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SummaryNvidia Corporation is evolving beyond GPUs, building a diversified AI ecosystem spanning chips, platforms, and software/services.NVDA’s expanding product suite increases TAM, raises switching costs, and strengthens moats, mitigating some competitive risks from hyperscalers.Despite secular AI tailwinds, cyclicality remains a risk, especially if hyperscaler CapEx slows or verticalization accelerates.At 21x forward earnings, NVDA’s valuation appears attractive versus peers, with potential for significant revenue growth and shareholder returns. Robert Way/iStock Editorial via Getty Images

I believe many people in the industry value Nvidia Corporation (NVDA) as if the company were still a GPU company. And as much as this is mostly a truth (yet), this is changing gradually, with the

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Chinese artificial intelligence startup DeepSeek is developing its own semiconductor for AI computing, according to a Reuters report, as the company looks to reduce its dependence on external chip suppliers, including Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) and Huawei.

The chip is being designed primarily for inference workloads, which involve running already-trained AI models to generate responses and complete tasks.

Reuters reported that DeepSeek’s focus on inference reflects growing demand for hardware optimized for deploying AI applications rather than training large language models.

Specialized inference chips can offer lower costs and improved power efficiency compared with traditional graphics processing units (GPUs), making them an increasingly important area of development as AI adoption expands.

According to Reuters, DeepSeek has been working on the chip project for about a year and has held discussions with chip design firms, semiconductor manufacturers and memory suppliers. The company has also begun hiring engineers to support the effort, the report added.

The move comes as Chinese technology companies seek to develop domestic alternatives amid restrictions on access to advanced foreign semiconductors.

After initially falling on the report, shares of Nvidia were little changed at about $195 in the early afternoon on Tuesday.

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Robots on the factory floor. Self-driving vehicles on the Las Vegas strip. Even a substitute for man's best friend — the robotic dog.

They are all part of the physical artificial intelligence buildout that depends on high-tech, low-cost lidar, the critical sensors that allow these technologies to see their surroundings.

And at the heart of this buildout is Hesai Technology, a Shanghai-based lidar manufacturer blacklisted as a national security threat in 2024 by the U.S. Department of Defense, which designated Hesai as a Chinese military entity. While the blacklist prevents Hesai and the 187 other companies and subsidiaries on the list from securing Pentagon contracts, there is nothing illegal about using these products in nonmilitary applications. Hesai's presence on the blacklist does not prevent U.S. companies from using Hesai's technology.

Government officials and security experts say the use of Chinese lidar could open this new, critical infrastructure to cyberthreats with potentially serious consequences and become a backdoor for Beijing to access sensitive data collected by the lidar technology. 

David Li, Hesai's co-founder and CEO, says the narrative that his company poses a threat is fiction.

"In the DOD case, I don't feel there is sufficient evidence, and it's not logical," Li said. "We are frustrated by that."

In his first extended interview about the blacklist designation, Li defended the company against allegations that its technology poses national security risks or could be used by the Chinese government to collect data.

Despite the federal blacklist designation, Hesai's reach is growing. Under an expanded partnership between Hesai and Nvidia, Hesai sensors will be one of the options automakers can choose to integrate into Nvidia's autonomous vehicle platforms, which the chipmaker hopes will power the self-driving vehicle revolution.

"Our vision is that some day, every single car, every single truck will be autonomous. And we have been working towards that future," Nvidia CEO Jensen Huang said in his keynote address at the Consumer Electronics Show in January, when the expanded partnership was announced.

Huang has said that robotics, which includes self-driving cars, is the company's second most important growth category after artificial intelligence. In its latest annual filing, Nvidia reported automotive revenue for fiscal year 2026 was up 39% from a year prior, driven by the adoption of its self-driving platforms. 

Hesai is one of the dominant suppliers in the global autonomous technology ecosystem. Its sensors are integrated into several autonomous systems in addition to Nvidia's, including those of Amazon's robotaxi company, Zoox; autonomous trucking companies such as Waabi and Kodiak; autonomous vehicle technology company Nuro; and agricultural automation firm Agtonomy. The sensors can also be found at New York's John F. Kennedy International Airport, where they monitor passenger and traffic flow at security checkpoints and gate entrances, and even in autonomous lawn mowers.

