It's hard to find a bargain in today's ascending market. I think I have a couple. I believe Nvidia (NVDA 2.43%) and Upbound (UPBD +0.43%) are surprisingly cheap stocks in today's investing environment.
They are two very different companies. You know one. You probably don't know the other. Let's take a closer look at these two investments that seem affordable, each in its own unique way.
Image source: Getty Images.
1. Nvidia My first name needs no introduction. The world's largest company by market cap is the lead horse in the artificial intelligence (AI) revolution. Its chips are the backbone of AI data centers. They specialize in AI inference and reasoning, large language model training, and high-performance computing.
Business is booming, as you can probably imagine. Revenue has more than doubled in two of the last three years, rising by a still-impressive 66% in the outlier year. The 85% top-line jump it cleared in its latest quarter is its strongest showing in more than a year. You should expect to pay a market premium for that kind of octane, but that's not the case here.
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Nvidia stock is cheaper than you probably think. Revenue growth should slow from here, and its chunky adjusted net margin north of 40% doesn't seem sustainable. The current valuation might still surprise you.
Analysts see revenue accelerating in the current quarter, then slowing in the second half of the fiscal year ending in late January. They see the top line ultimately rising 82% this year, cut in half to 41% next year. Wall Street pros see a similar trajectory on the bottom line, with adjusted earnings climbing 88% and 42% through these next two fiscal years, respectively.
Nvidia is now trading at 23 times this fiscal year's adjusted earnings and at just 16 times next year's multiple. The market for high-end AI chips will intensify, but nearly every potential rival is growing substantially more slowly and trading at loftier P/E ratios. With Nvidia trading near its lowest year-ahead earnings multiple in years -- and analysts continuing to underestimate its financial performance -- one of the cheapest stocks right now could be the one with the largest market cap.
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2. Upbound Upbound isn't a household name for most investors and even its customers. This is the parent company of Rent-A-Center, a chain of more than 1,700 retail locations that offers lease-to-own options for furniture, appliances, and consumer electronics. Upbound also has Acima, an enterprise software platform that enables other retailers to drive sales through its lease-to-own solution. Finally, there is Brigit, a recently acquired personal finance app that has become its faster-growing business.
This may seem like an odd combination of high tech on top of an old-tech retailer, but it works. Its flagship Rent-A-Center business is a cash cow. Acima amplifies its reach, and Brigit helps it drive engagement and expand its market.
I may have buried the lede by waiting until the third paragraph to point out its current 7.4% yield. A high payout for a consumer-facing company can be a red flag. There are some clear risks here, but -- for now -- the distributions are more than viable. Revenue is moving higher for the third year in a row. Upbound expects to earn between $4.00 and $4.35 a share this year on an adjusted basis. It's trading for a little more than 5 times this year's adjusted earnings.
Its payout ratio is just 37% at the midpoint of its adjusted earnings guidance. The dividend rate seems safe in the near term, and it has actually increased those quarterly distributions five times in the last seven years.
It wouldn't be fair to end the Upbound discussion there. Let's talk about things that can go wrong. One immediate risk is the economy. A softening economy would hit lower-income families the hardest, and that's the target audience here. Another potential pothole is its substantial debt. This is a leveraged company with an enterprise value more than double its modest market cap.
The last hiccup could be regulatory. Some people consider rent-to-own merchants predatory, but what is the alternative for consumers who are short on cash and have low credit scores when it comes to securing essential household hard goods? If there were an easier way to bake the historically tangled default risk into a lower-cost ownership model, wouldn't it exist already? Upbound won't pass every investor sniff test, but the stock is textbook cheap at the moment.
Jim Cramer’s line about NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) being the most proprietary chip company in the history of the world captures why the stock keeps drawing long-term capital. The case for owning it on a decade-long horizon strengthens with every quarterly report.
The Core Reason: CUDA Is the Moat Every AI developer builds on CUDA. Each hyperscaler trains on it. Every frontier model, from OpenAI to Anthropic to Meta’s multi-year Blackwell and Rubin deployment, runs on it. That software moat is why NVIDIA’s Q1 FY27 non-GAAP gross margin printed at 75%, expanded from 60.8% a year earlier. Numbers like that come from proprietary ecosystems, not commodity chip businesses.
The Receipts Data Center revenue hit $75.246 billion, up 92% YoY. Data Center networking alone did $14.8 billion, up 199%. Total revenue was $81.615 billion, growing 85.2%. Free cash flow in a single quarter came in at $48.554 billion.
The board authorized an additional $80 billion share buyback and lifted the quarterly dividend from $0.01 to $0.25 per share. Return on equity is 101.49%. Return on invested capital is 92.21%. Debt-to-equity sits at 0.073, with interest coverage of 503.42. A fortress balance sheet stapled to a growth engine.
The Valuation Nobody Wants to Hear Here is the part worth focusing on. NVIDIA trades at a forward P/E of 24. Advanced Micro Devices (NASDAQ:AMD) trades at a trailing P/E of 210 with a gross margin of 55% and Q1 2026 data center revenue of $5.775 billion. AMD’s ROE is 7.19%, and its free cash flow yield is 0.74%, against NVIDIA’s 1.89%.
Broadcom (NASDAQ:AVGO) is a real business. Q2 FY26 AI semiconductor revenue was $10.8 billion, up 143% YoY, and CEO Hock Tan is targeting $100 billion in AI sales by 2027. NVIDIA already does $75.25 billion in data center alone in a single quarter. The platform is the differentiator.
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The Real Risk China is the real one. There were no H20 compute products shipped to China in Q1 FY27, and the Q2 FY27 guidance excludes any Data Center compute revenue from China. Custom silicon from Amazon Trainium and Broadcom is another live threat.
But NVIDIA guided $91 billion for Q2 FY27 anyway, with a 75% non-GAAP gross margin. The moat absorbed the China hit and kept accelerating. That is the tell.
Why the Thesis Holds Jensen Huang put it plainly: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.” Analyst consensus target sits at $301.62 against a current price of $210.96, with 48 buy ratings, 10 strong buys, 2 holds and 1 sell. Over five years the stock is up 955.75%.
The bull case rests on a company generating $48.55 billion of quarterly free cash flow, a 101.5% ROE, and a proprietary software layer nobody has replicated — a combination that belongs on long-term watchlists for as long as the AI cycle runs. It is running.
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Max Kettner, HSBC’s chief multi-asset strategist, argued on CNBC’s Closing Bell Overtime on July 7, 2026, that mega-cap tech business models have “fundamentally changed in terms of taking on debt and being cash flow negative,” but the real story is that Wall Street walks into Q2 earnings expecting the worst on capex, which sets up a beat with real fuel behind it.
The five stocks that matter are Alphabet (NASDAQ:GOOG | GOOG Price Prediction), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), and NVIDIA (NASDAQ:NVDA). Microsoft reports first on July 29, 2026, roughly two weeks away, and will set the tone.
The Low-Expectations Setup “We go into the Q2 reporting season with basically saying, oh my gosh, are they really going to be upgrading capex even more?” If hyperscalers confirm they can keep spending without breaking, that would “take the wind out of the sails of some of the AI bears.”
Look at Q1 results against sell-side estimates. Alphabet reported EPS of $5.11 versus a $2.63 consensus, a 94.10% beat, with Google Cloud revenue up 63% year over year and backlog nearly doubling quarter over quarter to over $460 billion. Meta printed $10.44 versus $6.66, a 56.79% beat, though most surprise came from $8.03 billion tax benefit tied to Treasury guidance on R&D costs. Amazon delivered $2.78 versus $1.73, a 60.69% beat, with AWS growing 28%, the fastest in 15 quarters. Microsoft’s AI business run rate hit $37 billion, up 123% year over year. NVIDIA reported data center revenue of $75.25 billion, up 92%, guided to $91 billion in Q2, and disclosed total supply commitments of $119 billion in its quarterly release. Five reports, five beats, most substantial.
Consensus revenue beats have narrowed to 1.24%-3.60% for Microsoft, while EPS beats remain in mid-single digits, meaning the Street is catching up on the top line but still lowballing profitability. Our team’s coverage of the names driving AI infrastructure spending digs into how that plays out across the supply chain.
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Why the Debt Fear Is Overblown The concern is capex financing. Alphabet guided $175 billion to $185 billion for 2026. Amazon set the bar around $200 billion. Meta lifted its range to $125 billion to $145 billion. Free cash flow is compressing at Alphabet, down 46.63% year over year in Q1, and Amazon’s TTM FCF has collapsed as capex nearly doubled.
Tech issuance is only about 10% of total supply so far this year of total supply, meaning the hyperscalers can fund what they need without saturating credit markets. Prediction markets echo the confidence. Polymarket assigns a 94.7% probability that Amazon’s 2026 capex exceeds $170 billion and an 87.5% probability that it exceeds $200 billion. The market is not pricing a funding crunch.
The Broadening Trap and What to Watch Tech and AI within the S&P are up more than 40% since early March, while the other roughly 50% of the index has only clawed back its losses over the same window. Alphabet is up 18.84% from March 2 through July 7. Amazon is up 18.04% over the same window. NVIDIA gained 8.05%. Meta actually slipped 5.65%, and Microsoft fell 2.22%, both weighing on the group’s average while the broader complex ran.
Kettner expects broad-based earnings delivery in coming weeks, then a fading catalyst. Watch three things in Q2 earnings reports. Whether capex guidance ticks higher again, particularly at Alphabet after its $35.67 billion Q1 spend. Whether AWS maintains its 28% growth rate or accelerates further. And whether NVIDIA’s Q2 guide of $91 billion proves conservative when management reports in late August. Kettner thinks it will. Nobody expects the upgrade cycle to continue. If it does, the bears lose their footing.
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Investors turned more cautious ahead of the opening bell as equity futures weakened. NVIDIA is also trading near an important technical area. That has left short-term traders divided between buying recent weakness and taking profits after the stock’s strong rally.
Ives Calls NVIDIA Key To AI DemandMeanwhile, tech strategist Dan Ives told CNBC on Monday that investors have rotated toward memory stocks as the “shiny new toy,” leaving NVIDIA and some hyperscalers under pressure despite their central role in AI.
He said NVIDIA remains the company powering the AI revolution, led by CEO Jensen Huang.
Ives said memory-chip demand remains strong, but questioned where the memory trade would be without NVIDIA and the hyperscalers driving AI infrastructure spending.
He said the upcoming second-quarter tech earnings season will be crucial for showing AI monetization, adding that demand still sharply exceeds supply.
Technical AnalysisNVIDIA traded at $208.25 in premarket action. The stock remained 2.9% above its 20-day simple moving average of $201.95 but slipped 0.6% below its 50-day simple moving average of $209.20. That suggests near-term momentum remains mixed.
The longer-term trend is still constructive. NVIDIA is trading 5.1% above its 100-day simple moving average of $197.71 and 8.4% above its 200-day simple moving average of $191.67.
The 20-day moving average remains below the 50-day moving average, a bearish crossover that can signal choppy trading in the short term. However, the 50-day moving average remains above the 200-day moving average, indicating the broader uptrend is still intact.
Momentum indicators are more encouraging. The moving average convergence divergence (MACD) remains above its signal line, while the histogram is positive. That suggests downside momentum is easing.
Key technical levels to watch include resistance near $214 and support around $199.50. Holding above the $200 area could help preserve the longer-term uptrend. A break below that level may lead to additional selling pressure.
NVIDIA reached a 52-week high of $236.54 in May. The stock later formed a swing low in June before slipping below a support level in July, making the current trading range especially important.
Earnings And Analyst OutlookThe next major catalyst is NVIDIA’s estimated earnings release on Aug. 26, 2026.
Wall Street expects earnings of $2.07 per share, up from $1.04 a year earlier. Revenue is projected to reach $91.70 billion, compared with $46.74 billion in the prior-year period. The stock trades at about 32.3 times earnings.
Analysts maintain a consensus Buy rating with an average price forecast of $323.83. Recent research includes:
China Renaissance initiated coverage with a Buy rating and a $319 price forecast on June 5. Needham maintained its Buy rating and $270 price forecast on June 2. DA Davidson maintained its Buy rating and $300 price forecast on June 1. Benzinga Edge RankingsAccording to Benzinga Edge, NVIDIA scores strongly on momentum, quality and growth, while its value score remains weak because of its premium valuation.
The momentum score is 74.81, quality is 98.13 and growth is 98.62. The value score stands at 6.92.
ETF ExposureNVIDIA is among the largest holdings in several exchange-traded funds, including:
Because of NVIDIA’s large weightings, significant ETF inflows or outflows can influence demand for the stock.
Price ActionNVDA Stock Price Activity: Nvidia shares were down 1.22% at $208.38 during premarket trading on Monday, according to Benzinga Pro data.
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Microsoft (MSFT +0.15%), Alphabet (GOOG 0.29%)(GOOGL 0.50%), Amazon (AMZN 0.73%), and Meta Platforms (META +6.16%) are pouring hundreds of billions of dollars into data centers, chips, and other infrastructure needed to support rising artificial intelligence (AI) adoption among consumers and enterprises. Nvidia (NVDA +3.90%) is raking in profits on its graphics processing unit (GPU) AI chips. Meanwhile, Tesla (TSLA +0.22%) and Apple (AAPL 0.37%) have taken different approaches to AI.
But no matter the business model, every company speaks the language of free cash flow (FCF), the cash profits remaining after funding operations and capital expenditures (capex). You can divide a company's FCF by the stock's market cap to calculate its FCF yield (the higher the percentage, the better).
From there, investors will see just how AI spending is impacting each of these "Magnificent Seven" stocks and identify which stocks you may want to buy and which to avoid. Here is how they currently rank.
Image source: Getty Images.
1. Meta Platforms Free-cash-flow yield: 2.8% Social media giant Meta Platforms is vying for the top spot despite investing aggressively in AI data centers. Part of the reason for that is the stock's recent slide on concerns over Mark Zuckerberg's ambitious AI spending plans. Meta's core advertising business continues to flourish and help fund all this spending. That said, it may not be enough to keep up with the company's planned 2026 capex of $125 billion to $145 billion. If not, Meta's FCF yield could easily drop.
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2. Apple Free-cash-flow yield: 2.8% Critics initially saw Apple as a loser in the AI race. It whiffed on Apple Intelligence and then decided against building out its own AI infrastructure. Now, Apple is sitting pretty with over $129 billion in trailing-12-month FCF. Its new AI-capable Siri will use Alphabet's Gemini models, keeping Apple's cash flow primarily intact. It's fair to wonder about Apple's long-term growth prospects, given how little it has invested in its own AI to date. For now, it might be the best value in the Magnificent Seven.
3. Microsoft Free-cash-flow yield: 2.5% Microsoft's ongoing slide has helped lift its FCF yield despite its massive AI expenditures. The company looked brilliant at first for partnering with OpenAI, but that relationship has soured somewhat, and its Copilot AI app hasn't taken off as hoped. Fortunately, Microsoft's software products have helped fund massive data center investments, and AI adoption is fueling booming demand for Azure cloud services. In the end, Microsoft may not need the best AI products to profit from its sticky enterprise relationships.
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4. Nvidia Free-cash-flow yield: 2.3% As the leader in data center GPU chips, Nvidia has arguably been the biggest AI winner to date. Nvidia's cash flow has exploded over the past several years. The only reason the stock's FCF yield isn't higher is that Nvidia's share price keeps going up, too. Nvidia isn't the cheapest, but it probably has the best near-term growth prospects on this list. Analysts expect the company's revenue to soar even higher as Vera Rubin, Nvidia's next-generation AI chip architecture, begins shipping later this year.
5. Alphabet Free-cash-flow yield: 1.5% Google's parent company has been one of the most aggressive spenders in the AI race. Although its enormous advertising business helps foot the bill, the aggressive spending has weighed on the stock's FCF yield. Alphabet believes its ambitious AI investments will pay off over time, with ample growth opportunities across Gemini, Google Cloud, and Waymo. The stock just isn't offering that upside at a very appealing price right now.
6. Tesla Free-cash-flow yield: 0.5% Elon Musk is pivoting Tesla away from its roots in electric vehicles (EVs) toward autonomous vehicles and humanoid robotics. That future sounds exciting, but EVs still pay the bills for the time being. That places Tesla toward the bottom of this list with a paltry FCF yield of just 0.5%. It's not that Tesla can't deliver on Musk's goals, but paying such a high valuation to find out makes the stock riskier than some of the other Magnificent Seven names.
