In this articleNVDAJensen Huang, president and CEO of Nvidia, attends the 56th annual World Economic Forum meeting in Davos, Switzerland, Jan. 21, 2026.Denis Balibouse | ReutersIt's been a tough start to the year for technology investors. Shares of seven of the eight trillion-dollar tech companies have notched losses so far.The lone exception is Nvidia. The chipmaker's stock is up 2.7% in 2026 as of Monday's close, while the Nasdaq has dropped more than 2.5%. Microsoft, Amazon and Tesla have all seen double ...

Meta's $115 Billion AI Bet Puts NVIDIA at the Center of a Multi-Year Spending Cycle - 24/7 Wall St.[S&P 5006,861.40 -0.28%][Dow Jones49,416.60 -0.48%][Nasdaq 10024,796.80 -0.36%][Russell 20002,653.43 -0.18%][FTSE 10010,647.20 -0.59%][Nikkei 22556,995.50 -0.96%][Stock Market Live February 19, 2026: S&P 500 (SPY) Slips on Walmart Outlook][Investing]# Meta's $115 Billion AI Bet Puts NVIDIA at the Center of a Multi-Year Spending Cycle### Quick ReadNvidia (NVDA) secured a multi-year AI infrastructure deal with M ...

Economic Outlook - Fitch Ratings projects that U.S. federal deficits will remain elevated through the 2027 fiscal year, with little political will for fiscal consolidation ahead of the November 2026 midterm elections [2] - The Trump administration may use alternative authorities to impose new tariffs, which could increase inflationary pressures while addressing trade imbalances [3] Technology Sector - Meta Platforms announced a significant agreement to acquire and deploy "millions" of chips from Nvidia, including Blackwell GPUs and Grace CPUs, aiming to enhance AI capabilities for billions of users [4][5] - This partnership solidifies Nvidia's market leadership, although it raises concerns about the substantial capital expenditure required for AI advancements, contributing to volatility in tech indices [5] Energy Sector - Devon Energy reported a strong Q4 with $702 million in free cash flow, exceeding analyst expectations for production and earnings, with an average production of 851,000 barrels of oil equivalent (Boe) per day [6] - The company anticipates a spending outlook of $3.5 billion to $3.7 billion for 2026, despite forecasting a production cut of 10,000 Boe per day in Q1 due to severe winter weather [7] Investment Strategies - Carl Icahn has shifted his investment strategy, reducing exposure in telecommunications and specialty chemicals by cutting stakes in EchoStar and International Flavors & Fragrances, while increasing holdings in Centuri Holdings and Monro, Inc. [8][9] - Netflix Co-CEO Ted Sarandos indicated a cautious approach to media industry consolidation, preferring to wait for Paramount Global's next move before making any strategic decisions [9] Global Macro Trends - The Reserve Bank of New Zealand is facing pressure to consider a rate hike as inflation remains at 3.1%, slightly above the target band [10] - Wall Street is experiencing high volatility, influenced by AI-driven growth potential and risks from rapidly evolving technology and trade policies [11]

Group 1: Palantir Technologies - Palantir Technologies has seen a significant pullback in its stock performance, with shares trading at 128 times forward earnings, indicating an astronomical valuation [1] - The company is described as being priced for perfection, which may not be sustainable in the long term [11] Group 2: Nvidia - Nvidia's stock is trading at a forward earnings multiple of 24.5, which is considered reasonable given its growth prospects [3] - The upcoming launch of the Rubin platform in the second half of 2026 is expected to support inference at a cost up to 10 times lower than Nvidia's Blackwell GPUs and enable training of large models with 4 times fewer GPUs [4] - Nvidia's CEO believes that the demand for powerful AI chips will continue to grow, positioning the company as a major beneficiary of this trend [6] - Nvidia's current market cap is $4.4 trillion, with a gross margin of 70.05% [5][6] Group 3: Advanced Micro Devices (AMD) - AMD is identified as a credible challenger to Nvidia, trading at nearly 32 times forward earnings, which is still seen as a bargain compared to Palantir [7] - AMD's Instinct MI400 chips are expected to match Nvidia's Vera Rubin chips in performance while offering 1.5 times the memory capacity and scale-out bandwidth [8] - The market anticipates that AMD's stock will regain momentum once the MI400 chips are launched [10] Group 4: Market Dynamics - AI hyperscalers are diversifying their investments and are unlikely to rely solely on Nvidia, which could benefit AMD [10] - Both Nvidia and AMD are expected to benefit from continued demand for GPUs, and they do not need to be perfect to achieve market-beating returns [12]