The threat of weaponizing lidarNot everyone is convinced that these data-collecting sensors should be integrated into U.S. autonomous systems.

Craig Singleton is a senior director for the China Program at the Foundation for Defense of Democracies, a conservative Washington-based think tank known for being critical of the Chinese government. His research has concluded that there are security risks in Chinese-made sensors operating in U.S. systems, including that lidar sensors could enable Beijing "to access sensitive U.S. data or disrupt critical operations."

Lidar — which stands for "light detection and ranging" — works by firing laser pulses and measuring how long it takes for them to bounce off an object and back to the sensors. The sensors then combine thousands of these measurements to create a "point cloud," or three-dimensional map, which allows autonomous machines to see and navigate their surroundings. 

Singleton told CNBC that as Chinese lidar sensors become more prolific across the U.S., they will move closer to defense nodes, utility grids and airports.

"That data is so sensitive and it's so precise that it could be weaponized by a hostile foreign power if they ever wanted to target our infrastructure," Singleton said.

Questions about how and where Chinese-made lidar sensors are being used come alongside broader concerns about Chinese government oversight and the potential for that government to access data collected by Chinese companies.

The U.S. Securities and Exchange Commission requires all China-based companies to disclose "the risk of Chinese government intervention or control." In its SEC filings, Hesai has disclosed that the Chinese government has "significant oversight in regulating our operations and may influence or intervene in our operations at any time." 

Singleton said that in part means Hesai can be compelled to share data collected by its lidar sensors with the Chinese government.

"Whether they want to transmit that information or not isn't a question, it's mandated by law," Singleton said. 

Li said the company's sensors hold no data because they lack the memory capacity to do so. He said Hesai's partners are responsible for securing the data the sensors collect and that Hesai has no control over that. 

Li also rejected concerns that the Chinese government could access data through the company.

But Singleton said the rapid deployment of autonomous systems is outpacing scrutiny over potential security risks.

"It's a tale as old as time with Chinese tech," he said. 

'Rip and replace'Companies in the U.S. have previously embraced low-cost Chinese technology, even from entities that had been blacklisted, only to later spend billions replacing it after the products raised national security concerns.

Chinese telecommunications giant Huawei, for example, was placed on the Defense Department's blacklist in 2021, but that did not stop U.S. companies from using Huawei products. The Federal Communications Commission, which had designated Huawei a "national security threat" in 2020, forced U.S. companies to "rip and replace" Huawei products from their networks beginning in July 2021. Huawei challenged both the decision to bar it from securing federal contracts and FCC's designation of the company as a national security threat in court, but lost both cases. 

Like Huawei, other Chinese companies have been found by the Defense Department to be national security risks only after their products made their way into U.S. homes and businesses.

Shenzhen-based DJI, the world's largest drone maker, and Wi-Fi router maker TP-Link both sold popular consumer goods. DJI was blacklisted in 2022 by the Pentagon for its ties to the Chinese government, and TP-Link was added to the list in June. 

DJI sued the Defense Department in 2024 to be removed from the blacklist, but a federal judge ruled there was "substantial evidence" that the company contributes to China's defense industrial base. DJI is appealing the decision. 

Unlike Hesai, which remains free to sell lidar sensors commercially in the United States, a separate FCC ruling in December banned DJI from selling new products to U.S. consumers due to national security risks, though existing models remain legal to use.  

TP-Link was also barred from selling new models after the FCC determined foreign-made routers posed "an unacceptable risk to the national security of the United States."

Inside a simulated lidar attackNational security concerns surrounding foreign-made lidar sensors have also spurred academic research on the potential risks posed by these devices.

Miroslav Pajic, a professor at Duke University who studies vulnerabilities in lidar sensors, told CNBC it's "easy to physically spoof lidar."

Pajic said any lidar sensor can be compromised with malware inserted at the factory during production or through firmware updates. Malware can be difficult to detect, since automakers and other manufacturers usually cannot access a lidar maker's proprietary source code and malware can remain dormant until triggered. 