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7. Amazon Free-cash-flow yield: -0.1% As the world's leading cloud services company, Amazon has almost no choice but to expand data center capacity to compete in AI and protect its market share. That's tricky because Amazon's e-commerce segment operates on thin margins and doesn't produce much cash flow to help fund AI spending that could reach upward of $200 billion this year alone. The spending has cratered Amazon's FCF, putting it last on this list with a negative FCF yield. Investors must hope that Amazon can monetize these investments over the coming years.
Nvidia stock's NASDAQ:NVDA latest movement has little evidence that the AI infrastructure boom is losing momentum.
NVDA jumped 4% on Friday to close at $210.96, extending their weekly gain to about 8.3% as investors returned to the AI-chip leader following a period of relative underperformance.
The advance left the stock roughly 13% higher in 2026, based on its adjusted year-end close of $186.27.
Yet a warning from Taiwan has drawn attention to the financial conditions supporting that growth.
Central bank governor Yang Chin-long told lawmakers on July 9 that AI was driving genuine economic expansion, but excessive borrowing could encourage speculative investment and overbuilding.
Taiwan matters because TSMC sits at the centre of the supply chain, serving Nvidia and other global technology companies.
Yang did not declare that AI demand was about to collapse, nor did he single out Nvidia’s valuation.
His concern was that technology companies could borrow too aggressively and expand before the financial returns from their investments were fully established.
“AI is driven by real growth potential,” Yang said at the parliamentary hearing, while warning about over-expansion caused by excessive leverage.
That distinction goes directly to Nvidia’s business model. The company supplies the processors, networking equipment and complete systems used to build AI data centres.
Large cloud operators must spend heavily on chips, buildings, electricity and cooling before those assets produce meaningful revenue.
For Nvidia, greater hyperscaler spending supports near-term sales.
But if that expenditure creates weaker cash flow, rising debt or disappointing returns, customers could eventually delay data-centre projects, keep existing hardware running for longer or increase their use of cheaper custom processors.
Taiwan has therefore highlighted a financial-cycle risk rather than a product weakness.
Nvidia could remain the dominant AI-chip supplier and still suffer if the overall infrastructure budget grows more slowly.
Bank of America remains firmly bullish. Analyst Vivek Arya reiterated a Buy rating and $350 price target, arguing that investors are undervaluing Nvidia’s pricing power.
Nvidia can “sustain” roughly 65% to 70% of AI capital spending over the long term, Arya said in a research note.
He expects the Rubin platform to command higher prices than Blackwell, helping Nvidia maintain gross margins in the mid-70% range despite rising memory costs.
Goldman Sachs analyst James Schneider has also maintained a Buy rating, with a $285 target.
Schneider noted that Nvidia traded at less than 14 times his forecast for 2027 earnings, a valuation he considers compelling given the company’s growth.
Even after allowing for market-share gains by custom AI chips and rival processors, Goldman expects Nvidia’s revenue to climb about 55% to $635 billion next year.
The message from both banks is that competition is real, but Nvidia’s valuation already reflects a considerable amount of anxiety about it.
Empowering software and systems to make autonomous, split-second decisions can add $15.7 trillion in global economic value by 2030. Although Advanced Micro Devices (AMD) and Broadcom are garnering headlines, neither is a threat to Nvidia's dominance in AI data centers.
Since 2023, Nvidia (NVDA +3.90%) has been the stock to own. It crushed the market in 2023, 2024, and 2025. However, it's not looking so good in 2026.
As of this writing, Nvidia is up around 8.7% this year, while the market (as measured by the S&P 500) has risen 10.2%. That kind of underperformance is obviously disappointing to the countless Nvidia investors out there, and what makes it even more frustrating is that several other stocks, including rival Advanced Micro Devices, have had phenomenal years.
So, is it time to walk away from Nvidia and select a different artificial intelligence (AI) stock? Or is it time to double down on your investment in anticipation of a strong second half? Let's take a look.
Image source: The Motley Fool.
Nvidia's time is coming Since the AI arms race began in 2023, Nvidia's GPUs have led the way as the top computing option. Nvidia's GPUs and the products that support them dominate the data center sector and are the top choice for nearly every company involved in AI. This level of dominance helped propel Nvidia to become the world's largest company by market cap, but there are some challenges looming ahead.
One threat could come from AI hyperscalers specializing in computing chips, as custom AI chips are starting to become a popular option. However, these chips require a workload to be properly configured to maximize their abilities, and that's not always possible. So, GPUs will remain a popular option.
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With how bad Nvidia's stock has performed in 2026 (at least compared to the last three years' performance), investors may be surprised to see its rapid growth rates. During its past quarter, Nvidia's revenue increased at an 85% clip. That's not all, either, as Wall Street analysts expect 96% growth during Q2. Nvidia is still rapidly growing, making it a worthy investment, so why has the stock performed so poorly?
The most likely reason is skepticism of the AI build-out. The market isn't keen on the AI hyperscalers spending hundreds of billions of dollars on AI computing equipment, especially when a viable business hasn't been proven by any generative AI firm yet. However, Nvidia told investors last quarter that it expects AI hyperaccelerator spending to rise to over $1 trillion next year. I'm more inclined to believe Nvidia over the market's skepticism, as it likely has orders on the books for next year, so it can easily see the demand already.
As 2027 spending projections start to become apparent, I think Nvidia's stock will rally to close 2026. That makes right now the perfect buying opportunity, as the market isn't pricing any 2027 success into the stock, even if Nvidia says it's coming.
One of the biggest evolutions of Nvidia's (NVDA +3.90%) business model is that it has gone from just selling graphics processing units (GPUs) to designing full server rack systems to handle specific AI tasks.
This has been a key part of CEO Jensen Huang's strategy; however, it could have hit a snag when technology research outfit SemiAnalysis reported that its Kyber NVL144 next-gen AI rack system could be delayed until 2028 due to troubles with manufacturing a crucial circuit board.
Nvidia has come out and said its roadmap remains intact, although questions linger.
Image source: The Motley Fool.
Nvidia has been able to largely keep competitors out of the high end of the market through an aggressive technology roadmap, but physical manufacturing limits could finally be catching up to it.
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Kyber is designed to be at the heart of AI data centers to help push AI models forward, and it also has different variants for specific AI tasks like inference and agentic AI. A delay could help open the door for Advanced Micro Devices (AMD +2.13%) and Alphabet (GOOGL 0.50%) (GOOG 0.34%) to gain a foothold in the high end of the AI market.
AMD's biggest challenge is that there has always been a large software ecosystem gap between it and Nvidia. However, AMD has greatly improved its ROCm platform over the past few years, and the move of programmers working higher up the software stack and using open-source AI frameworks like OpenAI's Triton have helped close the gap, especially for inference.
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At the same time, AMD's chiplet designs, which can package more memory onto its chips, and its recent acquisition of memory optimization software platform Mext, position it well to offer a high-end server solution designed specifically for inference.
As for Alphabet, its Tensor Processing Units (TPUs) have become highly regarded AI chips, and with its next generation, it will have chips optimized for both training and inference. A delay in Kyber, meanwhile, could make its cost-efficient TPU offering look more attractive to customers that want a completely optimized system without the risk of delay or the cost of Nvidia's premium platform.
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Both AMD and Alphabet stocks look attractive Neither AMD nor Alphabet has to displace Nvidia as the king of AI infrastructure to be winners, as just getting a piece of the high-end market should be a big boost. AMD has already captured some big GPU deals, and it also looks set to ride the wave with its data center central processing units (CPUs), which become more important with agentic AI. Alphabet, meanwhile, is the most complete AI play, with both world-class chips and AI models, giving it a cost edge.
Taking some additional share from Nvidia would just be a bonus that undoubtedly would lift their stocks. I own both AI stocks and think their futures look bright.
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On an early July episode of Mad Money, Jim Cramer walked through the Magnificent Seven one stock at a time and pushed back on treating them as a single basket. Cramer’s charitable trust owns six of the seven, save Tesla, and the point was that each name has its own thesis, growth curve, and risks. Investors who dump the whole group when one stumbles leave money on the table.
The day’s price action helped make the case. Meta Platforms (NASDAQ:META | META Price Prediction) closed up 5.97% at $669.21 on July 10, while the broader S&P 500 gained just 0.43%. That is one name responding to its own capital spending story while the rest trade on their own catalysts.
Five Dimensions That Separate the Seven The framework: distinct business models, different growth curves, wildly different margin profiles, valuation gaps, and separate AI angles. Cramer’s breakdown is an argument for those five axes.
Meta: A Data Moat Funding a Superintelligence Bet Meta is an ad machine financing an AI moonshot. Q1 revenue hit $56.31 billion, up 33.08% year over year, with EPS of $10.44, helped by a tax benefit but still far above consensus. Management then raised 2026 capex guidance to $125 billion to $145 billion, per the Q1 8-K filing. That capex line is why the stock swings on infrastructure headlines, and why Meta’s 3.56 billion daily users give the spending story a scale few companies can match.
Alphabet: Search, Cloud, and a Gemini Distribution Story Alphabet (NASDAQ:GOOGL) posted $109.90 billion in Q1 revenue, up 21.8%, with Google Cloud growing 63% to $20.03 billion and backlog above $460 billion. Polymarket assigns a 92% probability that Alphabet beats its next quarterly report. The stock is up 14.26% year to date and 101.67% over one year. Gemini’s deeper integration across Android, Workspace, Cloud, and partner devices gives Alphabet a different AI path from Meta’s ad-first model.
NVIDIA: The Supplier Everyone Else Pays NVIDIA (NASDAQ:NVDA) sits at the center of nearly every major hyperscaler’s capex line. Q1 fiscal 2027 revenue hit $81.6 billion, up 85%, with Data Center revenue reaching $75.2 billion and Data Center networking growing 199%. The non-GAAP gross margin held at 75.0%. Jensen Huang called the AI factory buildout “the largest infrastructure expansion in human history,” and NVIDIA remains the company most directly monetizing that expansion. A trailing P/E near 32 reads modestly against 85% revenue growth.
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Apple: Hardware Cycle Plus Services Annuity Apple (NASDAQ:AAPL) reported a record March quarter of $111.18 billion, up 16.6%, with iPhone sales at $56.99 billion and Services at an all-time high of $30.98 billion. The board added another $100 billion buyback, highlighting the company’s cash-generation power. A trailing P/E near 38 says the market is still paying for Apple’s installed base, Services engine, and capital-return machine, not a pure AI infrastructure story.
Amazon: Retail Cash Flow, AWS Growth, Custom Silicon Amazon (NASDAQ:AMZN) posted $181.52 billion in Q1 revenue, up 17%, with EPS of $2.78, boosted by Anthropic-related investment gains but still ahead of consensus. AWS grew 28% to $37.59 billion, with operating margin reaching 37.7%. CEO Andy Jassy said Amazon’s chips business, including Graviton, Trainium, and Nitro, has topped a $20 billion annual revenue run rate. Prediction markets peg 98.5% odds that 2026 capex clears $170 billion.
Microsoft: Enterprise Copilot and an Azure Backlog Microsoft (NASDAQ:MSFT) delivered $82.89 billion in Q3 revenue with Azure and other cloud-services revenue up 40% and the AI business at a $37 billion annual run rate, up 123%. Yet the stock is down 20.3% year to date, the outlier in the group and a live example of Cramer’s point that these names decouple.
Tesla: The One Cramer Sets Aside Tesla (NASDAQ:TSLA) is the deliberate exclusion. Trailing P/E of 371, a 3.95% profit margin, and a 9.33% year-to-date decline describe a business that trades on robotaxi and Optimus optionality, a distinct thesis from the ad and cloud cash flows that anchor the other six.
The takeaway: companies growing anywhere from about 15% to 85%, carrying profit margins from 4% to 66%, and trading at trailing P/E multiples from 24 to 371 do not belong in one bucket. The Mag 7 label is useful shorthand, but it can blur the very differences that matter most. Investors who evaluate each thesis on its own have a better chance of holding the winners when one of the seven stumbles.
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Over 50,000 people already have, along with global giants like General Motors and POSCO.
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Nvidia's (NVDA +3.90%) market price hasn't increased as significantly as some of its peers.
*Stock prices used were the afternoon prices of July 9, 2026. The video was published on July 11, 2026.
Parkev Tatevosian, CFA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Many early Nvidia (NVDA +3.90%) investors have become millionaires. While new investors definitely wish they had bought shares earlier, the stock is still trending higher. It's up by 25% over the past year.
While this stock isn't going to double or triple in a single year again, it's still outpacing most growth stocks. Combine that with fundamental business growth that is outpacing those stock gains, and it's still possible for Nvidia to turn new investors into millionaires.
Image source: Getty Images.
AI chip demand is still surging Nvidia became a household name because of its AI chips, and sales of those semiconductors have not shown any signs of slowing down. High demand from tech giants has helped Nvidia command high profit margins and deliver record revenues.
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The company's fiscal 2027 first-quarter results encapsulate the ongoing demand picture. Revenue rose by 85% year over year to $81.6 billion. Guidance for its fiscal 2027 second-quarter is for $91 billion in revenue, which would be more than 10% sequential growth.
Net income more than doubled in the period as well, resulting in a net profit margin above 70%. It's difficult for any company to deliver those types of numbers; Nvidia shareholders have gotten used to them.
The rising use of agentic AI and physical AI will only boost the demand for Nvidia's GPUs. The chipmaker even hired an orbital data center system architect, showing that it's priming itself to supply chips to companies that have ambitions to deploy cloud servers on orbiting satellites. Between its strong positioning for the present moment and its investments to capture future opportunities, Nvidia is set up to provide solid returns to long-term investors, even those who have only recently started to accumulate shares.
Nvidia's valuation is cheap Valuation can make or break a stock thesis. A low P/E ratio can make a decent company look like a compelling buy, while mounting losses and a high price-to-sales ratio can make a promising company a bad investment.
Nvidia has growth rates and a long-term trajectory that any company would love to have. However, it also trades at a surprisingly low P/E ratio of 30. For the sake of comparison, Walmart (WMT +1.48%) has a 39 P/E ratio, and it's not reporting growth rates or profits anywhere close to Nvidia's.
Even better, its fundamental growth has been outpacing its stock price gains. Nvidia's 85% year-over-year revenue growth in its fiscal 2027 first quarter was a mismatch to the 25% in stock gains over the past year. The gap between its net income growth and the stock price growth is even larger.
Some investors are looking to put money into smaller AI companies that they hope will deliver the types of compound growth that Nvidia has over the past decade. However, Nvidia is still in a good position to reward new investors and turn some of them into millionaires.
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Artificial intelligence has completely changed the narrative for this decade. Hyperscalers continue committing hundreds of billions of dollars to data centers, Nvidia (NASDAQ:NVDA | NVDA Price Prediction) can’t manufacture AI chips fast enough to satisfy demand, and companies across nearly every industry are racing to deploy generative AI.
Investors have rewarded those building the infrastructure. Yet infrastructure spending is only half the story. The harder question is whether the companies buying AI are generating enough financial returns to justify the investment. According to venture capitalist Chamath Palihapitiya, that answer may soon determine the next stage of the AI boom.
The Productivity Numbers Aren’t Matching the Spending During a recent episode of the All-In podcast, Palihapitiya argued that the AI return-on-investment chickens are finally coming home to roost. His point wasn’t that AI has failed. Rather, he challenged investors to separate the companies selling AI from those buying it.
Excluding Nvidia, the cloud providers, semiconductor equipment manufacturers, and other AI infrastructure leaders, if you examine what the rest of corporate America has actually earned from its AI investments, you find a completely different situation.
The S&P 493 — the S&P 500 excluding the largest technology companies driving the AI boom — has produced roughly 9% earnings-per-share growth since generative AI entered the mainstream. Yet Palihapitiya believes only about 0% to 2% of that growth stems from AI-driven productivity. The remainder reflects inflation-driven pricing power and aggressive share buybacks rather than genuine operating improvements.
That distinction matters because AI spending continues accelerating while measurable productivity gains remain elusive.
The Data Suggests CFOs Are Losing Patience Let’s compare the investment boom with the financial results.
