Nvidia stock is stuck in a rut despite AI spending blitz

Group 1: Nvidia's Stock Performance - Nvidia's shares have remained in a narrow trading range for months, with a nearly 2% decline on a recent Friday, despite record levels of global capital expenditures on AI infrastructure [1] - Since August, Nvidia's stock has gained just under 2%, which is only slightly better than broader market indexes, while competitors TSMC and AMD have seen increases of approximately 52% and 12%, respectively [1] Group 2: AI Infrastructure Spending - Major tech firms, including Meta Platforms, Alphabet, Microsoft, and Amazon, are expected to spend over $600 billion on AI infrastructure in 2026, indicating a sustained increase in corporate investment in machine-learning compute and data centers [2] - Analysts suggest that there is a disconnect in how investors are pricing future AI spending into equities, even for companies directly involved in the AI boom [2] Group 3: Revenue Concerns - There are growing concerns that the revenue generated from AI may not keep pace with the announced capital expenditures, as noted by JoAnne Feeney from Advisors Capital Management [3] - Despite strong demand for Nvidia's chips and revenue projections that exceed most competitors, valuation multiples have compressed, with Nvidia trading at about 24 times projected profits, which is in line with the Nasdaq-100 and only slightly above the S&P 500 [4] Group 4: Market Expectations and Future Guidance - Investors are awaiting Nvidia's next quarterly report, scheduled for February 25, which is seen as a crucial catalyst that could influence whether the stock breaks out of its current range [5] - Analysts warn that after years of accelerated capital expenditures, growth in technology infrastructure spending may slow, potentially reducing orders for data-center chips [6] Group 5: Competitive Landscape - Concerns persist regarding the sustainability of AI infrastructure spending growth, which could negatively impact Nvidia's performance, as highlighted by Stifel analyst Ruben Roy [7] - Investors are also apprehensive that the significant investments in AI may yield slower returns than anticipated, especially with increasing competition from Google's TPU teams and startups developing alternative AI processors [8]