Nvidia shares stuck in a range despite record Big Tech AI spending

Despite historic enthusiasm around artificial intelligence and record Big Tech investment, Nvidia shares have remained locked in a narrow range for months. Since the start of Q4, the stock is up less than 1%, even after hitting an all-time high in late October. The company is only slightly outperforming the S&P 500 in early 2026 – a sharp contrast to its nearly 40% gain in 2025 and the triple-digit rallies of the two prior years.

Meta, Alphabet, Microsoft, and Amazon plan to pour more than $600 billion into AI infrastructure in 2026, yet even that scale has not fueled further momentum in Nvidia’s stock. Analysts point to rising doubts over whether revenue from AI applications can justify such aggressive investment. Joanne Feeney of Advisors Capital Management said the expanding capex cycle “brings forward the saturation point,” when the market may pause orders to absorb the capacity already purchased.

The slowdown is reflected in Nvidia’s valuation. The stock trades at roughly 24 times forward earnings – in line with the Nasdaq 100 and only slightly above the S&P 500. While far below its five-year average of 38, investors do not see the current multiple as compelling because they expect demand to cool. Consensus forecasts call for Nvidia’s sales to grow 58% in 2026, then slow to 28% in 2027.

UBS strategists led by Ulrike Hoffmann-Burchardi warn that as Big Tech capex growth eases, valuations across infrastructure providers may come under pressure. They note that while reduced hyperscaler spending could appear positive for investors broadly, for equipment suppliers it introduces meaningful risk.

For now, markets remain cautious. Investors are weighing the possibility that the AI infrastructure boom may be entering a slower phase – and that Nvidia’s current consolidation reflects rising concern over the payoff from Big Tech’s multibillion-dollar investment cycle.

The next major catalyst is Nvidia’s earnings report on February 25 after the market close. Investors will scrutinize the company’s outlook and any signals on cloud-provider demand. Hyperscaler GPU orders have been the primary engine of Nvidia’s growth over the past two years.