Metric Latest Data Source Enterprise GenAI spending (2025) ~$37 billion Industry estimates Growth versus prior year More than 3x Industry estimates CEOs reporting no AI revenue or cost improvement 56% PwC 2026 CEO Survey CEOs seeing both higher revenue and lower costs 12% PwC 2026 CEO Survey Estimated AI-driven EPS contribution for the S&P 493 0% to 2% Chamath Palihapitiya analysis The PwC 2026 CEO Survey reinforces Palihapitiya’s concern. More than half of CEOs reported AI had neither increased revenue nor reduced costs. Only 12% experienced both outcomes simultaneously.
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The industry even has a name for this phenomenon: pilot purgatory. Companies successfully demonstrate AI in small pilot projects but struggle to deploy it broadly enough to produce measurable financial gains. Meanwhile, spending has shifted from experimental innovation budgets into core operating budgets, placing AI investments under the scrutiny of chief financial officers rather than innovation teams.
Palihapitiya isn’t arguing AI belongs in that category forever. His point is that capital has a cost. If AI spending continues doubling, tripling, or quadrupling, those investments eventually need to generate returns above the risk-free rate available from Treasury securities. Otherwise, companies would have been better off leaving the cash on their balance sheets.
That’s an uncomfortable conversation because investors have largely focused on AI’s astonishing capabilities rather than its financial output. Capabilities alone don’t determine shareholder returns. Earnings growth, free cash flow, and return on invested capital do.
Key Takeaway In short, the AI investment story is entering a new phase. Building powerful models and deploying chatbots impressed investors during the first wave. The second wave will demand proof that AI expands margins, lifts productivity, and generates measurable earnings growth.
That doesn’t spell trouble for AI leaders like Nvidia or the hyperscalers, whose revenues continue reflecting strong infrastructure demand. But for the thousands of companies spending billions to adopt AI, the spotlight is shifting. Investors should spend less time asking whether AI works and more time asking whether it earns more than it costs.
Ultimately, the companies that can answer that question with hard financial results — not demonstrations — are likely to produce the next generation of market winners.
Meet America's Newest $1b Unicorn (Sponsor) A US startup just passed a $1 billion private valuation, joining billion-dollar private companies like OpenAI and ByteDance. Unlike those other unicorns, you can invest in EnergyX right now; but only until July 16.
Over 50,000 people already have, along with global giants like General Motors and POSCO.
Here's why there's so much interest: EnergyX's patented tech can recover up to 3X more lithium than traditional methods. That's a big deal, as demand for lithium is expected to 5X current production levels by 2040. Become an early-stage EnergyX shareholder before the 7/16 investment deadline.
The artificial intelligence (AI) revolution turned Nvidia (NVDA +3.90%) into a household name virtually overnight. Since the public launch of ChatGPT in late November 2022, Nvidia stock has risen by 1,100% -- making the company the most valuable business in the world.
However, 2026 has been an entirely different story. Shares of the semiconductor darling have gained a modest 5% so far this year. With the stock's parabolic rise coming to a halt, close observers may have noticed that Nvidia's price-to-earnings (P/E) ratio is now at its lowest level in seven years.
Let's dive into how this happened and what it means for an investment in Nvidia going forward.
Image source: The Motley Fool.
Nvidia maintains leadership in the AI chip stack, but investors worry about competition Nvidia's long roster of graphics processing units (GPUs) has helped the company maintain a central position in the hyperscaler AI chip stack. The company's chips serve as the primary engines for both training large language models (LLMs) and running inference deployments at scale.
Major cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) and frontier AI labs such as OpenAI and Anthropic are leveraging Nvidia's Blackwell GPU architecture and accompanying CUDA software ecosystem to build AI applications.
Skeptics highlight two main sources of risk when it comes to investing in Nvidia. On the macro side of the equation, some investors worry that AI hyperscalers could eventually moderate capex if returns on AI infrastructure investments prove slower to materialize. On the company-specific side, new accelerator architectures from Advanced Micro Devices and custom ASIC designs from Broadcom represent competitive threats that could erode Nvidia's market share in certain data center workloads.
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Where is Nvidia stock headed? I think the concerns detailed above are legitimate and explain much of the compression in Nvidia's P/E multiple. However, history offers a consistent pattern. The chart below illustrates that every prior period in which Nvidia's valuation profile compressed was followed by a powerful and sustained re-rating higher once earnings confirmed the durability of growth.
NVDA PE Ratio data by YCharts.
Why is this? The reason is simple: Markets ultimately follow earnings trajectories, not sentiment.
What investors are currently discounting is the fact that Nvidia is expanding beyond GPUs into adjacent layers of the AI stack. This includes investments and strategic collaborations with companies like Nokia, Marvell Technology, Coherent, and Lumentum. Through these relationships, Nvidia is becoming increasingly embedded across high-performance networking, CPU offerings optimized for AI systems, and optical interconnects needed to stitch enormous GPU clusters together.
These moves expand Nvidia's addressable market beyond general-purpose chips. As such, the company is in a position to create additional levers for revenue acceleration and compounded earnings. As Blackwell-driven revenue continues to materialize while diversification efforts scale, Nvidia's earnings base should widen -- setting the stage for meaningful valuation expansion.
All told, Nvidia's current P/E levels appear to embed a degree of normalization after years of extraordinary expansion. This is important to understand, because it helps silence the idea that there is a fundamental deterioration in Nvidia's underlying business.
Right now, investors are effectively pricing in the possibility that Nvidia's growth will moderate from its peak rates more than acknowledging how the company's absolute earnings power is positioned to expand. In turn, this creates a valuation setup that looks reasonable relative to historical trends, provided the company executes on its roadmap.
Adam Spatacco has positions in Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Broadcom, Coherent, Lumentum, Marvell Technology, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
Alphabet (GOOGL 0.48%) (GOOG 0.29%) has been developing its own Tensor Processing Units (TPUs) for years. But it wasn't until recently that the company started to see these processors not just as a side project but as a real alternative to Nvidia's (NVDA +3.90%) graphics processors.
The shift could be consequential for Nvidia, as Google focuses more on using its own processors and renting them to other AI companies.
Here's why Google's TPUs could be a bigger threat to Nvidia than investors might think.
Image source: Getty Images.
Custom processors are really good at AI compute It used to be that graphics processors were the hands-down winners for all things artificial intelligence.
But what AI companies have found recently is that designing their own custom processors can be a great way to achieve fast and efficient AI computing.
For example, Google's TPUs can handle AI workloads at an estimated total cost savings of up 30% compared to using chips made by other hyperscalers. That's because the custom processors can be designed specifically for how its Gemini AI model processes information.
Alphabet is spending up to $190 billion in capital expenditures this year, and management has said, "Next year, we expect it to significantly increase compared to 2026." Drastically reducing AI compute costs could help Google eventually run its AI data centers far more efficiently, and make its massive AI investments eventually worth the high cost.
And Google isn't the only one doing this. Many tech companies are looking more to custom processors to make their AI models more efficient and reduce costs. Space Exploration Technologies (SPCX 4.51%) is building what some are calling a "sovereign AI" in which SpaceX owns everything from the chip design and manufacturing to the AI model itself. And others, like Amazon and Microsoft, are designing their own AI processors as well.
All of which means that Nvidia could lose its dominance in the AI chip design market. It's not inevitable, of course, but as AI investments have skyrocketed, tech giants are trying to figure out how to make these investments pay off.
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Why Nvidia can't take this lightly Google announced a few months ago that it's starting a joint venture with Blackstone to deploy 500 megawatts of its own TPU capacity by 2027 and added that it has "plans to scale significantly over time."
That level of capacity shows Google is serious about using its TPUs as more than just a pet project.
What's more, it plans to rent some of that capacity to other tech companies. This system is called a neocloud business model, in which a tech company uses its own processors and data center and rents some of its capacity out to others. The rapidly expanding neocloud market could take 20% of the AI cloud market by 2030.
If more tech companies pivot to renting out Google's TPUs, or using their own processors, it will not only hurt Nvidia's market share in the AI data center space -- currently around 86% -- but it could also bring Nvidia's margins down.
Nvidia enjoys an enviable gross profit margin of about 74%, but with more competition looming from Google's TPUs, it might not be that long before Nvidia can't command the same pricing power it once did. And that could be one of the biggest threats to Nvidia's dominance in a long time.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) and SanDisk (NASDAQ:SNDK) delivered blockbuster quarters that pulled the AI infrastructure trade in opposite directions. Jensen Huang’s GPU platform posted $81.61 billion in fiscal Q1 revenue. Under CEO David Goeckeler, SanDisk’s NAND business is riding the AI storage boom. Fiscal Q3 revenue more than tripled, while Datacenter sales rose more than sevenfold from a year earlier. Jim Cramer noticed something odd about how the market is pricing them.
Cramer Calls the Multiple “Insulting” On the July 9 episode of Mad Money, Cramer took aim at the technical setup directly: “Some of the commodity chip companies like SanDisk now have price earnings multiples that are higher on next year’s earnings than Nvidia. I regard that as insulting.” He then added, “SanDisk is a commodity chip maker. Nvidia is the most proprietary chip company in the history of the world.”
Drama aside, the math backs his frustration. NVIDIA trades at a forward P/E of 23. SanDisk trades at a forward P/E of 28. The GPU monopoly is cheaper on next year’s numbers than the NAND supplier feeding its racks. It shows just how far the AI trade has widened, with investors now paying up for the memory suppliers that stock the very systems NVIDIA helped make indispensable. Even Jensen Huang has framed AI as essential infrastructure, a buildout that depends on more than GPUs alone.
It is a little A Few Good Men: Wall Street may not love the multiple, but the AI buildout still needs SanDisk in the supply chain.
Two Very Different Businesses NVIDIA’s Q1 FY27 performance was dominant. Data Center revenue reached $75.25 billion, up 92% YoY, with networking (InfiniBand, NVLink, Spectrum-X) revenue alone up 199%. Non-GAAP gross margin held at 75.0%. Huang framed the moment plainly: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.” Blackwell Ultra and the upcoming Vera Rubin platform anchor a full-stack roadmap that hyperscalers cannot swap out.
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SanDisk’s Q3 FY26 was a different shock. Revenue jumped 251% to $5.95 billion, and gross margin exploded to 78.4% from 22.5% a year earlier. Datacenter revenue grew 645% YoY. Goeckeler credited a mix shift and a “New Business Model” of multi-year customer commitments. That margin sits on NAND pricing, which is cyclical.
Lens NVIDIA SanDisk Forward P/E 23 28 Latest Gross Margin 75.0% 78.4% Business Type Proprietary GPU platform NAND flash storage YoY Revenue Growth 85.2% 251% Where the Rally Diverges From Reality SanDisk shares have run 707.11% year to date to $1,915.92. Our internal price prediction model tags SanDisk with a negative 13.62% expected return from here. NVIDIA is up 13.25% YTD with an analyst consensus target of $301.62 against a current price of $210.96. One stock is priced for continued dominance. The other is priced for a super-cycle that has never held for a full decade in NAND history.
Also worth a look: our research on AI infrastructure names beyond chipmakers adds context to how the buildout is spreading beyond silicon.
Why Cramer Is Right NVIDIA sells software-wrapped compute with a CUDA moat, a $119 billion supply chain-driven book/commitments, and hyperscalers on allocation. SanDisk sells a commodity that trades on spot pricing and hyperscaler order timing. Paying up for the commodity while getting the monopoly at a discount feels backwards. If NAND pricing softens even modestly in 2027, that 78.4% gross margin compresses fast, and the premium multiple has nowhere to hide. On a valuation-versus-moat basis, NVIDIA screens as the more defensible setup of the two.
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The U.S. economy has found a new engine for growth, and it is running at full throttle.
Artificial intelligence has evolved from a promising technology into one of the largest sources of business investment in decades. Technology giants are pouring hundreds of billions of dollars into data centers, advanced chips, software, and research, while companies across nearly every industry are racing to adopt AI tools. The spending has created jobs, boosted manufacturing, and lifted corporate profits.
Yet when one trend becomes this dominant, investors should also understand what happens if that momentum begins to cool.
AI Has Become the Economy’s Biggest Growth Driver According to Bloomberg, AI-related investment now accounts for more than 25% of U.S. GDP growth, the largest contribution ever recorded. Put another way, for every $4 the U.S. economy expands today, more than $1 comes from spending tied to artificial intelligence.
That investment stretches far beyond flashy chatbots. It includes:
AI Investment Category Economic Impact Software Enterprise AI applications and cloud platforms IT Equipment Servers, networking gear, GPUs, and storage Research & Development AI models, semiconductor design, and innovation Data Centers Massive infrastructure buildouts by hyperscalers The scale is unprecedented. Bloomberg’s analysis shows AI spending has climbed to roughly 8% of U.S. GDP. By comparison, spending on IT equipment, software, and R&D peaked near 6.5% of GDP during the height of the 2000 dot-com bubble.
To put that into perspective, the internet boom reshaped the economy for decades afterward. Today’s AI investment wave has already surpassed it as a share of economic output.
Microsoft (NASDAQ:MSFT | MSFT Price Prediction), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG), Meta Platforms (NASDAQ:META), and Nvidia (NASDAQ:NVDA) continue investing at historic levels because demand for AI computing remains strong. Collectively, these companies are committing hundreds of billions of dollars toward AI infrastructure, according to their earnings reports and capital spending guidance.
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General Motors, POSCO, and 50,000+ everyday investors have already backed lithium producer EnergyX.
Here's why you should do the same before their July 16 investment deadline: lithium prices are up 75% this year, with demand projected to grow a staggering 5X by 2040.
With tech that can recover up to 3X more lithium than traditional methods, EnergyX is preparing to unlock up to 15M+ tons. Become a private-stage EnergyX investor before the July 16 deadline.
Granted, those investments are producing tangible returns. Cloud revenue continues growing, AI services command premium pricing, and chipmakers are selling nearly every advanced processor they can manufacture.
Conversely, economic growth becomes more vulnerable when one source contributes such a large share of expansion.
If businesses decide they’ve built enough data centers, if AI adoption slows, or if companies delay capital spending because of weaker demand, that investment engine could lose momentum. The economy would not stop growing overnight, but one of its largest growth contributors would begin shrinking.
History offers a reminder. During the dot-com era, investment surged ahead of demand. When spending cooled, economic growth slowed even before many internet companies failed.
That does not mean AI is another bubble. Unlike many internet startups in 2000, today’s AI leaders are profitable businesses generating billions in annual cash flow. Still, even profitable companies eventually moderate spending once enough capacity is in place.
Key Takeaway In short, AI is no longer just a technology story — it has become an economic story. Bloomberg’s data suggests AI investment now generates more than one-quarter of U.S. economic growth while reaching a record 8% of GDP, exceeding even the dot-com era’s investment peak.
That said, investors should separate AI’s long-term potential from today’s spending pace. AI adoption is likely to continue for years, but capital investment rarely rises in a straight line forever. Ultimately, the companies that benefit from ongoing AI usage — not just the initial infrastructure buildout — may prove to be the more durable investments if spending eventually levels off.
Meet America's Newest $1b Unicorn (Sponsor) A US startup just passed a $1 billion private valuation, joining billion-dollar private companies like OpenAI and ByteDance. Unlike those other unicorns, you can invest in EnergyX right now; but only until July 16.
Over 50,000 people already have, along with global giants like General Motors and POSCO.
Here's why there's so much interest: EnergyX's patented tech can recover up to 3X more lithium than traditional methods. That's a big deal, as demand for lithium is expected to 5X current production levels by 2040. Become an early-stage EnergyX shareholder before the 7/16 investment deadline.
NVIDIA (NASDAQ: NVDA | NVDA Price Prediction) and AMD (NASDAQ: AMD) both closed strong quarters, but the ground shifted this week when Perplexity picked NVIDIA’s new Vera CPUs over x86 server chips for its multi-agent AI coding stack, running 1.5 times faster than standard server processors. That decision reframes the earnings comparison. One company now sells GPUs, CPUs, networking, and software as one bundle. The other is still assembling its answer.
AI Factories Carry NVIDIA. Data Center Carries AMD, Barely. NVIDIA’s Q1 FY27 showed revenue of $81.61B, up 85.2% YoY, with Data Center at $75.25B (+92%) and Networking at $14.8B (+199%). Jensen Huang framed it plainly: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.” Blackwell, NVLink Fusion, and Spectrum-X are selling as one unified stack.