Inside his lab at Duke, Pajic demonstrated one such attack. 

On a computer monitor displaying a lidar sensor's point cloud image, the room the sensor was capturing appeared exactly as expected. The sensor mapped its surroundings in real time, creating a 3-D picture of the space. 

But after Pajic activated malware embedded in the lidar unit, a person appeared in the sensor's point cloud. In reality, nobody had entered the room.

The system generated a phantom person — a false object created entirely through manipulated sensor data. 

Pajic's lab has also conducted demonstrations that have the opposite effect: manipulating lidar data to remove real objects from a sensor's view. In that scenario, an autonomous system could fail to detect a pedestrian, vehicle or obstacle that is physically present. 

Pajic said similar attacks could theoretically be used against autonomous vehicle fleets operating in cities, causing them to malfunction.

When asked about the simulation, Li said a system can be designed to be vulnerable in a lab setting. 

But the risk of malfunction isn't just theoretical. 

Michael Robbins, CEO of the Association for Uncrewed Vehicle Systems International — a trade organization that represents companies in the industry, including U.S. lidar competitors — said that in 2024 Hesai pushed a firmware update to all its lidar sensors. The firmware didn't take into account that 2024 was a leap year, so on Feb. 29, all of Hesai's lidar sensors stopped working.

"In that case it was by error, but that could also be done intentionally, where every lidar in use in the United States could be turned off, or it could be used against us in a nefarious way," Robbins said. 

While the potential for a software error across autonomous vehicles is widespread, an error in lidar systems is grave considering its implementation in cars across America.

Li said that in the case of the leap year incident there was an overlooked coding bug in the firmware — not malware. He added that Hesai publishes all its firmware as open source data, so it can be publicly analyzed. In a statement to CNBC, Hesai said the issue was fixed within 24 hours.

"We are making ourselves transparent on what exactly this is able to do," he said.

Li also said autonomous systems are designed with other sensors such as cameras and radar systems that can compensate for lidar failures.

"If any of them stop, the cars will have to reevaluate the situation to know whether it's safe enough to continue the course or we're gonna have to pull over," he said. 

Hesai's sensors have also met the standards set by Tüv Rheinland and Dekra, which are independent third-party companies that specialize in product testing, safety validation and cybersecurity assessments. 

Hesai's U.S. partners Hesai, which is publicly listed on both the Nasdaq and the Hong Kong Stock Exchange, is one of the world's biggest lidar manufacturers. It has one-third of the global automotive lidar market, the company told CNBC in a statement. 

And autonomous driving is projected to become a massive global market. McKinsey & Company estimates the market potential for autonomous driving will be roughly $300 billion to $400 billion by 2035.

Hesai's footprint inside the U.S. autonomous ecosystem has continued to grow.

CNBC reached out to Hesai's U.S. partners about their relationship with the company.

CNBC asked Nvidia more than a dozen questions, including whether it was aware that Hesai had been blacklisted by the Pentagon and what safeguards are in place to protect the data the sensors collect. 

Nvidia did not respond to CNBC's specific questions and instead provided a statement: 

"Automakers worldwide demand an open, vendor-agnostic reference architecture, so they can select components that are best for the markets they serve to build the safest cars. Our NVIDIA DRIVE Hyperion architecture provides that flexibility, ensuring that American industry competes worldwide, consistent with all regulatory and commercial requirements."

In a statement, Kodiak wrote that its technology is designed "so that Hesai does not have access to the data from their sensors or any data produced by Kodiak's autonomous system."

A spokesperson for Waabi wrote that its "autonomous trucks utilize an array of sensors" and that it does not "comment on or disclose specific hardware being tested or used in our autonomous vehicles." The spokesperson added, "We have rigorous data security protocols in place and thoroughly vet all third-party hardware to ensure the absolute integrity and safety of our systems as well as compliance with all applicable laws and regulations."

Agtonomy, Nuro and Zoox did not respond to CNBC's request for comment.

High-tech, low costHesai's expansion has been driven in part by pricing.