Core Viewpoint - Many AI stocks are perceived as expensive, but there are several undervalued options with significant growth potential [1][2]. Group 1: Advanced Micro Devices (AMD) - AMD's forward price-to-earnings ratio is 39.7, and its trailing P/E ratio is 131.6, indicating a high valuation at first glance [3][4]. - The stock's PEG ratio is notably low at 0.5, suggesting it is one of the cheapest AI stocks available [3]. - AMD anticipates revenue from AI data centers to grow at a compound annual growth rate (CAGR) of over 80% in the next three to five years [5]. - The company is gaining market share in server CPUs and is making progress in the GPU market with its Instinct MI350 Series [6]. Group 2: Micron Technology - Micron's PEG ratio is just below 0.7, and shares trade at 12.3 times forward earnings, indicating it is not an expensive commodity [7]. - The company has secured contracts for its entire 2026 high-bandwidth memory (HBM) supply, reflecting strong demand and supply constraints [9]. - Micron expects the total addressable market for HBM to reach $100 billion by 2028, with a CAGR of approximately 40% [9]. Group 3: Nvidia - Nvidia's PEG ratio is 0.7, and it is expected to experience strong growth over the next five years, making its current valuation more justifiable [10]. - The company projects annual AI infrastructure spending to reach $3 trillion to $4 trillion by the end of the decade, driven by emerging technologies [12]. - Nvidia's Blackwell GPUs are currently the most powerful AI chips, with plans to launch even more advanced Rubin GPUs later this year [13].

Core Viewpoint - The market is overly focused on when Big Tech will monetize AI investments, while the real risk lies in the physical constraints of scaling AI infrastructure, particularly in power, cooling, and infrastructure needs [1][2]. Industry Insights - AI data center power demand is projected to surge significantly, with Wells Fargo estimating a 550% increase by 2026 and an astonishing 8,050% growth by 2030 [13][14]. - The International Energy Agency (IEA) projects global data center power demand to more than double from approximately 415 TWh in 2024 to around 945 TWh by 2030 [13]. - The Boston Consulting Group anticipates a growth in global data center power demand from 82 GW in 2025 to 127 GW by 2028, representing a 55% increase [17]. Company Focus: Bloom Energy - Bloom Energy is positioned to address the urgent power needs of AI data centers through onsite power generation using solid oxide fuel cells, reducing dependency on the grid [5][20]. - The company has seen strong revenue growth, reporting $519.05 million in Q3 2025, a 57.1% year-over-year increase, driven by demand for its fuel cell technology [33][36]. - Bloom Energy's product revenue grew by 64% year-over-year, with installation revenue spiking 105% year-over-year, indicating robust demand and favorable pricing [39][41]. Financial Performance - Bloom Energy's GAAP operating margin has improved, moving into positive territory, with adjusted operating profits growing by 470% year-over-year [41][43]. - The company reported positive operating cash flows and free cash flows in Q3 2025, indicating a strong financial position [47][51]. - Analysts expect adjusted EPS to grow by 95.9% year-over-year in 2026, reflecting strong operational efficiency and market demand [44]. Competitive Landscape - Power availability is a critical competitive advantage, as companies that can deploy GPUs faster will have a significant lead over those hindered by power constraints [9][10]. - Major tech companies like Microsoft and Meta are investing heavily in AI, with power availability being a key consideration for their data center expansions [7][12]. - Bloom Energy's ability to provide rapid onsite power solutions positions it favorably against traditional energy providers facing long interconnection timelines [24][26].