AMD’s Q1 FY26 was solid but smaller. Revenue hit $10.25B (+37.9% YoY), Data Center reached $5.78B (+57%), and non-GAAP EPS came in at $1.37. Lisa Su leaned on the pipeline: “Customer engagement around MI450 Series and Helios is strengthening, with leading customer forecasts exceeding our initial expectations.” The MI450 volume ramp lands in H2 2026.
Business Driver NVIDIA AMD Data Center Revenue $75.25B $5.78B Non-GAAP Gross Margin 75.0% 55% Networking Attach InfiniBand, Spectrum-X, NVLink Fusion Pensando (subscale) Full Stack Sovereign vs. Fast Follower The Perplexity win validates NVIDIA’s push into a new $20 billion CPU vertical that used to belong to x86 vendors. NVIDIA is parlaying GPU share into host-CPU sockets, exactly the margin territory AMD’s EPYC franchise defends. AMD fights a two-front war: chase NVIDIA in accelerators with MI450/Helios and protect server CPU turf from Vera.
Customer deals look close on paper (OpenAI signed 10+ GW with NVIDIA and 6 GW with AMD), but NVIDIA’s CUDA-X and Dynamo software layer keeps inference workloads sticky. ROCm 7 is improving but still short of moat status.
The Next Test Is Whether Vera Actually Ships First, whether MI450 shipments in H2 2026 meet the “exceeding expectations” language Su used, since AMD’s 184x trailing P/E leaves no room for a slip. Second, whether Vera CPU adoption spreads beyond Perplexity into hyperscalers. NVIDIA guided Q2 revenue to $91.0B, and analysts carry a target of $301.62.
Why I Lean NVIDIA While Staying Constructive on AMD I lean NVIDIA here. The Perplexity decision signals that inference buyers default to Blackwell plus NVLink plus CUDA when latency matters. That is a moat. AMD remains healthy. Data Center up 57% and free cash flow of $2.57B (+253%) show the business is compounding. But shares already ran 140.99% year to date, and last week gave back 11.15%. For the platform winner, NVIDIA is cleaner. For the higher-variance catch-up trade, AMD works, provided Helios ships on time.
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Readers probably know Jim Cramer as the boisterous host of CNBC's Mad Money. What you may not know is that Cramer previously ran a hedge fund that earned an astonishing return of 24% annually over 14 years.
In the past month, Cramer has recommended buying shares of Nvidia (NVDA +3.90%) and Meta Platforms (META +6.16%). The stocks are up 1,300% and 460%, respectively, since January 2023. But most Wall Street analysts still think they are undervalued today.
Among 66 analysts, Nvidia has a median target price of $300 per share. That implies 42% upside from its current share price of $211. Among 68 analysts, Meta Platforms has a median target price of $815 per share. That implies 22% upside from its current share price of $669. Here's what investors should know.
Image source: Getty Images.
1. Nvidia Nvidia is best known for inventing the graphics processing unit (GPU). Those chips were initially designed to render computer graphics, but they have since become the industry standard in accelerating complex data center workloads, especially artificial intelligence (AI). Nvidia has more than 80% market share in AI accelerators.
However, the company is truly formidable because it offers a full-stack computing platform that pairs GPUs with the adjacent hardware and software required for AI. CEO Jensen Huang says Nvidia systems often have the lowest total cost of ownership because the company builds entire data centers, which means it can optimize for performance and power efficiency across the whole computing stack.
Nvidia has merely matched the performance of the S&P 500 year to date despite immense demand for AI infrastructure. The most pressing issue for many investors is competition. Several of Nvidia's customers have developed custom AI accelerators, sparking concerns that the company cannot maintain its dominance. But Brian Colello at Morningstar recently pushed back against that idea:
Nvidia has a wide economic moat, thanks to its leadership in graphics processing units, hardware, software, and networking tools needed to enable the exponentially growing market around artificial intelligence. In the long run, we expect tech titans to strive to find second sources or in-house solutions to diversify away from Nvidia, but these efforts will, at best, only chip away at Nvidia's dominance.
Last week, Jim Cramer expressed a similar view, saying investors are so focused on competition from hyperscalers like Amazon and Alphabet that they are overlooking an important fact: Demand for Nvidia GPUs is so immense that the company cannot keep up. "It's one of the cheapest stocks in the entire S&P 500 when gauged against its growth rate," he added.
Wall Street estimates Nvidia's adjusted earnings will increase by 56% annually through the fiscal year that ends in January 2028. That does indeed make the current valuation of 36 times earnings look downright cheap.
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2. Meta Platforms Meta Platforms stock has added 12% since Jim Cramer recommended buying shares on June 16. But he has continued to pound the table since then, particularly after Bloomberg revealed that Meta plans to launch a cloud computing business that will compete against Amazon, Microsoft, and Alphabet.
Most readers know Meta as a digital advertising giant. With 3.6 billion daily active users across its industry-leading social media properties, the company has a formidable data advantage that lets it target content and advertising. Meta has reinforced that edge with proprietary AI models that retrieve and rank ads, as well as AI creative tools that help brands build campaigns.
Of course, the company has spent a significant amount of money building AI infrastructure, designing custom chips, and creating proprietary models. Capital spending totaled $111 billion in 2024 and 2025, and Meta says it will hit $135 billion in 2026. But the company plans to launch a cloud computing business to help monetize those assets.
Bloomberg broke the story in June. "One potential plan includes selling access to various AI models that are hosted on Meta's existing AI infrastructure," according to the report. "The company is also considering selling access to 'raw' computing capacity, akin to other so-called neocloud businesses like CoreWeave."
Jim Cramer likes that strategy. He believes that Meta's "cloud business will be instantly profitable." While the S&P 500 has advanced 11% this year, Meta stock has traded sideways, as investors are uncertain whether the company can earn sufficient returns on its AI spending. But plans to sell excess data center capacity should ease those worries to some degree.
Wall Street expects Meta's earnings to increase at 15% annually through 2027. That makes the current valuation of 24 times earnings look very reasonable, especially given that Meta has beaten the consensus earnings estimate by an average of 6% over the last six quarters. I think Jim Cramer is right to be bullish.
July 16 could be a very important day for investors in all sectors of the market. Taiwan Semiconductor Manufacturing (TSM 0.55%) (or TSMC) reports earnings on that day, and it will have implications beyond just its stock.
TSMC is the primary chip fabricator for nearly any company involved in the AI build-out and tech fields. If it raises a red flag that chip demand has fallen off a cliff, it could crash the stocks of many of the computing unit manufacturers, like Nvidia (NVDA +3.90%). On the flip side, if TSMC reports positive earnings and tells investors that business is continuing to ramp up, it could send shares of its peers rallying.
Nvidia investors have been disappointed in 2026 because of lackluster performance. However, if TSMC reports strong earnings, I think it could be one catalyst the stock needs to send it higher.
Image source: Getty Images.
What can investors expect from Taiwan Semiconductor? TSMC isn't much for surprises. While most companies on the public markets wait until their earnings report to let investors know how much revenue they generated, TSMC announces it monthly. While we don't have June's revenue figures yet (and won't until after earnings), investors already know what occurred in April and May. In April, TSMC's revenue rose 17.5%, and in May it increased by 30.1%, in New Taiwan dollars.
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Companies don't often report monthly revenue because the market can get wrapped up in slow or fast growth, but monthly revenue is highly affected by working days and when orders are placed. The information doesn't replace the quarterly results, which smooth out some of that effect. However, it shows that demand for chips is still strong and that TSMC continues to expand.
For the second quarter, Wall Street analysts expect 35% revenue growth, but they also expect guidance for 40% growth next quarter. If TSMC's results and guidance exceed expectations, the stock could soar, and pull Nvidia up with it.
Nvidia stock has had a weak 2026 so far There have been few stocks as disappointing as Nvidia during 2026. Its stock has lost to the broader market for the better part of the year, as measured by the S&P 500 (^GSPC +0.42%). However, it has closed the gap in recent days and is performing similarly right now. But if you look at its earnings results, you wouldn't think that was the case.
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Last quarter, Nvidia's revenue rose a jaw-dropping 85% year over year. Next quarter, analysts expect 96% revenue growth. The reason for the hesitancy to send the stock higher is that the market is worried about the health of the AI build-out. There are growing questions about whether companies should be spending as much capital on AI data centers as they are, and that negative sentiment is affecting Nvidia's stock, even if the sentiment doesn't reflect the company's results.
Strong earnings and bullish language on its future from Taiwan Semiconductor will help change that notion, and if it does, Nvidia's stock could be ready to soar. It trades for a relatively cheap price tag of 22.8 times forward earnings, which is barely more expensive than the S&P 500 at 21.7, and far cheaper than TSMC at 27.5.
TSM PE Ratio (Forward) data by YCharts
Nvidia is growing faster than TSMC and is projected to continue doing so. There aren't a whole lot of good reasons for TSMC to be valued at a premium to Nvidia, and that could leave the door open for Nvidia to rally to a 30 times earnings or so valuation. If that's the case, then there's nearly 50% upside in Nvidia's stock ready to happen at any given moment, making it a perfect stock to buy now before earnings season begins.
Popular online brokerage Robinhood Markets does a very good job of providing public data that offers investors insights into its massive base of over 27.7 million funded customers. One example is its Robinhood Investor Index, which includes the 100 most popular stocks on the platform, weighted by how Robinhood investors allocate them in their portfolios.
Unsurprisingly, investors have locked onto artificial intelligence (AI) as a major market opportunity. These three prominent chip stocks sit among the index's top 10 holdings.
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1. Nvidia CEO Jensen Huang and Nvidia (NVDA +3.90%) quickly emerged as the industry leader as the data center boom took off in early 2023. Since then, Nvidia has dominated with each passing AI chip generation. The company has earned over $253 billion in revenue over the past year alone, and growth isn't stopping. Huang anticipates a staggering $1 trillion in orders through 2027 as Vera Rubin, its latest chip architecture, begins shipping later this year.
Image source: The Motley Fool.
Nvidia's popularity makes sense, given the stock's $4.75 trillion market cap. Despite its size, Nvidia is still relatively inexpensive. Shares trade at less than 23 times 2025 earnings estimates, and analysts are calling for annual earnings growth of 51% to 52% over the next three to five years. Nvidia continues to show that its graphics processing units (GPUs) are the building blocks of the AI era.
2. Alphabet Google is one of the most recognized tech brands, but Alphabet's (GOOG 0.29%) (GOOGL 0.50%) diverse tech empire also includes Google Cloud, Chrome, Android, YouTube, Waymo, and more. Although Alphabet isn't a traditional chip stock, the company became one after successfully designing and implementing Tensor Processing Units (TPUs), custom silicon chips for its own AI stack. It went so well that Alphabet has started selling TPUs to other companies.
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Alphabet is using AI technology across its entire company, giving it multiple ways to monetize the massive data center investments it continues to pour billions of dollars into. The stock still trades at a reasonable valuation, approximately 25 times 2026 earnings estimates. Analysts also see healthy growth ahead, with estimates calling for 16% to 17% annual earnings growth over the next three to five years.
3. Advanced Micro Devices (AMD) The chip market is far too large for just one company. Advanced Micro Devices (AMD +2.13%), or AMD for short, doesn't have anywhere near the market share that Nvidia has in AI data centers, but it's no slouch by any means. The company has its own processor and GPU offerings, and data center sales grew by a blistering 57% year over year in the first quarter of 2026.
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Even if Nvidia maintains its top spot in data center chips, competition remains important for the industry. AMD should remain a player, and the company's growth outlook reflects that. Analysts see AMD's earnings growing by an average of 55% to 56% annually over the next three to five years. That blistering growth helps justify AMD's lofty valuation at 72 times 2026 earnings estimates.
Nvidia (NVDA +3.90%) is up by 12% year to date, and yet it has gotten a lot cheaper. If a company's earnings growth outpaces its recent stock gains, that stock presents a more compelling valuation for new investors.
It doesn't mean long-term investors got robbed. Nvidia has still outperformed the S&P 500 so far this year. However, the reduced valuation suggests Nvidia can rally even higher, especially if it releases solid earnings near the end of August.
Image source: Getty Images.
How the forward P/E ratio is calculated The forward P/E ratio doesn't just look at a stock's current price and earnings. This metric estimates how much a company's earnings will grow in the upcoming year, indicating what the P/E ratio would look like if the stock's price stayed flat.
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For instance, a company with a $1,000 stock price and a $40 EPS has a P/E ratio of 25. However, if this same company is expected to grow its EPS by 25% next year, it would wind up with a $50 EPS. This forecast hasn't happened yet, so it won't show up in the current P/E ratio.
However, the forward P/E ratio includes this projected growth rate, resulting in an anticipated $50 EPS. Then, the forward P/E ratio becomes 20 in this example.
If this hypothetical stock delivered gains below 25% over the past year, then its forward P/E ratio would have dropped even if the stock price went up.
How this applies to Nvidia Even though the stock is up by roughly 12% this year, the company's forward P/E ratio has dropped to 23.2. This same metric was closer to 40 at the end of July 2025.
The simple answer is that Nvidia's net income growth rate has outpaced its stock gains. Net income more than tripled year over year in Nvidia's fiscal 2027 first quarter. When such a large gap exists between earnings growth and stock gains, a company's forward P/E ratio can drop considerably.
Nvidia's guidance suggests that these types of growth rates will continue. A projected $91 billion in fiscal 2027 second-quarter revenue implies more than 10% sequential sales growth. Higher sales growth translates into an elevated EPS projection, which produces a lower forward P/E ratio.
Investors shouldn't just look at metrics like revenue, profits, and forward P/E ratios when assessing stocks. However, combining Nvidia's vast competitive moat in the critical AI chip industry with those metrics makes the stock look compelling.
Artificial intelligence (AI) is a new and transformative technology. There has been a mad rush to build AI tools and infrastructure as companies like Space Exploration Technologies (SPCX 4.51%), Amazon (AMZN 0.73%), and Nvidia (NVDA +3.90%) spend heavily to stake out leadership positions. Not every company can become a winner, so much of the spending now underway may be in vain.
When the excitement around AI fades and investors demand results, the AI bubble will likely deflate. The downturn could be harsh if too much debt is taken on to cover wasted investment. And the cracks may already be showing.
Image source: Getty Images.
What's going on with Meta? Meta (META +6.16%) just announced that it would lease out excess AI capacity that it has built. The stock rose on the news, as investors seemed to feel that the company had found a new way to profit from AI. However, a cynical view of the situation would be that Meta built more AI capacity than it needed and is now trying to salvage some value from that investment.
Notably, Meta has also held internal conversations about its AI investments not progressing the way the company had hoped, according to Reuters. And, to top it all off, the company recently raised $25 billion to fund its artificial intelligence spending, after raising $30 billion in late 2025. Pricing around the recent $25 billion capital raise suggested investors are more fearful than during the $30 billion capital raise, according to Bloomberg.
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The problem is that Meta isn't the only company raising capital. After raising a massive $75 billion in an initial public offering (nearly $86 billion if you include the overallotment for the investment bankers), SpaceX raised another $25 billion via a bond sale. Some market watchers who spoke to CNBC warned that the bond sale, coupled with the equity raise, could lead to concentration risk in investor portfolios for those who went all in on the SpaceX IPO.
SpaceX is losing money right now, which isn't surprising for a start-up. However, part of the problem is the heavy spending taking place in the company's AI division.
More debt and some unique arrangements These aren't the only technology giants that are spending heavily on AI. Or the only ones that are selling debt. For example, Amazon is reportedly raising $25 billion via a debt sale. Interestingly, people familiar with the deal say Amazon told the underwriters it wouldn't seek additional debt financing in 2026. It seems likely that this assurance was intended to address investor concerns that Amazon was issuing too much debt.
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Nvidia just issued $25 billion in bonds. However, Nvidia has also been making other deals that raise questions, too. It has been offering revenue-sharing arrangements with AI companies, which help support near-term demand for Nvidia chips, but it offers only a cloudy outlook on the revenue front. Nvidia has also been investing in other AI companies, creating financial ties between the chipmaker and its customers. There's no clear view on whether the investments will work out, but the multi-billion-dollar deals could increase risk in ways that are hard for investors to see.
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These deals aren't officially debt, but Nvidia is still increasing the risk for investors in the AI sector. If the revenue from such revenue-sharing deals isn't substantial, the spending needed to support them will have been wasted. And if Nvidia's investments don't work out, it could be forced to take big write-offs. No wonder investors are starting to get concerned about the AI spending spree that's taken shape. In fact, for those old enough to remember, this period is eerily similar to the dot-com bubble.