Hesai told CNBC it has reduced the cost of its lidar units from more than $10,000 each to less than $200. By comparison, U.S. lidar manufacturer Aeva told CNBC its automotive sensors cost "in the few hundreds of dollars" per unit.

Industry analysts say that the pricing advantage is reshaping the market. A 2025 automotive lidar report by the Yole Group, a global advisory and market analysis firm, said Chinese firms such as Hesai are "dominating due to cost, scale and government support" while Western players "face higher costs and slower adoption."

In a statement to CNBC, Hesai said it's among the first in the industry to mass produce its lidar systems due to its "innovation" and "automotive manufacturing capability."

Critics say those lower prices are only possible because of Chinese government assistance.

"Chinese lidar companies have benefited from massive unfair state subsidies that have allowed them to scale production and control the market," said Singleton, of the Foundation for Defense of Democracies.

Li denied his company receives support from the Chinese government.

"That's an accusation with no evidence," he said. "When you see a player being able to build sensors at a much more affordable level, you just assume that they get help."

According to Hesai's 2025 annual filing with the U.S. SEC, the company received Chinese government subsidies, preferential tax rates of 15% versus the standard 25%, preferential borrowing rates below benchmark, and a tax break that lets it deduct 200% of its research and development costs. 

In a statement to CNBC, Hesai said those programs are not unusual, that "governments worldwide commonly offer tax incentives to technology enterprises as a standard measure to stimulate innovation" and that these incentives are "broadly available to all qualifying companies in China, both domestic and foreign."

Hesai also wrote that "no government organization, including the Chinese government, holds any equity stake in Hesai."

Ties to the Chinese military At the center of Hesai's legal battle with the Pentagon is whether the company contributes to China's military-civil fusion strategy, a national initiative aimed at integrating civilian and military technological development. The Pentagon says Hesai is part of that ecosystem. 

After the Defense Department blacklisted Hesai in January 2024, the company sued the department in federal court over the designation, in May 2024.

In court filings, the Defense Department cited several factors in support of the designation. Among them is that Hesai's Chinese headquarters are in Shanghai's Jiading district, an area associated with military-civil fusion initiatives.

Li rejected that argument. He said a military-civil fusion zone has not been clearly defined and that several of the companies in the area are American companies. 

"For lack of a better analogy, just because the Pentagon is in Virginia, you think that Virginia is a place full of military," Li said. "Anybody operating in the state of Virginia becomes military."

The Pentagon also pointed to supplier relationships between Hesai and China Electronics Technology Group Corporation, or CETC, a state-owned defense conglomerate tied to the People's Liberation Army. In a prospectus Hesai submitted for possible listing on the Shanghai Stock Market, CETC is listed as its third-largest supplier.

Li said none of the parts Hesai purchased from CETC have a military application.  

In court, Hesai also said its sensors are "solely for commercial and civilian uses." 

Li also told CNBC that Hesai's commercial agreement strictly prohibits customers from using its devices in military applications. However, he also said that, like any piece of hardware, once sensors leave the factory, it is impossible to physically control where they end up.

Hesai lost its lawsuit against the Defense Department in 2025 and remains on the blacklist. The company is appealing the decision.

Additional scrutinyBeyond the courtroom, the company is also facing scrutiny from international policy groups. 

In July 2025, the Prague Security Studies Institute — a nonprofit, nongovernmental public policy organization — published a white paper on Hesai. Among the findings: Hesai's lidar sensor appeared on a military vehicle during a 2023 Chinese military television program. The program is called "Land Unmanned Systems Challenge," a Chinese unmanned systems competition hosted by China's Army Equipment Department and organized by a military research institute. 

Chinese defense materials describing the event say its goal is to advance China's military-civil fusion strategy. Participants included military and civilian universities, state-owned enterprises, private companies and research institutes testing unmanned vehicles.

Li confirmed that the sensor that appeared in the footage was Hesai lidar technology but said the company did not supply the sensor for the military competition. 

"We shipped probably hundreds of thousands of lidars like this," Li said. "So, there is a possibility that they end up somewhere that we are completely unaware of in the aftermarket."

