Neil Patel, The Motley Fool
3 min read
Nvidia (NASDAQ: NVDA) has been on an incredible run in recent years. Shares have skyrocketed 978% since late July 2021 (as of July 22), a gain no investor can complain about.
But this leading artificial intelligence (AI) stock has slowed down. It’s up 12% in 2026, barely beating the S&P 500 index. Investors have come to expect more from Nvidia. Here’s what its muted performance so far this year might suggest.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
How durable is Nvidia’s success?
To be clear, a 12% price gain in less than seven months isn’t anything to be disappointed by. It’s just that because the stock rose 39% in 2025, 171% in 2024, and 239% in 2023, the investment community — which has been primed to have persistently high expectations — might be worried that slower returns are a sign of what’s to come. It’s impossible to know if this is the case, though.
Nvidia’s business continues to fire on all cylinders. Revenue surged 85% year over year in the 2026 second quarter (ended April 26) to $81.6 billion, establishing a fresh record. Demand is off the charts, as hyperscalers keep spending aggressively to build data centers for AI training and inference. The innovation pipeline is robust, and the company’s profitability is incredible.
According to management, the future could not be brighter. “AI infrastructure spending is on track to reach $3 trillion to $4 trillion annually by the end of this decade,” chief financial officer Colette Kress said on the latest earnings call. As long as the AI spending boom continues, Nvidia will benefit.
But that draws attention to what may be the biggest question the market has. And this relates to the durability of its success. The hyperscalers are developing their own custom chips in-house to lessen their dependence on Nvidia’s powerful graphics processing units (GPUs). Even though the demand is strong today, this introduces a long-term risk as Nvidia’s most important customers seek an exit strategy.
What’s more, AI-related capital expenditures could drastically come down if the ultimate returns don’t live up to expectations. This is a huge unknown.
Wall Street also expects sales gains to decelerate. Sell-side consensus estimates call for revenue to increase 219% between fiscal 2026 and fiscal 2029, a significantly slower pace than the 700% reported in the prior three years.