The pattern repeats itself over and over Is this a bubble? Most likely. But there's no telling when it will end. However, bubbles travel a fairly predictable path: displacement, boom, euphoria, profit-taking, and panic.
^IXIC data by YCharts
The displacement phase was the introduction of AI. The market is likely past the boom (the rapid increase in AI investment) and late in the euphoria phase, since AI has become such a big investment story. However, the rising concerns among investors that AI spending may have gotten ahead of itself, leading to periods of profit-taking, is a worry. And the ongoing debt-fueled spending increases the risk.
If profit-taking gains speed, it could tip into panic. At that point, investors will try to dump anything related to AI, from equity investments to debt investments. There's no way to know when that will happen, and the bubble could go on much further than anyone expects. But the timing of the bubble's end is getting closer, not further away. Let's just hope it deflates slowly and doesn't burst like the dot-com bubble, which took the Nasdaq down by nearly 80% before the selling finally subsided.
NVIDIA (NASDAQ: NVDA | NVDA Price Prediction) and Tesla (NASDAQ: TSLA) just delivered earnings that put two very different AI stories side by side. Tesla finally began fulfilling its decade-old autonomy pitch with unsupervised Robotaxi rides in Dallas and Houston. NVIDIA, meanwhile, kept printing money from AI factories. The stocks are moving in opposite directions, and the businesses behind them look nothing alike.
Data Center Cash vs. A Long-Awaited Robotaxi Moment NVIDIA’s Q1 FY2027 print was extraordinary. Revenue hit $81.6 billion, up 85.2% year over year, with Data Center alone at $75.25 billion and networking growing 199% YoY. Non-GAAP gross margin held at 75.0%. Jensen Huang framed the moment plainly: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.” The board answered with an $80 billion buyback authorization and a dividend hike to $0.25 per share.
Tesla’s Q1 2026 was smaller but symbolically loud. Revenue reached $22.39 billion, up 15.8% YoY, and EPS of $0.41, topping consensus expectations. Automotive gross margin snapped back to 21.1% from 16.2%, helped by lower material costs and one-time warranty and tariff gains. FSD subscriptions climbed to 1.28 million, up 51% YoY. The autonomy story is real now. So is the fact that vehicle deliveries grew only 6% YoY and energy storage revenue fell 12%.
One Sells Shovels. The Other Sells a Vision. Lens NVIDIA Tesla Trailing P/E 30 382 Core engine Data Center compute and networking Vehicles today, robotaxi and Optimus tomorrow Operating margin 65.6% 4.2% Key vulnerability China compute revenue excluded from guidance Battery pack capacity, BYD pricing, 27 days inventory NVIDIA collects cash on every physical handoff, locked in by CUDA and $119 billion in supply commitments. Tesla is a capital-heavy automaker asking investors to keep paying for a software future, with a hyper-inflated trailing P/E over 350x on a 5.9% EBIT margin. Prediction markets remain skeptical of the promised milestones: only 11.5% probability is assigned to a California robotaxi launch by year-end and 12.5% to an Optimus release.
The Next Test Is Whether Tesla’s Milestones Compound I will be watching whether Tesla can scale Cybercab pilot production, Megapack 3, and Optimus lines without further margin dilution. For NVIDIA, the question is Q2 FY27 guidance of $91 billion in revenue, delivered without any China compute contribution. That is a heavier lift than it sounds.
Why I Lean NVIDIA Over Tesla Right Now If you want AI exposure that pays its own way, I lean NVIDIA. At $195.55 with a P/E near 30, you are paying for realized cash flow, not a Miami marketing push. Tesla at $419.77 may reward a turnaround investor if Robotaxi scales, but the valuation leaves almost no room for slippage. I would rather own the picks and shovels than another “imminent” promise.
Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.
Nvidia (NVDA +3.90%) is known as one of the most advanced makers of chips powering the breakthroughs in artificial intelligence (AI). But what some people may not know is that Nvidia is also an investor in other companies.
Among its investments, it holds stakes in cloud computing provider CoreWeave, chip designer and manufacturer Intel, and telecommunications company Nokia. But at the bottom of one of its May financial filings, it also listed an investment in a small biotech company: Generate Biomedicines (GENB 8.87%).
That may not seem to fit the pattern of investing in tech operators. But Nvidia CEO Jensen Huang sees an important intersection between the healthcare field and AI.
Image source: Getty Images.
AI's role in the future of healthcare At a January conference, Nvidia announced it was forming an AI co-innovation lab with Eli Lilly. Over five years, both companies plan to jointly invest up to $1 billion in the lab's infrastructure and research.
For the collaboration, Eli Lilly will bring its medical expertise, while Nvidia will contribute its AI know-how to expedite drug research. "AI is transforming every industry, and its most profound impact will be in life sciences," Huang said in Nvidia's press release.
With that as a reference point, there's a natural fit for Nvidia to invest in Generate Biomedicines.
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Combining AI and machine learning with healthcare Generate Biomedicines uses AI and machine learning to accelerate drug development and deliver novel medical solutions.
For instance, drug candidate GB-0895 is designed to help treat asthma and could reduce treatment frequency from once a month to just twice a year. Phase 3 trials for GB-0895 as a treatment for severe asthma are currently underway.
As Nvidia looks to show its chips can be used for more than just powering chatbots, healthcare is a natural fit. Its hardware could be involved in everything from processing clinical trial data to drug discovery to robotic-assisted surgery.
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Should you follow Nvidia's investing lead? Nvidia's May 13F filing showed that as of the end of the first quarter, it owned just over 833,000 shares of Generate Biomedicines, a stake valued at $10.4 million. For a company with a $4.9 trillion market cap, that may not seem like a significant investment. To be fair, it's not, but it's still a smart investment by Nvidia.
There's a lot of promise in using AI in the healthcare sector, but there are also plenty of risks, along with even more unknowns. With a relatively small investment, however, Nvidia can give Generate Biomedicines more financial wiggle room to commercialize its drug pipeline.
If Generate Biomedicines can commercialize its drugs, even though Nvidia's stake is small, it would be a financial win for Huang's company. But even more importantly, it would be a proof point of how AI powered by Nvidia's chips is helping uncover medicines that go on to be commercialized.
SummaryKyber delay concerns remain unconfirmed, while Nvidia maintains its roadmap and $91 billion quarterly revenue outlook.Nvidia's second AI wave expands beyond hyperscalers into enterprise, sovereign AI, and agentic applications globally.AI Cloud, Industrial, and Enterprise revenue grew 31% sequentially, while AI Cloud revenue tripled year-over-year.Nvidia's ecosystem, software moat, and AI factory strategy support growth beyond traditional GPU demand cycles. PonyWang/iStock via Getty Images
Introduction The industry is still thinking about Nvidia (NVDA) in the context of the first wave of AI, where demand was largely limited to a select group of hyperscalers looking to train ever-more complex foundation
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Ask the question "Could this stock be a millionaire-maker?" about most trillion-dollar companies, and the honest answer has to be "Probably not."
Ask it about Nvidia (NVDA +3.90%), whose market cap of roughly $4.7 trillion makes it the most valuable company on the planet, and the answer gets more interesting: Yes, it still can -- but you'll have to bring a lot of cash to the table.
Let's be blunt about the size problem, because it's the whole story. To turn a $10,000 stake into $1 million, Nvidia would need to rise by around 100-fold. Over the past 10 years, it has more than done that. But for a company that is now already worth more than the entire German stock market, repeating the trick would imply a market cap somewhere north of $470 trillion -- larger than every public company on Earth combined today. That is not going to happen in one lifetime, and no amount of AI-related enthusiasm changes the arithmetic.
Image source: Getty Images.
So the millionaire path here isn't leverage. It's the size of your commitment. A patient investor who puts $200,000 into Nvidia and watches it quintuple over a decade -- a demanding result, but not a fantastical one for a dominant franchise -- would arrive at a seven-figure holding. The stock can still make you rich. It just asks you to already be fairly wealthy to start with, or to invest heavily and wait a long time.
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What Nvidia is becoming Here's the part I find more telling than any growth chart. Nvidia is no longer just selling chips; it's financing the ecosystem that buys them. The company has committed up to $100 billion to OpenAI's infrastructure build-out, is investing $2 billion in optics maker Coherent, another $2 billion in cloud provider Nebius, and struck long-term U.S. manufacturing deals with Corning and data center operator Iren.
To me, that makes Nvidia more of a kingmaker, closer in spirit to an underwriter of an entire industry than to a moonshot. It's a durable, defensible position. It is also, almost by definition, not the profile of a stock that is going to multiply even 50-fold from here.
Where the higher-leverage bets actually live If your goal as an investor is to find a stock with the potential to deliver a lottery-ticket outcome -- one where a relatively small initial position can eventually change your life -- Nvidia is the wrong pick. That asymmetry was largely captured by people who bought a decade ago. The higher-torque opportunities now tend to live in the smaller suppliers Nvidia depends on: the optics, power, and cooling names, and the still-private challengers that Nvidia itself is funding.
I think Nvidia remains a good choice for a foundational portfolio holding, and patient owners of the stock will likely do well. But be honest about the assignment: This is a compounding blue chip now, not a rocket. Size your position for steady wealth-building, and hunt elsewhere if what you truly want is explosive, high-risk upside potential.
Ten years ago, Nvidia (NVDA +4.03%) was known mostly for making graphics cards that gamers cared about. Adjusted for its later stock splits, the shares traded for about $1.28 in the summer of 2016.
Today they change hands near $204. A $10,000 investment back then would have bought roughly 7,800 shares -- worth about $1.6 million now. That is a gain of nearly 160-fold, from a single, unglamorous chip stock.
The number is staggering. But the more useful question for investors today isn't how big the gain was. It's what produced that gain, and where anything close might come from now.
Image source: Nvidia.
What turned $10,000 into a fortune For most of the past decade, Nvidia's rise rested on a bet that proved enormous: that its graphics chips, originally built to render video games, were also the ideal engines for artificial intelligence (AI).
That bet paid off spectacularly. When the AI boom arrived, the parallel computing power packed into Nvidia's chips made them the default hardware for training and running AI models. Demand exploded, and Nvidia had a years-long head start on the software and networking wrapped around those chips.
Additionally, Nvidia's software has kept customers loyal. Developers built their AI systems on its programming tools over many years, and that installed base makes the switching costs high for its customers.
Nvidia is no longer just a chip company, either. It now sells entire systems that bundle processors, networking, and software, deepening its hold on the data center. Together, those advantages have let it hold both its share and its pricing even as competitors piled in.
Its dominance, of course, is clear by its financials. In the fiscal first quarter of 2027 (the period ended April 26, 2026), Nvidia posted record revenue of $81.6 billion, up 85% year over year. Its data-center business alone brought in $75.2 billion, up 92%.
And the company's profit growth has been extraordinary. Earnings have compounded so quickly that the stock, up nearly 160-fold, has actually kept pace with the underlying business rather than racing far ahead of it. This is clear from the stock's price-to-earnings ratio of just 31 today.
That last point matters. A 160-fold gain sounds like pure mania. But it was largely earned, not just imagined.
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Can anything like it happen again? Here is the hard truth for anyone hoping to catch the next Nvidia in Nvidia. The math simply won't allow a repeat.
Nvidia is now worth about $4.9 trillion, one of the most valuable companies on Earth. Turning that into another 160-fold gain would require a market value of several hundred trillion dollars -- larger than every stock market on the planet combined. It isn't going to happen.
So the honest expectation is far more modest. From here, Nvidia's returns will track its business, not another once-in-a-generation rerating stacked on top of it.
The good news is that the business still looks like it's firing on all cylinders. Data-center revenue is still growing fast, and guidance calls for revenue of about $91 billion in the current quarter, another step up. The giant cloud providers that buy most of its chips are still expanding their AI budgets, which underpins demand. The newest Blackwell chips are ramping. And despite the enormous market value, the stock isn't priced like a bubble. It trades at about 31 times trailing earnings and closer to 20 times expected earnings over the next 12 months.
Of course, there are real risks. The AI build-out could slow, big customers are designing their own chips, and a business this cyclical rarely grows in a straight line. A stock that has come this far already has plenty of optimism baked in.
So what's the takeaway from that $1.6 million?
Mostly, it's a lesson in what patience plus a genuine technology shift can do -- and a reminder not to anchor on the past. The investor who turned $10,000 into a fortune did it by owning a business that grew into something the market couldn't yet imagine. Nvidia can still be a fine investment from here, and I wouldn't bet against it lightly. But anyone hunting for the next 160-bagger should probably be looking somewhere smaller, earlier, and far less famous.
Your feed is stuffed with NVIDIA takes. The most talked-about stock on Earth is up 13.25% year to date through July 10, 2026, and if you didn’t own it, you probably feel like you missed the trade of the decade.
Here’s the twist: you didn’t. A plain, boring semiconductor ETF outran the most famous chip stock on the planet over the same stretch. Meet the VanEck Semiconductor ETF (NASDAQ:SMH).
Same window, same as-of date: SMH is up 69.67% year to date through July 10, 2026. That’s not a typo. The diversified basket lapped the marquee name.
The Numbers, No Spin From December 31, 2025 through July 10, 2026, NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) went from $186.28 to $210.96. SMH went from $360.13 to $611.03. The diversified basket turned in the stronger result over the same stretch.
Zoom out one year and the gap widens. NVDA is up 28.72% over the trailing 12 months. SMH is up 113.17% over that same stretch. The diversified basket didn’t just keep up. It ran harder.
Same Tide, Bigger Boat What lifted NVIDIA lifted the whole complex. The AI infrastructure buildout: hyperscaler capex, sovereign AI projects, the Blackwell ramp, agentic workloads spilling into enterprise. Jensen Huang put it plainly on the May 20, 2026 earnings call: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.”
NVIDIA’s own numbers show it. Q1 FY2027 revenue hit $81.61 billion, up 85.2% year over year, with Data Center Networking alone growing 199%. But that networking growth needs switches and memory and lithography tools and foundry capacity. Foundries need equipment. Equipment makers need wafers. Memory chips end up glued to every accelerator shipped.
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SMH owns that whole value chain as a basket: chip designers, foundries, memory shops, equipment vendors. When the AI capex wave rolls in, it doesn’t just wash over one ticker. It floods the whole beach. You didn’t need to pick the single winner. You needed exposure to the thing making winners.
The Trade-Off You Skipped Here’s the trade-off. Buying a single hot name can pay more when it works. But single-stock risk is a real cost, not a slogan. Ask anyone who chased Super Micro Computer (NASDAQ:SMCI) into its 2024 peak before the accounting drama and delisting scare cut the stock roughly in half. Same AI theme. Very different outcome.
SMH spreads the bet. Its top-ten holdings include AMD at 10.33%, Broadcom at 9.57%, Micron at 9.39%, Taiwan Semiconductor at 8.75%, NVIDIA at 8.40%, ASML at 8.13%, Intel at 8.13%, Lam Research at 5.62%, Applied Materials at 5.53%, and Texas Instruments at 4.52%. Designers, foundries, memory, equipment. All the shovels, not just one miner. And you pay 0.35% a year for the diversification.
Process Over Prediction Chasing the hot ticker is stock-picking with extra regret attached. Miss it, and you kick yourself. Buy it late, and every red day feels personal. Owning the theme dulls both edges. You capture the current without needing a crystal ball on which name inside the current wins any given quarter.
NVIDIA holders made real money this year, and that’s fine. So did people who never opened a position and just held a boring basket of chip stocks. The forward question isn’t which stock rips next. It’s whether your process gets you paid for being right about the theme, even when you’re wrong about the ticker.
This year, in this corner of the market, the process worked without the pick.
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Key Takeaways SK Hynix made its debut, with the stock seeing a nice initial pop. The company is a leader in High-Bandwidth Memory (HBM). The debut further reinforces how fierce the broader AI trade remains. It’s been quite a busy period for debuts over the past month or so, with the SpaceX (SPCX - Free Report) IPO undoubtedly reflecting one of the biggest market events we’ve seen this year. And just recently, South Korean giant SK Hynix made its Nasdaq debut.
Notably, it marked the largest-ever U.S. market debut by a foreign company, surpassing Alibaba’s (BABA - Free Report) back in 2014.