Li also said Hesai has no way to communicate with or trace the sensors once they are shipped out, that the sensors send the data to the company using them, not to Hesai. 

Proposed legislation On Capitol Hill, lawmakers are raising alarms about the use of Chinese lidar technology in the United States, warning the sensors could create both cybersecurity and national security risks.

"These sensors and the ability to transmit information is a huge concern," said U.S. Rep. John Moolenaar, R-Mich., chairman of the House Select Committee on the Chinese Communist Party. The committee's website says that it is "committed to working on a bipartisan basis to build consensus on the threat posed by the Chinese Communist Party."

Some of the committee's work has focused on protecting U.S. automakers from Chinese competition.

The committee has proposed legislation that would phase out Chinese-made lidar technology in the United States, arguing that the Chinese Communist Party could otherwise exploit a fast-growing and strategically important industry.

In May, Moolenaar introduced legislation that would ban Chinese vehicles from U.S. roads.

Li said his company's sensors are not capable of storing data and therefore could not transmit information to China. But Moolenaar said he is skeptical of those assurances, arguing that Chinese technology has been known to have back doors.

"We've seen back doors in robots that would transmit information back to these Chinese Communist interests," he said.  

No proposed legislation or existing laws currently prohibit blacklisted Chinese companies from being listed on U.S. stock exchanges or prevent American investors from buying their shares.

Moolenaar said companies focused on growth and shareholder returns may not prioritize national security concerns in the same way policymakers do.

"We need to consider what implications there are when we merge these Chinese technologies with American technologies," he said. "Often legislation takes a while to catch up."

Nvidia Corporation (NASDAQ:NVDA) shares are trading lower following reports suggesting China’s DeepSeek is developing AI chips for inference, which reduces its reliance on the company.

DeepSeek’s Quiet Push Into SemiconductorsIf successful, the move would mark a major strategic shift for DeepSeek — widely regarded as China’s AI champion — and could reduce its reliance on both Nvidia and Huawei chips, which it has historically depended on to train and run its globally popular models.

The Broader ContextDeepSeek would be joining a growing list of AI companies seeking to reduce dependence on Nvidia by developing custom silicon. OpenAI last month unveiled Jalapeño, its first custom inference chip developed with Broadcom, while Anthropic has been weighing building its own chips, Reuters reported in April.

Nvidia Shares FallNVDA Price Action: At the time of publication, Nvidia shares are trading 1.62% lower at $192.39, according to data from Benzinga Pro.

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Our NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) call comes at a moment when the stock has cooled off but the underlying business is still accelerating. The 24/7 Wall St. price target for NVIDIA is $250.31 over the next 12 months, implying 28.47% upside from the $194.83 close on July 2, 2026. Our recommendation is buy with a confidence level we characterize as high at 90%.

24/7 Wall St. Price Target Summary Metric Value Current Price $194.83 24/7 Wall St. Price Target $250.31 Upside 28.47% Recommendation BUY Confidence Level 90% A Pullback Into Blowout Fundamentals NVIDIA shares fell 12.46% over the past month and now trade roughly 28% below the 52-week high of $236.26, even as year-to-date performance stays positive at 4.59% and the one-year return sits at 24.06%.

That derating happened despite Q1 FY2027 results (filed May 20, 2026) that beat on both lines: revenue of $81.615 billion grew 85.23% YoY, and non-GAAP EPS of $1.87 topped estimates by 5.42%. Data Center revenue reached $75.246 billion, up 92% YoY, with networking exploding 199%.

Recent news reinforces the demand backdrop: Foxconn reported a 40% quarterly sales increase on AI server strength, and Microsoft made Anthropic’s Claude generally available in Azure Foundry on GB300 Blackwell Ultra GPUs.

The Case for $260 and Higher The bull scenario in our model targets $260.05, roughly 33.48% above spot. The Street is more aggressive: consensus analyst target sits at $301.62 with 10 Strong Buy and 48 Buy ratings against just 2 Holds and 1 Sell.

