Nvidia's Growth Engine Remains Intact but Priced In
Nvidia's stock price has been relatively flat in 2026, up only about 5% year-to-date compared to huge gains in 2023 and 2025. The company is reporting record revenue for FY2026 of $215.9 billion, a 65% increase from the previous year.
The data center business continues to boom, with $62.3 billion in Q4 sales. CEO highlights 'exponential' demand for AI compute, driven by custom chips like Blackwell. However, there are headwinds, including slower big-tech AI spending and competition from AMD and Google's custom chips.
Nvidia's valuation is also a concern, with a price-to-earnings ratio of around 34. The company's growth engine remains intact but may be priced in at current levels. The outlook depends on whether AI capital expenditures continue to accelerate in the second half of 2026.