Who is SK Hynix?SK Hynix commands a massive chunk of the global market for High-Bandwidth Memory (HBM), which is the vertically stacked, ultra-fast DRAM chips essential to power Nvidia's industry-standard AI accelerators. And as we’ve all grown accustomed to, Nvidia systems will likely continue to be the go-to for the companies clamoring for compute in the years to come.
The offering was seven times oversubscribed, and shares have popped nicely on the debut so far given the appetite for exposure to the memory component of the AI trade.
Given the red-hot demand for its solutions, SK Hynix plans to deploy the proceeds to construct massive new chip-fabrication plants and advanced packaging facilities to aggressively ramp up production of its high-demand AI memory (HBM).
Bottom Line
SK Hynix’s debut fully reinforces that the AI infrastructure environment remains absolutely robust. We’ve had the trend confirmed many times so far just this year, whether that’s through the massive CapEx outlays from mega-cap tech, the massive boom we’ve seen for power solutions powering the infrastructure, or the historical growth from Nvidia (NVDA - Free Report) .
In his Mad Money broadcast on July 9, Jim Cramer defended a former tech-market darling, arguing that the market has the valuation math backwards. His frustration centered on why sellers keep unloading NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) while assigning higher forward multiples to memory names like SanDisk (NASDAQ:SNDK).
Cramer put it directly: “Some commodity chip companies like SanDisk now have price-earnings multiples higher on next year’s earnings than NVIDIA.” He added, “I regard that as insulting. Nvidia is the most proprietary chip company in the history of the world.” NVIDIA stock traded at $209.79 Friday afternoon, with a market cap of around $5.08 trillion.
The forward multiple data supports the argument. NVIDIA stock carries a forward price-to-earnings ratio of 23x and a trailing multiple of 31x, while SanDisk stock trades at a 27x forward multiple and a 59x trailing figure.
The Proprietary Moat Cramer Is Defending NVIDIA’s most recent quarter puts hard numbers behind the moat argument. The company’s Q1 FY2027 revenue reached $81.61 billion, up 85% year over year (YoY), with Data Center revenue of $75.25 billion and Data Center Networking up 199%.
NVIDIA’s non-GAAP gross margin expanded to 75%, and management guided Q2 FY2027 revenue to $91 billion. The proprietary layer runs deeper than silicon: CUDA-X software, NVLink Fusion compute fabric, Spectrum-X Ethernet, and the Dynamo inference stack lock developers into NVIDIA’s architecture in ways commodity accelerators cannot replicate.
CEO Jensen Huang has repeatedly framed the AI infrastructure buildout as the largest in human history, and deployment commitments from OpenAI, Anthropic, Meta Platforms (NASDAQ:META), Oracle (NYSE:ORCL), and xAI translate that into tangible order flow for NVIDIA’s Blackwell and Vera Rubin platforms.
Wall Street sentiment reflects the view. NVIDIA stock currently carries 10 Strong Buy, 48 Buy, 2 Hold, and 1 Sell rating, with an average analyst price target of $301.62.
The SanDisk Comparison SanDisk stock has been on a rocket ride. Shares are up 710% year-to-date (YTD), if you can believe it. SanDisk’ Q3 FY2026 revenue jumped 251% YoY to $5.95 billion, with Datacenter revenue up 645% YoY.
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SanDisk sells NAND memory, a product category that historically cycles through boom-and-bust pricing tied to industry-wide capacity. That structural difference is what Cramer was pointing at when contrasting proprietary economics against commodity economics.
The Bear Case Worth Considering A cheaper forward multiple on NVIDIA stock can reflect the market pricing in decelerating growth off a large base. NVIDIA’s FY2026 revenue reached $215.94 billion, and comparable percentage growth becomes mathematically harder. Customer concentration among hyperscalers, China export restrictions, and rising cash taxes are real considerations.
A lower multiple can be a rational discount rather than clear mispricing. For investors weighing entry, moderating one’s position size makes sense given NVIDIA stock’s 2.21 beta and history of sharp drawdowns. Readers exploring the broader AI thesis can review our 7 Stocks Powering the AI Boom report for adjacent names benefiting from the buildout.
For investors wanting NVIDIA exposure without single-stock risk, the iShares Semiconductor ETF (NASDAQ:SOXX) offers broad sector access. The concentration risk remains meaningful, though, as NVIDIA sits among the fund’s top holdings.
The Bottom Line Cramer’s core claim is defensible on the data. NVIDIA stock’s forward multiple sits below SanDisk’s despite carrying arguably the strongest software moat and highest-margin franchise in semiconductors. The proprietary software layer, from CUDA to Dynamo to NVLink Fusion, separates NVIDIA from any peer chipmaker.
A discount can reflect legitimate concerns about the law of large numbers, cyclical risk, and hyperscaler concentration, and both realities can coexist. Investors should keep their position sizes calibrated to the stock’s volatility, and diversification through semiconductor ETF exposure can soften single-name risk.
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Technology stocks have spent much of the past year battling two competing narratives. First came concerns that artificial intelligence would automate away parts of the software industry. Then investors began questioning whether the AI spending boom itself could last long enough to justify today’s valuations.
The result has been uneven performance across many technology names despite continued investment in AI infrastructure. Yet market sentiment often swings too far in both directions. One of the investing principles championed by legendary Fidelity Magellan manager Peter Lynch now suggests the pendulum may be starting to swing back in favor of technology stocks.
Peter Lynch’s Favorite Signal Is Flashing Green Peter Lynch remains one of Wall Street’s investing icons after generating a 29.2% average annual return during his 14-year run managing Fidelity Magellan between 1977 and 1990. His investing classic, One Up on Wall Street, showed everyday investors they could outperform professionals by focusing on businesses they understood and by paying attention to a handful of reliable signals.
One of his best-known observations concerned insider buying.
“Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.”
That idea has taken on renewed importance today.
According to data compiled by SentimenTrader and highlighted in a recent Seeking Alpha article, corporate insiders across the technology sector are purchasing shares of their own companies on the open market at the fastest pace in roughly 15 years. Importantly, these are open-market purchases reported through SEC Form 4 filings — not stock option exercises, restricted stock grants, or compensation awards.
That distinction matters. When executives receive stock as part of their compensation package, they aren’t making an investment decision. Open-market purchases require them to spend their own cash under the same market conditions as every other investor. In short, management is putting real money behind its conviction.
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But it is important to keep that in perspective. Insider purchases are valuable because executives understand their businesses better than outside investors. They know product pipelines, customer demand, hiring trends, and capital allocation plans before quarterly earnings reveal the full picture. Yet insiders can also be wrong. Competitive pressures, slowing revenue growth, or deteriorating industry conditions can overwhelm even management’s confidence.
Lynch never suggested blindly buying every stock after an insider purchase. Instead, he viewed insider buying as confirmation that deserved further investigation.
Just as notable might be the tech executives not buying their stock, despite the pullback. Insiders at six of the Magnificent 7 stocks have sold more shares than they bought, and those at four of them — Amazon (NASDAQ:AMZN | AMZN Price Prediction), Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA) — haven’t purchased any shares in over two years, despite the pullback in their stock prices.
Smart investors should still examine revenue growth, earnings quality, free cash flow generation, valuation multiples, competitive positioning, and balance sheet strength before committing capital. Comparing those metrics against industry peers remains just as important as following insider transactions.
Key Takeaway In short, Peter Lynch’s famous insider-buying principle is providing one encouraging signal for technology investors. Executives are voluntarily investing their own money through open-market purchases at a pace not seen in about 15 years, suggesting they believe current valuations underestimate future prospects. That does not guarantee technology stocks are about to rally, nor does it make every company an automatic buy. But it gives retail investors a valuable starting point for deeper due diligence.
When the people running these businesses begin buying alongside shareholders instead of simply collecting stock awards, history suggests they’re sending a signal worth paying attention to.
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Nvidia stock NVDA traded higher on Friday as investors looked past reports that one of the company's largest customers is stepping up development of its own artificial intelligence processors.
The stock was up about 2.3% at around $207 at the time of writing after trading lower in premarket activity.
The latest development came after Reuters reported that Meta Platforms plans to begin manufacturing a new in-house artificial intelligence chip from September, citing an internal company memo.
The processor, code-named "Iris," forms part of Meta's multi-generation Meta Training and Inference Accelerators (MTIA) program and is intended to support the artificial intelligence systems powering Facebook and Instagram.
According to Reuters, testing of the chip took six weeks and uncovered no major issues, marking progress for an initiative that has faced challenges since it began more than five years ago.
The report said Meta is working with Broadcom on the chip's design, while Taiwan Semiconductor Manufacturing Co. will manufacture the processors.
Meta's goal is to lower its computing costs and reduce dependence on third-party chip suppliers by using silicon tailored to its own workloads.
However, Reuters reported that the new chip is intended to augment, rather than replace, the large volumes of graphics processing units Meta continues to purchase from Nvidia and Advanced Micro Devices.
Meta has previously introduced several generations of MTIA chips and has said they could eventually replace GPUs in some servers while expanding into AI training workloads.
To date, custom chips have primarily been used for inference, the process of generating responses from trained AI models.
The report represents another example of a broader trend across the artificial intelligence industry, where major technology companies are increasingly investing in custom silicon to optimize performance and reduce infrastructure costs.
While those efforts have raised concerns about Nvidia's long-term market share, custom processors have so far complemented rather than displaced the company's graphics processors in many large-scale AI deployments.
Nvidia continues to dominate the market for AI accelerators, particularly for training frontier models, even as hyperscalers pursue greater control over portions of their computing infrastructure.
Wall Street remains constructiveMorgan Stanley reiterated its Overweight rating and $288 price target on Nvidia following the company's recent non-deal roadshow with senior executives.
The investment bank said Nvidia conveyed confidence in an accelerating and increasingly diversified growth story that could appeal to both growth- and value-oriented investors.
Morgan Stanley also maintained Nvidia as its top pick within the semiconductor sector.
Earlier this week, TD Cowen reaffirmed its Buy rating and $275 price target after meeting with Chief Executive Officer Jensen Huang, Chief Financial Officer Colette Kress, and Head of Investor Relations Toshiya Hari.
According to the brokerage, Nvidia executives said demand for AI computing infrastructure remains strong, pointing to constrained compute availability, rising rental prices for legacy GPUs, expanding enterprise AI adoption, and cloud agreements signed at premium pricing.
Nvidia (NVDA +3.56%) has shed an astounding $800 billion in market cap since it hit its all-time high in mid-May. The company, while still worth close to $5 trillion, is back down to valuation levels relative to trailing earnings that it hasn't seen since 2019. At one point during the decline, Nvidia was trading at about 18 times forward earnings, but the price has rebounded slightly since then. As of the close Thursday, its forward P/E was 22.6 -- unusually cheap for the chipmaker.
Investors should take advantage of the dip. The sell-off more closely resembles a sector rotation than a red-flag warning about Nvidia's business, as other semiconductor companies also were hit hard recently.
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There's a lot to love about Nvidia right now. Management's decision to substantially increase the company's dividend, paired with the announcement of an additional $80 billion buyback program, suggests Nvidia believes that rewarding shareholders with income, not just growth, is important at this stage.
Nvidia maintains market-share dominance, holding 97% of the server graphics processing unit (GPU) market for artificial intelligence chips as of the end of 2025, according to Bloomberg Intelligence. The company reported record revenue of $81.6 billion just this past quarter, an 85% increase from the prior-year period. Data center revenue jumped 92%. This is not a company on the decline.
Image source: The Motley Fool.
Competition and pressure on margins from rising costs are concerns, but those issues are not unique to Nvidia.
Though the stock has taken a precipitous fall from its all-time high over the past month, Nvidia's business fundamentals don't just remain intact -- they are continuing to improve. Investors should not panic, but should instead view this dip as a chance to buy a "Magnificent Seven" stock at a great price for a promising long haul.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) told investors to expect $91.0 billion in revenue for the second quarter of fiscal 2027, plus or minus 2%. That figure is guidance, not a reported result, and it excludes any Data Center compute revenue from China.
Now, this figure is significantly higher than the $81.61 billion the company just delivered in Q1 FY27, which itself was up 85.2% year over year and topped consensus expectations. For a company already generating roughly a quarter-trillion dollars of trailing revenue, the guide implies sequential acceleration on a base that most industries could not reach in a decade.
What It Means Break the Q1 result apart and the story sharpens. Data Center revenue landed at $75.25 billion, up 92% year over year. Inside that, Data Center Networking pulled in $14.8 billion, up 199%, as InfiniBand, NVLink, and Spectrum-X demand tripled. Non-GAAP gross margin printed at 75.0%, and net income reached $58.32 billion, up 210.63%. Perhaps most importantly, free cash flow (what the market is growing increasingly concerned with) came in at $48.55 billion. The company has now beaten consensus EPS four quarters in a row, most recently with $1.87 versus a $1.77 estimate.
This $91 billion guide carries additional weight because it is stated to exclude Chinese Data Center compute revenue. NVIDIA shipped no H20 units to China in the quarter, versus $4.6 billion in the year-ago period. Whatever comes back from that market is upside optionality on top of the guide, not baked in. Supporting that outlook is a stated $119.0 billion in total supply-related commitments and $30.0 billion in multi-year cloud service commitments.
Market Reaction NVDA stock closed at $194.83 on July 2, 2026. Over the past week, shares are down 0.46%, and over the past month down 12.46%, moving from $222.57 on June 2 to the current level. Year to date, the stock is up 4.59%, and one-year performance stands at up 24.06%. On the day the Q1 FY27 report hit, May 20, 2026, shares were at $221.54.
Bull Case The bull case for Nvidia starts with acceleration on a base that was already very large. The AI giant grew its revenue in Q1 by 85.2%, and the Q2 guide points higher in absolute dollars. Networking growth of 199% shows the buildout extending beyond GPUs into the interconnect fabric that ties them together. These numbers were driven by an absolutely incredible gross margin of 75% with Q2 guidance holding at 75% plus or minus 50 basis points, given strong pricing power as Blackwell ramps.
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Capital return has changed investors’ perspective on NVDA stock, in my view. The company’s board approved a new $80.0 billion share repurchase authorization in May 2026 on top of $38.5 billion remaining under the prior program, with roughly $20.0 billion was returned in Q1 alone. Nvidia’s quarterly dividend was raised from $0.01 to $0.25 per share, declared May 18, 2026 and paid June 26, 2026. Analyst consensus target price sits at $301.62, with 10 Strong Buy and 48 Buy ratings against 2 Hold and 1 Sell. Forward P/E is 23, which is 30 on a trailing basis.
CEO Jensen Huang framed the setup on the earnings call: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.” He added that “Agentic AI has arrived, doing productive work, generating real value and scaling rapidly across companies and industries.” Partnerships announced or expanded in the quarter include Google Cloud on Vera Rubin A5X instances, Marvell on NVLink Fusion, Coherent, Corning, and Lumentum on optics, plus automotive tie-ins with Hyundai, Kia, Uber, BYD, Geely, and Nissan, and telecom collaboration with T-Mobile and Nokia on AI-RAN and 6G.
Risks aren’t to be ignored, however. Nvidia’s Q2 guide already excludes China Data Center compute, a substantial Q2 cash tax increase is expected, consumer PC demand is softer, and third-party manufacturing reliance concentrates supply chain risk. None of those items alter the anchor, that the company is guiding to $91.0 billion in a single quarter, with China stripped out.
Bottom Line For long-term holders, the $91 billion guide is the number that keeps the AI infrastructure thesis intact on hard math rather than narrative. Data Center growth of 92%, Networking growth of 199%, gross margin at 75.0%, and a new $80.0 billion buyback authorization together describe a business compounding at scale while returning cash.
The next reported result will test whether that guide holds. Until then, the number on the page is the story.
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Over the past few years, mega-cap technology stocks have dominated the headlines, and for good reason. The performance of companies like Nvidia (NVDA 0.62%) and Alphabet (GOOGL 0.91%)(GOOG 0.73%) has made owning anything other than the Magnificent Seven feel like a mistake.
Small-cap stocks, especially those outside of the technology sector, have underperformed for years. However, the tide seems to be turning. So far in 2026, small-caps are outperforming the S&P 500 by the widest margin in over two decades, and this could be just the beginning of a longer trend.
Image source: Getty Images.
One low-cost ETF that investors might want to take a closer look at is the Vanguard Small-Cap Value ETF (VBR +0.95%), which holds 835 smaller companies, most of which have below-average price-to-book and price-to-earnings ratios relative to peers.