Q2 FY2027 guidance calls for revenue of $91 billion with 75% non-GAAP gross margin, and Jensen Huang described the Blackwell and Vera Rubin ramp as “the largest infrastructure expansion in human history”.

Major commitments from OpenAI (10GW), Anthropic (1GW), CoreWeave, and sovereign programs in the UK, Germany, and South Korea add visibility. On 22x forward earnings, the multiple compresses fast if 2027 estimates keep drifting higher.

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The Risks Worth Watching Our bear case lands at $217.64, still positive but far below consensus. CNBC reported on July 5, 2026 that NVIDIA’s Kyber rack system for Rubin Ultra chips has slipped to 2028 due to manufacturing issues, opening a door for AMD and Google. China exposure has effectively gone to zero: guidance excludes any China Data Center compute.

And $119 billion in supply commitments create demand-risk if hyperscaler capex normalizes. Insider activity has skewed toward net selling across 16 recent transactions. That said, bulls would counter that supply commitments reflect confidence in booked orders backed by real demand, and that networking growing at 199% shows full-stack lock-in that is very hard to displace.

The Setup Favors Upside The 24/7 Wall St. price target of $250.31 and a buy rating reflect a business compounding revenue at 85% while trading at 22x forward earnings, with 90% confidence behind the projection.

The setup looks attractive if the Q2 earnings report confirms $91 billion and Blackwell 300 shipments stay ahead of schedule. The setup weakens if the Kyber delay expands into the base Rubin timeline or if hyperscaler capex guidance turns lower. On today’s setup, the risk skews to the upside.

NVIDIA Price Prediction 2026-2030 Year 24/7 Wall St. Price Target 2026 $219.09 2027 $267.34 2028 $324.66 2029 $353.02 2030 $389.92 These projections assume NVIDIA continues executing on its Blackwell and Vera Rubin roadmap. Meaningful upside or downside could come from Chinese market re-entry, a sharper competitive push from AMD and hyperscaler custom silicon, or a change in AI training capex intensity.

Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.

Contact [email protected] for any questions or corrections.

The U.K. artificial-intelligence infrastructure startup said the funds would inject flexible liquidity to accelerate its data-center plans across Europe, the U.S. and the Asia Pacific.

The delay to Nvidia Corp's (NASDAQ:NVDA, XETRA:NVD) Kyber rack tells a bigger story than a single slipped product date.

For three years, the chip designer has shipped a new generation of artificial intelligence hardware every year, a drumbeat that competitors could not match and investors came to price in.

That rhythm has now met the physical limits of what modern manufacturing can deliver.

Kyber, a server cabinet built to pack 144 of Nvidia's most powerful Rubin Ultra processors into a single unit, has slipped by more than 12 months to 2028.

The culprit is unglamorous: a specialised circuit board known as the midplane, which connects the chips so they behave as one giant computer.

At around 78 layers, it ranks among the most complex boards ever attempted for a commercial product, and the engineering has proved harder to tame than the original timeline assumed.

The significance lies in what the board enables.

Density is the whole point of rack-scale design, because training and running the largest AI models demand vast numbers of chips wired together with minimal delay.

Without a proven way to scale up its top-end systems, Nvidia is left with a gap at exactly the level where its advantage was supposed to be widest.

That gap is where rivals now see daylight.

Advanced Micro Devices and Google already win work from leading AI labs with their own accelerators, and a stumble at the high end hands them a rare technical opening rather than a marketing one.

The timing sharpens the point, coming barely three months after the chief executive, Jensen Huang, showcased Kyber on stage.

The knock-on effects compound the problem.

A fallback design that bolted two current-generation racks together has been scrapped after cloud providers rejected it as too costly and operationally awkward.

That cancellation effectively caps how far Nvidia's existing systems can scale until Kyber arrives or another route is found.

A larger configuration linking eight racks through co-packaged optics, a technology that builds optical links directly into chip packages, is now likely to be delayed or restricted to small volumes.

The Rubin Ultra chip itself has been pared back from a four-chip design to a two-chip version, roughly halving what the next generation will offer even once it ships.

Underneath these decisions sits a single dependency: co-packaged optics, whose maturity now governs much of the roadmap.