Core Insights - Advanced Micro Devices (AMD) is becoming a significant player in the data center GPU market, which is crucial for AI development, alongside its existing consumer electronics business [1][7] - AMD's stock experienced a 77% increase last year due to advancements in AI, but has since declined by 21% from its peak, raising questions about potential buying opportunities ahead of new product launches [2] Data Center GPU Developments - AMD's current leading data center GPU, the MI355X, is built on the Compute DNA (CDNA) 4 architecture and is being adopted by major data center operators like Oracle, which ordered over 131,000 units last year [3] - The upcoming MI450 Series, set to launch later this year, is expected to deliver up to 36 times more performance when integrated with specialized software and hardware compared to the previous generation [4] - AMD's MI450 Series is anticipated to outperform Nvidia's Blackwell GPUs, although Nvidia is also advancing with a new architecture called Rubin, expected to set new industry benchmarks [5] Competitive Landscape - The competition between AMD and Nvidia is intensifying as both companies strive to meet the increasing performance demands of AI developers [6] - AMD is projected to launch its most powerful data center chips in 2026, indicating a strong future demand from AI developers, even as it continues to catch up to Nvidia [7]

Core View - CoreWeave, Inc. (NASDAQ:CRWV) is being closely monitored by analysts as a significant player in the AI sector, with Cantor Fitzgerald maintaining an Overweight rating and a price target of $131.00, citing long-term growth potential from Blackwell GPU adoption and a favorable valuation compared to peers [1][4]. Revenue Estimates - Cantor Fitzgerald has adjusted its revenue estimates, shifting some revenue from Q4 2025 and Q1 2026 to Q2 2026 due to potential delays, while keeping overall projections for 2026 and 2027 relatively unchanged and slightly above consensus estimates [2]. Market Position and Demand - The company is well-positioned to benefit from the increasing demand for AI infrastructure and next-generation GPUs, with a significant portion of its fleet already utilizing Blackwell GPUs, expected to grow through 2026 and 2027 [3][4]. Valuation Metrics - CoreWeave shares are currently trading at approximately 3x C27, compared to Oracle at 6x and Microsoft at 9x, indicating a substantial discount in valuation. The EV/R/G ratio for CRWV shares stands at 0.05x C27, significantly lower than the infrastructure software average of 0.40x [4]. Future Revenue Potential - The company is projected to have a revenue run rate opportunity exceeding $30 billion for C28, with an anticipated revenue CAGR of over 80% from C25 to C28, supported by the full activation of its contracted 2.9 GW capacity [4].

Core Viewpoint - Nvidia's CEO Jensen Huang maintains a $500 billion AI demand outlook, indicating that this figure will not be revised quarterly despite ongoing developments that may enhance expectations [1][2]. Group 1: Demand Outlook - The $500 billion figure reflects Nvidia's visibility into AI-related demand through 2025 and 2026, with potential for upside due to new developments [2][3]. - Nvidia's CFO Colette Kress confirmed that the $500 billion visibility has increased since the company's GTC conference in October, indicating growing demand [4][5]. Group 2: Customer Base and Orders - Major cloud service providers, AI model developers, and neoclouds are already placing orders for Nvidia's next-generation platforms, suggesting strong pre-launch demand [5]. - Orders for the Vera Rubin chips are being planned as customers prepare for full-year volumes, further solidifying the demand outlook [4][5]. Group 3: Drivers of Demand - The rise of open-source AI models, such as DeepSeek, Qwen, and Meta's Llama, is driving demand, with these models generating approximately one in four tokens [6].

Group 1 - The introduction of generative AI by OpenAI's ChatGPT has led to a sustained boom, benefiting Nvidia as companies invest billions in its advanced computing hardware [1] - Nvidia's market cap of $4.63 trillion appears reasonable given its strong core business and growth prospects, although the future of generative AI remains uncertain [2] - Nvidia's stock is reasonably priced with a forward P/E of 25, lower than the Nasdaq-100 estimate of 26 and significantly cheaper than major tech competitors like Amazon and Apple [4] Group 2 - Nvidia's third-quarter revenue increased by 62% year-over-year to a record $57 billion, primarily driven by its data center segment and sales of GPUs for large language models [5] - The demand for Nvidia's new Blackwell GPUs is exceptionally high, contributing to a 65% year-over-year increase in net income to $31.9 billion [6] - Nvidia is executing a substantial stock buyback program, with $62.2 billion authorized, aimed at reducing outstanding shares and boosting earnings per share [7] Group 3 - While Nvidia's stock is not considered a bubble, there are concerns regarding the sustainability of AI spending in the U.S. economy, leading to skepticism about the long-term viability of its business [8]