After a huge run higher, Nvid(NASDAQ: NVDA) Stock has not even been keeping up with the general market in recent months. There are several reasons for that, but the big question for investors is whether it's now time to take advantage of the price of Nvidia's stationary shares.
The stock rose about 85% over the past year, and yet it is lower than four months ago, even as the S&P 500 It has a total earnings of about 4% in that time. But now it looks like over 300 billion more reasons to buy the stock. That's because several large technology companies plan to spend as much as $ 320 billion on data centers and artificial intelligence (AI) infrastructure over the next year.
The recent success of Nvidia is relatively easy to explain. Its advanced AI Graphics Processing Unit (GPU) chips They are in high demand. Using management guidance for its soon -reported fiscal quarter, revenue for the financial year ended at the end of January should show a growth of around 110%year -on -year. That is particularly impressive given that quarterly revenue is approaching $ 40 billion.
Nvidia also shared its plans with investors for ongoing innovation that should continue to drive demand. The sale of its H100 and H200 GPU chips have been boosting revenue growth, and now Nvidia has its Blackwell AI architecture in production.
CEO Jensen Huang has called the demand for Blackwell “crazy.” Investors will hear an update on its Blackwell sales when Nvidia reports earnings on February 26. The company may also discuss the Rubin Platform and the next generation due in 2026.
One recent front end for Nvidia stock was the remarkable announcement last month by Deepseek's private ownership Deepseek. Supposedly created that company and High -performing Language Model (LLM) for only $ 6 million. While many questioned the validity of that total capital cost, Deepseek product rose uncertainty about how many large cap technology companies would continue to spend on Nvidia AI products.
But those companies do not throw back on expenditure. Meta platforms. Hamazon. Alphabetand Microsoft Each of spending plans for AI data and infrastructure centers announced in 2025. As a group, the investments could total as much as $ 320 billion over a year.
Amazon expects to lead the way with $ 100 billion in capital expenditure. CEO Andy Jassy said, “The vast majority of that Capex expenditure is on AI (Amazon Web Services).” Alphabet is planning around $ 75 billion and Meta $ 65 billion. Microsoft will continue on its $ 80 billion plan in AI investments through June this year.
That company said he was already seeing earnings on his investment. Satya Nadella, Chairman and CEO of Microsoft, noted, “Already, our AI business has exceeded an annual revenue running rate of $ 13 billion, up 175% year -on -year.” Nvidia is the clear leader in AI infrastructure and is arguably the biggest benefactor of all that capital expenditure.
At the top of those tailwinds associated with AI data center expenditure, Nvidia has other increased segments. Its gaming business produces the second largest revenue. Gambling revenue has accelerated in each of the last three quarters, reaching its highest level since the Nvidia quarterly period ended on May 1, 2022.
Its professional imaging business provides a platform for creating industrial AI simulations and uses AI to drive efficiency to industrial developers. The revenue of that segment has increased in each of the last three quarters and has more than doubled in the last two years. Automotive revenue and robotics have also accelerated, with growth in all the last five quarterly periods.
Those other business segments use AI and also offer software solutions to AI NVIDIA hardware customers. That helps to provide a front wheel effect as their next generation architecture continues to improve and be used in its various platform solutions.
The upcoming quarterly report could bring share price volatility, but investors should look to hold Nvidia for its long -term potential. A disadvantage that could come from the quarterly report would give the opportunity to buy more NVIDIA stock.
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Randi Zuckerberg, former Market Development Director and spokesman for Facebook CEO and Meta Platforms, Mark Zuckerberg, is a member of the Board of Directors of the Motley Fool. John Mackey, former CEO of Whole Foods Market, a Sub -company from Amazon, is a member of the Board of Directors of the Motley Fool. Suzanne Frey, an alphabet executive, is a member of the Board of Directors of the Motley Fool. Howard Smith He has jobs in the alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has jobs in and recommends the alphabet, Amazon, Meta, Microsoft, and Nvidia platforms. The Motley Fool recommends the following options: Long January 2026 $ 395 Calls on Microsoft and Short January 2026 $ 405 Calls on Microsoft. The fool has motley and Disclosure Policy.