The Vanguard Small-Cap Value ETF The Vanguard Small-Cap Value ETF is an index fund that tracks a diversified index of smaller companies with value characteristics. As mentioned earlier, it owns 835 different stocks with a median market cap of about $10 billion.
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On average, stocks held by this index fund have a price-to-earnings ratio of 17.8, compared with 28.1 for the S&P 500 index. As you might expect from a value stock fund, the Vanguard Small-Cap Value ETF is light on technology, but has large concentrations in industrials, financials, and consumer discretionary stocks. To name a few, the fund's larger holdings include NRG Energy (NRG +2.18%), Williams-Sonoma (WSM +0.76%), and Alcoa (AA +0.43%).
Although this is a weighted index fund, no single stock accounts for more than 1.25% of the fund's assets. And like most Vanguard ETFs, the Vanguard Small-Cap Value ETF has a low expense ratio (0.05%). These are the annual investment fees, which will be reflected in the fund's performance over time.
Still a good value As I said earlier, small-cap stocks have outperformed this year, and the Vanguard Small-Cap Value ETF is up about 13% so far in 2026. But there is still a significant valuation gap between large-cap and small-cap stocks, and there could still be plenty of upside potential ahead.
For one thing, value stocks tend to benefit most from interest rate cuts, as they tend to carry more floating-rate debt than their large-cap counterparts. We're still in a relatively high-rate environment, plus small-cap stocks still trade at a significant discount to their historical average P/E ratios.
To be clear, I'm not saying I expect rates to fall right away or that the valuation gap between small- and large-cap stocks to close right away. But over the next several years, factors like these could lead to continued outperformance.
Matt Frankel, CFP® has positions in Vanguard Small-Cap Value ETF. The Motley Fool has positions in and recommends Alphabet, NRG Energy, Nvidia, and Williams-Sonoma. The Motley Fool has a disclosure policy.
Duke University professor Miroslav Pajic recently demonstrated how brittle the sensors underneath America’s self-driving fleet are. In one attack, malware embedded in a lidar unit conjured a person in the sensor’s point cloud who was not physically present. In a second, a real physical obstacle was made to vanish entirely from the sensor output. Pajic told CNBC it is “easy to physically spoof lidar,” warning that malware inserted at the factory or via firmware updates can stay dormant until triggered, and that automakers usually cannot audit a lidar maker’s proprietary source code.
The company at the center of that risk is Hesai Group (NASDAQ:HSAI), a Shanghai-based lidar maker that commands roughly one-third of worldwide automotive lidar sales. The Pentagon blacklisted Hesai as a Chinese military entity in 2024, a designation that prohibits Pentagon contracts but does not ban commercial sales to US autonomous platforms. Hesai sensors are already inside Amazon’s Zoox robotaxis, trucking firms Waabi and Kodiak, AV company Nuro, and Agtonomy, and they monitor passenger and traffic flow at New York’s JFK Airport security checkpoints.
NVIDIA Doubles Down NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) selected Hesai as a lidar option for DRIVE Hyperion 10, its reference architecture for Level 4 autonomy, at CES in January 2026. In March, Hesai joined the Nvidia Halos AI Systems Inspection Lab, the first ANSI-accredited inspection lab for AI-driven physical systems. Jensen Huang framed the ambition simply: “Our vision is that some day, every single car, every single truck will be autonomous.” NVIDIA’s automotive revenue for fiscal year 2026 was up 39% year over year. Asked about security concerns, NVIDIA described Hyperion as an “open architecture” operating “in compliance with applicable regulations,” and did not address the exploit risk directly.
The National Security Case Craig Singleton of the Foundation for Defense of Democracies told CNBC that Chinese law gives Beijing authority to demand companies like Hesai hand over whatever data they possess, making the sensors both an attack vector and a data-collection risk. At a Senate Commerce Committee hearing on February 4, 2026, Sen. Bernie Moreno pressed Waymo’s chief safety officer, who acknowledged Chinese-made components are present in the vehicles.
Hesai’s Defense CEO David Li rejected the framing: “In the DOD case, I don’t feel there is sufficient evidence, and it’s not logical.” Li argues Hesai’s sensors have no onboard storage, that any data belongs to the partner, and that Hesai’s firmware is publicly available for outside scrutiny. Hesai reported Q1 2026 revenue of $98.66 million and holds a 55% market share in China’s long-range automotive lidar market.
Investor Exposure HSAI carries the most direct risk: shares are down 27.9% year to date to $16.15, and forced removal from US AV platforms would be existential. NVDA faces near-term supply-chain and reputational risk if regulators close the commercial-sales gap. Non-Chinese alternatives Luminar Technologies (NASDAQ:LAZR) and Innoviz Technologies (NASDAQ:INVZ), the latter trading at $0.69, would benefit from any mandated fleet-wide swap, though both are financially fragile today.
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The sheer amount of capital expenditures (capex) spending on artificial intelligence (AI) has made investors nervous. So high is the spending that cash-rich companies such as Amazon will spend $200 billion in capex this year alone and have issued bonds to help cover the costs.
Understandably, this makes investors nervous, as a poorly conceived AI strategy could cost even the most stable tech companies massive amounts of cash. Fortunately, three megatech companies continue to stand out as being less risky, meaning the tech stocks can likely prosper in nearly any circumstance.
Image source: Getty Images.
Nvidia As the leading designer of AI accelerators, Nvidia (NVDA +2.55%) continues to stand out. Companies wanting to build AI infrastructure most often turn to this company, and despite its massive size, it continues to grow at a rapid rate.
In this case, it is one of the few major tech companies not spending heavily on capex. In the first quarter of fiscal 2027 (ended April 26), it spent just over $1.75 billion in capex and about $6 billion in the previous fiscal year, a tiny fraction of what Amazon spends.
Amid that effort, it reported an 85% increase in revenue from year-ago levels. Also, the 65% increase in fiscal 2026 shows this growth is not a one-time event.
Admittedly, its $4.7 trillion market cap may deter some investors, knowing that it is likely no longer a millionaire maker at this stage of its development.
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Still, its growth has left it with around $80 billion in liquidity, giving Nvidia one of the market's more stable balance sheets. Also, its price-to-earnings (P/E) ratio is 30, and the company's revenue growth may keep that earnings multiple from falling considerably further. This makes it less likely that any worst-case scenario is going to undermine Nvidia stock.
Microsoft Microsoft (MSFT +0.06%) has been this year's worst performer in the "Magnificent Seven," falling by more than 20% in 2026. Its $80 billion in capex for the first nine months of fiscal 2026 (ended March 31) is not quite at Amazon's level, but it has caused concerns given the performance of its AI assistant Copilot relative to competing products.
Also, while Microsoft has attempted to restructure lower-performing business units such as Xbox, investors are unlikely to react, as the largest tech names tend to trade on AI-related accomplishments in today's market.
However, despite the negative sentiment, Microsoft's numbers show it is holding its own in the AI industry. Overall revenue growth was 18% for the first three quarters of fiscal 2026, and this includes a 27% increase for Microsoft Cloud, which makes up the majority of the company's revenue.
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Also, the falling stock price has made its valuation more attractive. Its P/E ratio of 23 has just begun to come off multiyear lows.
Considering its revenue growth, particularly on the cloud side of the business, Microsoft stock appears cheap, pricing in the possible negative sentiment that could come from an AI downturn. Additionally, should Microsoft close some of its competitive gap in AI, the current valuation could set the stock up for a dramatic recovery.
Meta Platforms Meta Platforms (META +6.55%) is another big spender as it seeks to prove itself in the AI realm. It pledged to spend between $125 billion and $145 billion in capex this year to become a more AI-oriented company.
That move is arguably necessary as the company boasts 3.56 billion daily active users for its family of apps. This amounts to a large percentage of the world's population, meaning user growth has slowed dramatically. Fortunately, it also holds massive amounts of data not held by its peers, meaning it could build a competitive advantage by using that data to train AI models.
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Moreover, the company is making this move while advertising makes up nearly 98% of its revenue, buying it time for a transition. Also, revenue grew at 33% in Q1 and 22% in 2025, meaning it still drives considerable growth from its current business model.
Despite that rapid growth, its P/E ratio is only around 22, indicating it has not yet convinced investors that this transformation will succeed. However, with its current level of revenue growth, that earnings multiple should limit the downside in the stock, positioning the company to weather downturns and earn higher returns as its AI strategy gains more traction.
Taiwanese chip-testing company King Yuan Electronics (KYEC) plans to invest up to $1.4 billion to establish a facility in the United States, the supplier to chipmaker Nvidia said on Friday.
During a July 10 CNBC segment, Kristina Partsinevelos framed SK Hynix’s roughly $26.5 billion capital raise at $149 per American depositary share as a defining moment for the AI supply chain. The Korean memory giant controls approximately 58% of the high-bandwidth memory market, giving it a commanding position in the technology required to make NVIDIA’s most advanced chips work. The offering ranks as the second-largest share sale ever, trailing only SpaceX’s NASDAQ debut last month.
For U.S. investors, the debut closes a long-standing accessibility gap. SK Hynix has been the essential HBM supplier to NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) throughout the AI buildout, yet trading in the Korean parent required navigating Seoul-listed shares. It also arrives as Nvidia CEO Jensen Huang’s “largest infrastructure expansion in human history” creates extraordinary demand for a product that remains in short supply.
SK Hynix Controls the Memory Powering the AI Revolution The core setup for SK Hynix, according to Partsinevelos: “SK Hynix is the world leader in high bandwidth memory. The memory that feeds AI chips with roughly 58% of that market. Micron and Samsung competitors split roughly 21% each… as per Counterpoint Research.” She added a blunter framing of the competitive stack: “SK Hynix is bigger, cheaper and closer to NVIDIA.”
Partsinevelos noted revenue is expected to triple to $235 billion this year, with the company committing over $720 billion in capital investment over the coming years, primarily in South Korea. A separate roughly $458 million from the U.S. CHIPS Act is earmarked for an Indiana advanced packaging facility.
New Supply Will Likely Not Arrive Until 2027 Memory prices have been incredibly strong due to tight supply. “None of that supply, though, arrives before late 2027, which keeps the memory shortage going and record-high prices intact for now,” Partsinevelos said. Passive flows may amplify the near-term move: “Berkeley estimates the stock could see up to roughly $14 billion in passive buying alone as it enters the major indices just over the next few months.”
Readers looking for the broader thesis on companies riding this wave can dig into our Free Report: 7 Stocks Powering the AI Boom (That Aren’t Chipmakers).
Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.
Micron Shows How Valuable AI Memory Has Become SK Hynix’s U.S.-listed challenger, Micron Technology (NASDAQ:MU), shows why memory investors are watching HBM share so closely. Micron posted Q3 FY2026 revenue of $41.456 billion, up 345.7% year over year, with non-GAAP diluted EPS of $25.11 and GAAP gross margin of 84.6%. Guidance for the following quarter calls for revenue of $50.0 billion plus or minus $1.0 billion. CEO Sanjay Mehrotra said in the Q3 release that results “reflect the strategic value of memory in the AI era.”
Micron’s HBM4, built on 1-beta DRAM, is in high-volume shipments for its lead customer platform, and HBM4E is in development, with volume production expected in calendar 2027. Shares closed at $991.64 on July 9, up 247.66% year to date. Analysts maintain a consensus price target of $1,486, with the stock currently sporting a forward P/E of about 6.
NVIDIA’s Growth Is Creating an Unprecedented Demand Signal On the demand side, NVIDIA reported Q1 FY2027 revenue of $81.62 billion, up 85.2% year over year, with Data Center revenue of $75.25 billion and total supply-related commitments of $119.0 billion. Shares closed at $202.78 on July 9. Every one of Nvidia’s Blackwell and Vera Rubin systems requires HBM stacks supplied at scale by SK Hynix today.
The Long-Term Warning SK Hynix’s U.S. debut gives investors direct access to the company holding the strongest position in one of the AI buildout’s tightest bottlenecks. It controls roughly 58% of the HBM market, and new capacity will not materially alleviate the shortage before late 2027.
Partsinevelos closed with the industry’s most durable caveat: “The longer term risk, though, is that memory has never really met a supercycle that didn’t eventually crash.” History is unambiguous on that point. For now, the memory shortage is likely to persist into 2027, index inclusion should act as a mechanical bid for the stock, and the three players controlling roughly 95% of memory production remain in a pricing environment they have not enjoyed in over a decade.
Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.
Nvidia (NVDA - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this maker of graphics chips for gaming and artificial intelligence have returned -1%, compared to the Zacks S&P 500 composite's +2.2% change. During this period, the Zacks Semiconductor - General industry, which Nvidia falls in, has lost 1.5%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Nvidia is expected to post earnings of $2.08 per share for the current quarter, representing a year-over-year change of +98.1%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
For the current fiscal year, the consensus earnings estimate of $9.09 points to a change of +90.6% from the prior year. Over the last 30 days, this estimate has changed +1.1%.
For the next fiscal year, the consensus earnings estimate of $12.32 indicates a change of +35.6% from what Nvidia is expected to report a year ago. Over the past month, the estimate has changed +1.5%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Nvidia is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Nvidia, the consensus sales estimate for the current quarter of $91.58 billion indicates a year-over-year change of +95.9%. For the current and next fiscal years, $385.48 billion and $521.8 billion estimates indicate +78.5% and +35.4% changes, respectively.
Last Reported Results and Surprise HistoryNvidia reported revenues of $81.62 billion in the last reported quarter, representing a year-over-year change of +85.2%. EPS of $1.87 for the same period compares with $0.81 a year ago.
Compared to the Zacks Consensus Estimate of $78.75 billion, the reported revenues represent a surprise of +3.63%. The EPS surprise was +5.65%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Nvidia is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Nvidia. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
President Donald Trump is in the news for what may be an unexpected reason. A CNBC analysis of the president's most recent financial disclosures shows that Trump made 327 stock purchases on April 8, 2025.
If that date doesn't ring a bell, here's a refresher -- the very next day, Trump posted on his Truth Social account that it was a "GREAT TIME TO BUY!!!" and then announced a partial rollback in his "Liberation Day" tariffs that caused the market to jump 9.5% in a day.
There's a lot of discussion among experts about the ethics of Trump's trades, and the White House maintains that the president's investment accounts are managed by professionals who are not in regular communication with Trump. I'm not going to try to parse the legalities that are being debated on public airwaves and in Washington. However, I do think it's worthwhile to look at five megacap tech stocks that were central to Trump's April 2025 buying spree -- Apple (AAPL +0.85%), Amazon (AMZN +1.38%), Alphabet (GOOG 0.69%) (GOOGL 0.90%) Microsoft (MSFT +0.19%), and Nvidia (NVDA 0.62%) -- and see how they've performed since that date.
Image source: Getty Images.
What do these stocks have in common? Apple, Amazon, Alphabet, Microsoft, and Nvidia are all part of the "Magnificent Seven" group of stocks that have been primary drivers in the market for the last several years. The five companies have been closely followed as the appetite for artificial intelligence and AI-powered platforms remakes the market.
AAPL data by YCharts
Nvidia, which makes the most popular semiconductor chips used in AI training and inference, has had the most success in the last three years, gaining more than 360% over that period. Nvidia now has a market cap of more than $4.5 trillion, making it the biggest company in the world by market capitalization.
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Amazon, Microsoft, and Alphabet are hyperscalers, meaning they operate large cloud computing operations that offer cloud, networking, and storage services. Cloud operators have become even more necessary in the age of AI because it's extremely expensive for companies to build their own AI-capable networking and storage systems in-house. Amazon has the largest share in the global market, at 28%, while Microsoft is No. 2 at 21%, and Alphabet's Google Cloud is third with 14% share.
Apple is more of an outlier -- it doesn't make chips, and it hasn't shown any interest in being a hyperscaler. Instead, it focuses on incorporating AI technology -- which it calls Apple Intelligence -- directly into its products. It recently announced a revamped version of its Siri personal assistant, Siri AI, which is being rolled out this year. Siri AI will be able to answer questions about content on users' screens, conduct searches, and get real-time information from websites.
How are these stocks performing? While we don't know how much Trump bought in Apple, Amazon, Alphabet, Microsoft, and Nvidia stocks, we do know all the purchases were between $100,000 and $250,000. So let's split the difference for the sake of comparison and say he spent $175,000 on each stock on April 8, 2025, and held his positions through today.
