The Motley Fool·2026-02-14 09:12Core Insights - Hyperscalers are expected to significantly increase spending on AI infrastructure in 2026, with revised estimates suggesting a 70% increase to approximately $650 billion, surpassing initial Wall Street estimates of 19% growth [10][9]. Company Insights - Nvidia has been a key player in the AI sector, with its shares rising 1,180% since early 2023, and analysts believe the stock remains undervalued, with a median target price of $250 per share indicating a 33% upside from the current price of $187 [1][2]. - Nvidia holds over 80% market share in AI accelerators and is recognized for its full-stack strategy, which includes developing both hardware and software solutions for AI infrastructure [4][6]. - The company's networking revenue surged by 162% in the most recent quarter, highlighting its strong position in the market [5]. Industry Insights - Wall Street has consistently underestimated AI hyperscaler capital expenditures (capex), with actual growth rates far exceeding initial forecasts; for instance, capex increased by 54% in 2024 and 64% in 2025, compared to initial estimates of 19% and 22% respectively [8]. - Major companies like Alphabet, Amazon, Meta Platforms, and Microsoft have announced substantial increases in their capex for AI infrastructure in 2026, with Alphabet projecting $180 billion (up 98% from 2025), Amazon $200 billion (up 56%), Meta $125 billion (up 74%), and Microsoft over $140 billion (up 59%) [11].