If that technology takes longer to perfect than hoped, the scaling plans of the entire industry get rewritten, not just Nvidia's.

The company has been hedging accordingly, striking supply agreements with optics specialists to secure the components its future factories will need.

None of this dents the near-term picture, and that distinction matters.

Current Rubin systems are in full production and begin shipping this autumn to eight cloud partners, including Amazon Web Services, Microsoft Azure and Google Cloud.

Demand for existing hardware remains robust, and the research behind the delay reporting still expects Nvidia's data-centre compute revenue to run 20% above Wall Street forecasts in the second half of the 2027 financial year.

The market reaction was felt more keenly down the supply chain, where Asian technology and circuit-board shares slid on the news.

That response captures the real anxiety, which is less about Nvidia's next quarter than about the pace of the AI build-out itself.

For years, the assumption has been that compute would keep getting denser and cheaper on a predictable schedule.

The Kyber delay is the clearest signal yet that the schedule bends to manufacturing reality, and that even the sector's dominant supplier cannot simply will the next leap into being.

Nvidia Corporation faces rising competitive threats from customer-developed ASICs, prompting strategic defensive moves to maintain AI chip dominance. NVDA is locking up TSMC capacity, investing in neoclouds, and launching initiatives like Nemotron and revenue-share agreements to counter customer disintermediation. I see NVDA's business moat as narrowing, justifying a lower multiple versus hyperscalers, but its near-term growth and earnings beat potential remain compelling.

The "Magnificent Seven" stocks are among the most valuable and popular stocks in the world: Apple (AAPL +1.55%), Alphabet (GOOG +2.06%)(GOOGL +1.71%), Amazon, Meta Platforms, Microsoft, Nvidia (NVDA +0.86%), and Tesla. Over the years, they've generated some fantastic returns for investors, perhaps even life-changing gains.

But this year, their gains have been lackluster, and only one of them has even outperformed the S&P 500 (it's up around 9%). Here's a look at the top three stocks in this group as of the halfway point of 2026, and whether they are good buys right now.

Image source: Getty Images.

Apple: up 6% Although a modest single-digit gain may seem modest for this group of stocks, that's enough for a stock like Apple to be among the top three. It was up around 6% as of the end of June, and it's been a better buy than the rest. Investors may have been underwhelmed with its artificial intelligence (AI) strategy, but with its results still looking solid, it remains a popular tech stock to own.

The company has been battling higher costs due to soaring memory and storage prices, but with a customer base that doesn't often balk at paying a premium for products, it may be in better shape than most if it ends up having to raise the prices of its iPhones this year. It has already raised prices on other products, including MacBooks and iPads.

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Although the stock is doing reasonably well this year, its valuation is high, which could limit its gains from here on out. It trades at 37 times its trailing earnings, which can be problematic if its growth rate slows due to higher prices. While it remains an attractive option for the long haul, it could be a challenging road ahead for Apple in the near term.

Nvidia: up 7% The days of chipmaking giant Nvidia delivering massive returns for its shareholders may be over. Up just 7% as of the end of June, Nvidia's gains have been relatively light, even though they've been solid compared to other stocks in the Magnificent Seven.

Nvidia is already the most valuable company in the world with a market cap of $4.7 trillion, so it's not an easy task for it to rise higher. Although its earnings multiple of 30 is lower than Apple's, investors may remain concerned about the market cap and the future expectations that are effectively priced into Nvidia's current valuation.

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However, with the company generating impressive growth of 85% in its most recent quarter (which ended on April 26), its results continue to look stellar. Nvidia's market cap may seem high, but given its high level of growth and strong earnings, it may have more room to rise higher not only in the second half of the year but in the long run.

Alphabet: up 13% The top-performing stock in the Magnificent Seven as of the end of June was Alphabet. At around 13%, its gains weren't huge, but they were enough to make it the best stock in the group and the only one to beat the S&P 500, which was up less than 10%.