AAPL data by YCharts
Alphabet, which has seen a resurgence over the last year, is the biggest winner, turning a hypothetical $175,000 investment into $438,410. But all five investments come out in the black -- even Microsoft stock, which gained only 8% in the last 15 months.
In all, Trump's hypothetical $875,000 investment would have turned into $1.58 million, a gain of 76% on those five trades.
SummaryGaming and Leisure Properties is upgraded to 'Strong Buy' due to discounted valuation and robust income growth prospects.GLPI trades at 10.5x forward P/FFO with a 7.6% yield, well below its historical average, offering attractive entry for income-focused investors.A $1.8 billion investment pipeline and contractual rent escalators provide clear visibility into AFFO growth through 2027.GLPI's strong balance sheet, prudent underwriting, and rising dividend support the thesis for double-digit annualized total returns.Looking for a portfolio of ideas like this one? Members of iREIT®+HOYA Capital get exclusive access to our subscriber-only portfolios. Learn More » z1b/iStock via Getty Images
Most people have heard of the expression that “cash is king.” I would, however, modify that expression to be “cash flow is king.” That’s because having strong cash flow can protect the investor from the hidden dangers of inflation, which is like
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Gale CEO Rahul Gudise. Velocity Incubator My philosophy about luck is that it's really about how many times you're willing to flip the coin. At some point, it stops being luck and turns into inevitability.
While studying at the University of Waterloo, I treated applying to internships like a statistical game.
Working my way through a GitHub list of openings, I sent out 200-300 applications before landing an internship at Tesla. The next recruiting cycle, I did it all over again to land one at Nvidia. I honestly don't even remember applying.
After the initial callback, the hiring process was pretty chill. I had two interviews before Nvidia told me I got the job, and all in all, it took about four days. It helped that my background in high-performance software happened to fit what the data center tooling team needed.
The role was a little atypical because I worked out of the Redmond, Washington, office rather than Nvidia's Santa Clara headquarters, where most interns are based. The community felt smaller, but I had great mentors, and the work-life balance was reasonable. Sometimes you would work overtime, but most people worked pretty normal 9-to-5 hours.
What surprised me most was how passionate everyone was. The engineers didn't treat their work as just a job — they treated it like a craft, and genuinely cared about building great software.
The greatest gift Nvidia gave meI came into the internship wanting to be a full-time Nvidia employee. I thought that the money you could make in Big Tech would bring a sense of freedom.
But ultimately, being a small part of a larger organization felt unfulfilling. The greatest gift the experience gave me was teaching me what I wanted to do with my time — to build something of my own.
I also thought I'd become a better engineer by starting a company. At a startup, you have to understand the problem before you can build the solution, whereas in Big Tech, you're often working within a much narrower sandbox.
I launched an AI startup called GaleI cofounded Gale, an AI startup that automates work visa applications, after my Nvidia internship ended and while I was still finishing school. We were accepted into Y Combinator and raised $2.7 million in seed funding last May.
My parents initially worried I was walking away from a stable career. But seeing Gale gain traction has changed their perspective.
And when we got our first customer, realizing something I'd built with my own hands could be genuinely useful to someone was one of the best feelings I've ever had.
Nvidia's culture has also shaped who I am as a founder. At Nvidia, mistakes weren't about blame. Managers would work with us to improve processes together so that the same problems wouldn't happen again. That mindset of learning and iterating, instead of pointing fingers, is something I've tried to bring to Gale.
Do you have a story to share about Nvidia? Contact this reporter at [email protected].
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Geoff Weiss You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Geoff Weiss is a senior reporter on Business Insider’s tech team, where he writes about AI startups and Y Combinator, the intersection of AI and the media industry, and workplace dynamics within top AI labs and chip companies.Previously, Geoff was on the media desk, covering YouTube and Netflix, and themes like the intersection of Hollywood and the creator economy. His work on Netflix’s video podcasting ambitions and Mr Beast’s lessons for Hollywood won second and first prize, respectively, at the 2025 LA Press Club Awards.Prior to joining Business Insider, Geoff was the senior editor of Tubefilter and a staff writer at Entrepreneur. He graduated from New York University with a degree in English Literature.He can be reached at [email protected], on Signal @geoffweiss.25, and on LinkedIn. Have a tip? Use a personal email address and a nonwork device; here's our guide to sharing information securely.Selected stories:Nvidia crushed its quarter — and CEO Jensen Huang said in a leaked all-hands that 'the market did not appreciate it'Nvidia will foot the bill for Trump's new visa fees. Here's what CEO Jensen Huang told staff.Massive AI salaries and RTO are fueling a real estate boom in San Francisco: 'It's going to rain money'The AI talent wars are ricocheting across startups. Here's how they're competing with Big Tech.
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Advanced Micro Devices: Steady Revenue TrajectoryAdvanced Micro Devices (AMD +5.71%) primarily generates revenue by developing microprocessors, graphics processing units, and custom system-on-chip products for personal computers, servers, gaming consoles, and embedded systems worldwide.
It recently announced an investment of more than $10 billion to expand packaging capabilities in Taiwan alongside committing up to £2 billion for research in the United Kingdom. It reported 14% net income margin for the quarter ended March 28, 2026.
Nvidia: Rapid Revenue ExpansionNvidia (NVDA 0.62%) earns most of its revenue by providing advanced graphics processors, networking hardware, and computational solutions used across personal computing, professional visualization, automotive platforms, and high-performance data centers.
While launching its Vera Rubin supercomputing platform and authorizing an additional $80 billion for share repurchases, it reported 72% net income margin for the quarter ended April 26, 2026.
Why Revenue Matters for Retail InvestorsRevenue serves as a fundamental indicator of the total money a company brings in from its core operations before any expenses are deducted. This measurement gives retail investors insight into a company’s overall size, market footprint, and long-term trajectory.
Quarter (Period End)Advanced Micro Devices RevenueNvidia RevenueQ3 2024$6.8 billion (period ended Sept. 2024)$30.0 billion (period ended July 2024)Q4 2024$7.7 billion (period ended Dec. 2024)$35.1 billion (period ended Oct. 2024)Q1 2025$7.4 billion (period ended March 2025)$39.3 billion (period ended Jan. 2025)Q2 2025$7.7 billion (period ended June 2025)$44.1 billion (period ended April 2025)Q3 2025$9.2 billion (period ended Sept. 2025)$46.7 billion (period ended July 2025)Q4 2025$10.3 billion (period ended Dec. 2025)$57.0 billion (period ended Oct. 2025)Q1 2026$10.3 billion (period ended March 2026)$68.1 billion (period ended Jan. 2026)Q2 2026Not yet reported$81.6 billion (period ended April 2026)Data source: Company filings. Data as of July 7, 2026.
Foolish TakeThe revenue gap between Nvidia and Advanced Micro Devices, and the former’s consistent quarter-over-quarter sales growth, illustrate Nvidia’s market dominance in high-performance semiconductor products, particularly for the artificial intelligence sector.
While AMD’s first-quarter sales of $10.3 billion represented excellent 38% year-over-year growth, it pales in comparison to Nvidia’s 85% year-over-year increase in its latest fiscal quarter, ended April 26. This significantly higher revenue growth rate underscores the robust demand Nvidia is experiencing for its AI solutions.
Despite what these revenue trends show, AMD’s stock has soared a jaw-dropping 273% over the past 12 months through July 9. Nvidia’s share price was up a mere 23% in that time.
The price-to-sales ratio between this pair of semiconductor giants points to the reason behind the share price disparity. Until its stock began to skyrocket, AMD’s P/S ratio at the end of Q1 was around 10 while Nvidia exceeded 20. This suggests AMD’s stock was a better value, leading to investors scooping up shares.
Moreover, Wall Street now has high expectations for Nvidia. Combined with investor concerns of the company’s dependence on AI spending to deliver outsized result, these factors make it progressively harder for the AI chip leader to achieve spectacular share price gains.
Nvidia (NVDA 0.62%) is at the center of a new catalyst as agentic AI moves deeper into enterprise workflows. The bullish thesis is simple: if AI agents become the next major software wave, Nvidia's GB300 Blackwell Ultra could remain a critical foundation. But the value-capture battle is getting more complicated.
Stock prices used were the market prices of July 3, 2026. The video was published on July 8, 2026.
Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
Elon Musk's space transportation, satellite internet connectivity, and artificial intelligence (AI) company, Space Exploration Technologies (SPCX +2.60%), went public on June 12, and opened that trading session at $150 per share. In the days that followed, the stock soared to an all-time high of $225.64, but it has since plunged back to about $150 as investors grapple with its sky-high valuation.
SpaceX has a market capitalization of $2 trillion as I write this, and with just $19.3 billion in trailing-12-month revenue, that gives it a price-to-sales (P/S) ratio of 103. That's 16 times more expensive than the average for the tech-heavy Nasdaq-100 index. As a result, I won't be surprised if SpaceX declines from here.
If I had $10,000 to invest in one stock for my diversified portfolio, I'd definitely consider an alternative. Here's why Nvidia (NVDA 0.62%) might be a much better buy than SpaceX for the long term.
Image source: Nvidia.
Vera Rubin is in full production Nvidia supplies the world's best graphics processing units (GPUs) for data centers, and its chips are still the main providers of parallel processing power for AI training and inference workloads. The company's dominance in that niche started in 2022 with the H100 GPU, which was built on the Hopper architecture. But in the years since, Nvidia has launched its Blackwell and Blackwell Ultra GPU architectures, the latter of which can deliver up to 50 times better performance than Hopper-based chips in certain configurations.
And the chipmaker just upped the ante again. It has ramped its newest architecture, Vera Rubin, up to full production and will begin shipping them in commercial quantities in the coming months. That new platform includes the Rubin GPU, the Vera central processing unit (CPU), copious memory, and a series of upgraded networking components, which combine to provide another big leap in AI computing performance. In fact, Nvidia says this new architecture will allow developers to train AI models with 75% fewer GPUs, while reducing inference token costs by up to 90% compared to its Blackwell processors.
Inference tokens represent the text, symbols, and images produced by an AI model in response to a query. So to simplify what the company is saying, Vera Rubin will dramatically reduce the cost of using AI software, which could fuel a surge in its adoption. It will also make AI providers like OpenAI and Anthropic more profitable, which could lead to even more demand for Nvidia's chips.
Vera Rubin is almost certain to be Nvidia's most successful product platform ever. According to CEO Jensen Huang, every frontier model company plans to adopt it at launch. That was not the case for Blackwell when it debuted.
Nvidia is on track for another record year Nvidia generated $81.6 billion in revenue during its fiscal 2027 first quarter (which ended April 26), representing year-over-year growth of 85%. Its data center business accounted for $75.2 billion of that total, and it grew at an even faster rate of 92%.
Analysts estimate that Nvidia could generate $392 billion in total revenue during its fiscal 2027, and a whopping $554 billion in its fiscal 2028. If the company continues to grow at this pace, it could be bringing in as much money as Walmart -- the world's biggest retailer -- within a few years.
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However, there are risks ahead. Concerns are mounting about the sustainability of the AI infrastructure boom, as shortages of GPUs and high-bandwidth memory have significantly driven up the cost of building data centers. AI software providers like Anthropic and Microsoft have implemented passive price increases this year in an effort to pass some of those additional costs to their customers -- who have not responded well to the moves.
The chief operating officer at Uber Technologies recently said it's becoming harder to justify AI spending, after his company burned through its entire 2026 AI budget in just four months. It appears he isn't alone, because a recent survey by UBS Group suggests 60% of businesses are now opting for cheaper AI models that use less computing power. That might be bad news for semiconductor demand going forward.
Buyers today are getting a great price for Nvidia stock While there are certainly risks ahead, I would argue that Nvidia's attractive valuation makes those risks worth accepting. The stock is trading at a price-to-earnings (P/E) ratio of 30.2, which is half its 10-year average of 61.6.
It's also cheaper than the Nasdaq-100 index, which has a P/E ratio of 35.2, suggesting the chipmaker is undervalued compared to its big-tech peers.
Looking ahead, the consensus among Wall Street analysts is that Nvidia's earnings will grow to $12.76 in its fiscal 2028, giving its stock a forward P/E ratio of just 15.4.
NVDA PE Ratio data by YCharts.
I'm not suggesting this will happen, but if Wall Street's fiscal 2028 estimate proves to be accurate, Nvidia stock would have to double over the next 18 months just to maintain its current P/E ratio, and quadruple to trade in line with its 10-year average P/E.
Of course, the picture will look very different if the AI industry starts buying fewer GPUs. However, I think Nvidia's valuation leaves quite a bit of room for error -- especially if we're comparing it to SpaceX, which is objectively extremely overvalued right now.
Despite being a key player in the artificial intelligence (AI) space, NVIDIA NVDA is now trading at one of its lowest valuation levels in years, per a Yahoo Finance article. The company's forward price-to-earnings (P/E) ratio has fallen to 22.22x, its lowest level since at least 2019, according to Yahoo Finance AlphaSpace data.
Long the leading light of the industry, Nvidia has had a bad couple of months. Bloomberg has the ugly details, but the upshot is that the company’s stock price has fallen 15% since its peak in May, even as projected revenue continues to grow. Compared with expected earnings, the company is now cheaper than the S&P average; investors are paying less per dollar of Nvidia’s projected profit than they do for the typical large American company.
Money is still flooding into AI infrastructure stocks, but it’s mostly going into memory companies. Over the same period, Micron — one of the world’s largest makers of DRAM, the standard type of memory chip found in computers and servers — has nearly tripled in value, establishing memory as the new bottleneck for data centers and the hot new AI trade. The basic reason is simple: The GPU shortage that looked so alarming last year has eased off a bit. At the same time, data centers need all the memory money can buy.
For anyone who appreciates Nvidia’s technological accomplishments, this can feel a bit deflating. There’s a lot of genuinely impressive technology behind Nvidia’s rise, both in developing CUDA, its widely adopted programming platform that made Nvidia GPUs the default engine for AI research, and in pushing the pace of GPU development to a speed few thought possible. Nvidia’s success is the kind of thing you can write whole books about, and the GPUs themselves are among the most complex devices ever produced, right at the bleeding edge of human capability.
For memory companies like Micron, the story is much simpler. They build high-bandwidth memory chips — specialized components designed to move data in and out of processors as fast as possible — which have been getting incrementally better for 20 years. Without the chips or the companies changing too much, the service they provide suddenly became very valuable — and since demand is growing faster than anyone can scale up supply, they have been able to increase prices tenfold over the past year.
This, via Datatrack, is what the spot price for DRAM — the price buyers pay for chips on the open market, as opposed to long-term contract rates — looks like since 2023:
Image Credits:Datatrack (screenshot) You might think there was some amazing technical breakthrough in the summer of 2025, but no, the industry as a whole just vastly underestimated how much memory it would need for the data center buildout.
In comparison, this (via the compute marketplace Ornn) is how the spot price for an hour of time on an Nvidia H100 GPU has changed over the last year:
Image Credits:Ornn (screenshot) Just like Nvidia’s stock price, there’s a peak in May (around $3.20 an hour) and then a steady drop-off. For better or worse, Nvidia’s value as a company is tied to the price of compute and that price is falling. Micron and its cohort are tied to the price of DRAM, and that price keeps rising.
When I talked to Ornn co-founder and CTO Wayne Nelms about the forces driving that disparity, he framed it as a simple issue of supply and demand. Google, Amazon, Microsoft, and even OpenAI have launched their own custom processors to lessen their dependence on Nvidia; even if those chips aren’t as good as the latest model from Nvidia, they’re good enough to drive down the price of compute.
“More GPU and accelerator players are entering the market. Everyone wants to make their own silicon, but no one is making their own DRAM,” Nelms told me. “Until there’s a major technological breakthrough on HBM [high-bandwidth memory], a shift in supply and demand, or someone new [enters the market in memory], I think things will more or less persist as we see today.”
It’s a frustrating state of affairs for Nvidia, and largely a product of its own success. Having proven how valuable compute can be, the company finds itself at the center of a market everyone wants to be in — while simpler technologies and less interesting companies get rich on the sidelines.
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Russell Brandom has been covering the tech industry since 2012, with a focus on platform policy and emerging technologies. He previously worked at The Verge and Rest of World, and has written for Wired, The Awl and MIT’s Technology Review. He can be reached at [email protected] or on Signal at 412-401-5489.
