Nvidia President and CEO Jensen Huang attends the 56th World Economic Forum Annual Meeting in Davos, Switzerland, January 21, 2026.
Dennis Bariboos | Reuters
The year has gotten off to a tough start for technology investors. Seven of the $8 trillion tech companies have posted losses so far.
The only exception is Nvidia. As of Monday’s close, the company’s stock is up 2.7% in 2026, while the Nasdaq is down more than 2.5%. microsoft, Amazon and tesla Both were double-digit decreases.
Heading into NVIDIA’s quarterly earnings report on Wednesday, Wall Street has a pretty clear picture of where the company stands. That’s because the company’s largest customer released its earnings a few weeks ago, telling investors that its massive spending on artificial intelligence infrastructure will only increase.
“2026 hyperscale capex forecasts exceeded prior expectations,” Wedbush Securities analysts wrote in a Monday note previewing NVIDIA’s earnings. “AI investment growth is expected to slightly outpace overall capital spending trends, as servers and AI infrastructure account for the bulk of upfront spending.”
Wedbush analysts recommend NVIDIA stock as a buy, as do more than 90% of companies tracked by FactSet. They have a price target of $230 for the stock, 20% above Monday’s closing price.
Nvidia, the world’s most valuable publicly traded company, currently derives about 90% of its revenue from its data center business. The data center business houses the graphics processing units (GPUs) and AI systems used to train and run most large-scale language models. As the tech giant builds massive new data centers to keep up with surging demand, those facilities are packed with Nvidia’s latest and greatest products.
Alphabet, Microsoft, Meta and Amazon are expected to collectively spend nearly $700 billion this year to fuel AI expansion, according to the latest forecasts and analyst estimates. The four hyperscalers are expected to increase their capital expenditures by more than 60% from historic levels reached in 2025.
All this spending is undoubtedly good for Nvidia, but many skeptics worry that the tech industry is so overbuilt that any slowdown or downturn could have a huge impact on the dominant chipmaker.
“This story is both incredibly simple and incredibly complex,” Cantor Fitzgerald analysts said in a report last week. Analysts who rate the stock as Outperform say that despite “insatiable” demand for computing power and a “very positive” outlook for Nvidia’s results, investor concerns “remain, led by concerns that this year’s capital spending will peak at hyperscale.”
Analysts on average expect NVIDIA’s fourth-quarter fiscal revenue to rise 68% to $66 billion, according to LSEG. For the April quarter, sales are expected to rise 63% year-over-year to $72 billion.
Excitement is building for the release of Nvidia’s next-generation Vera Rubin rack-scale system, scheduled for later this year. CEO Jensen Huang said in October that 6 million Blackwell GPUs have been shipped in the past four quarters, and that NVIDIA expects to generate $500 billion in GPU sales between the Blackwell generation and upcoming Rubin chips.
Investors will be listening closely to comments regarding the rollout of the Vera Rubin system as we look to determine demand for the remainder of 2026 and beyond.
Another important topic for Huang and his management team to address is Groq.
Wednesday’s earnings announcement will be Nvidia’s first since it bought assets from the chip startup in late December for about $20 billion. The deal brings Groq founder and CEO Jonathan Ross, company president Sunny Madra and other senior executives to Nvidia.
Groq’s area of expertise is the inference side of markets, which refers to using AI to make decisions based on new information. Nvidia dominates the market in training, which involves teaching AI models to learn from patterns in large amounts of data. Analysts will be looking for clarity on the deal’s impact on Nvidia’s balance sheet and its strategic plans to use the technology to compete with makers of custom application-specific integrated circuits (ASICs).
“We’re looking for hints and details about what products to expect from Jonathan’s team and how this acquisition will strengthen NVDA’s accelerator business,” Wedbush analysts wrote. “We believe that concerns about increased competition from ASIC solutions are one of the biggest impediments to NVDA’s performance, and we believe that a strong Groq-related roadmap can meaningfully allay investor concerns.”
Spotlight: Nvidia has very positive risk-reward on earnings
