management, adding that more spending now raises the probability that the market will reach satiation faster."

"The cyclical nature of the chip industry is baked into Nvidia's valuation, which has compressed as revenue growth is expected to slow in the coming years. Sales are projected to expand 58% in the current calendar year and 28% in 2027, according to data compiled by Bloomberg. Nvidia shares trade around 24 times profit estimates, roughly in-line with the Nasdaq 100 index and a slight premium to the S&P 500."

Big Tech is increasing capital expenditures for AI infrastructure, with projected spending from major platforms expected to exceed $600 billion in 2026. Nvidia shares have been largely stagnant, up less than 1% since the start of the fourth quarter and range-bound despite a record high in late October, and are only marginally outperforming the S&P 500 in early 2026. There is concern that AI-driven revenue may not keep pace with announced capex, increasing the risk of market satiation and earlier pauses in spending. Nvidia's valuation has compressed as sales growth is forecast to slow, with sales projected to rise 58% this year and 28% in 2027 and a current price-to-earnings of about 24 times.

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