The company has proven that it can thrive due to artificial intelligence (AI), as opposed to it proving to be an existential threat to its business. The company's Gemini chatbot is not only proving to be a significant threat to OpenAI's ChatGPT, but may also be in the best position to succeed given the company's deep pockets. Alphabet's business continues to do well, with its advertising and search segments remaining strong despite investors' initial concerns about AI. The company's top line rose by 22% during the first three months of 2026, totaling nearly $110 billion.

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Trading at 27 times its trailing earnings, Alphabet's stock is the cheapest one on this list. It offers good value for investors and could still have more upside this year, given its solid growth and AI opportunities.

Nvidia Corporation remains a Strong Buy, as recent stock weakness is disconnected from operational performance and driven by external sentiment factors. NVDA's Q1 revenue surged 85% YoY to $81.6B, with Data Center revenue up 92% and gross margins holding near 75% despite rapid scaling. Management guides for $91B Q2 revenue, excluding China Data Center compute, and expects stable margins through the next chip transition.

Four years ago, Amazon (AMZN +1.22%) started using its own Trainium AI chips in its cloud infrastructure platform, Amazon Web Services (AWS). Those first-party chips became even more powerful with the launches of the Trainium2 in 2024 and Trainium3 in 2025. That expansion indicated that Amazon wanted to reduce its dependence on Nvidia (NVDA +0.86%), which still provides the majority of its data center GPUs.

Several of Nvidia's other top customers -- including Microsoft (MSFT 1.13%), Alphabet's (GOOG +2.19%) (GOOGL +1.71%) Google, and Meta -- also produced their own AI chips for the same reason. Google and Microsoft even plan to sell their own chips to third-party customers that want to break free from Nvidia's sticky ecosystem.

Image source: Getty Images.

That's why it wasn't surprising when recent reports suggested that Amazon would hop aboard the bandwagon and start selling its Trainium chips to external customers. Could this seismic shift shake up Nvidia's booming data center business?

Nvidia faces long-term threats Amazon's Trainium3 chips can't compete against Nvidia's top-tier Blackwell GPUs on their own. But by densely stacking 144 Trainium3 chips into its UltraServers, Amazon can actually match the rack-scale performance of Nvidia's Blackwell systems at a much lower cost. Microsoft and Google are utilizing that same "system-level stacking" strategy to challenge Nvidia's chips.

Many privacy-oriented markets, such as Europe, want to expand their cloud infrastructure without storing their data on servers operated by American hyperscalers. To solve that, they'll likely purchase more third-party chips from Amazon, Microsoft, and Google to build their own cloud platforms. Other large companies that don't want to rely on those tech giants or become too dependent on Nvidia's chips will likely follow the same playbook.

Today's Change

(

0.86

%) $

1.67

Current Price

$

196.50

But Nvidia still has a wide moat Amazon's sales of third-party AI chips would certainly represent a long-term challenge for Nvidia, but it probably won't meaningfully impact its near-term sales.

Nvidia still locks in its customers with its proprietary software ecosystem, CUDA, and most AI models, libraries, and frameworks are natively optimized to run on its industry-standard GPUs. Many companies that have already invested in Nvidia's ecosystem won't eagerly sever those ties to buy new chips from Amazon, Microsoft, or Google.

For now, Nvidia's investors shouldn't worry too much because the demand for its data center GPUs is still easily outstripping its supply. However, they should still keep a close eye on how its biggest customers are gradually evolving into formidable competitors.

Leo Sun has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

The "Magnificent Seven" cohort is made up of seven of the largest tech stocks in the world. The seven members are (ranked from largest to smallest by market cap):

Nvidia (NVDA +1.13%) Alphabet (GOOG +1.48%) (GOOGL +1.15%) Apple (AAPL +1.08%) Microsoft (MSFT 1.64%) Amazon (AMZN +0.94%) Tesla (TSLA +5.75%) Meta Platforms (META +1.59%) Up until the Space Exploration Technologies, better known as SpaceX, initial public offering (IPO), these seven made up 10 of the largest companies in the world. However, Meta has been pushed out of the top 10 thanks to SpaceX.

These seven companies still hold dominance in the market and control a large amount of the indexes due to market cap weighting. Let's take a look and determine which ones are the best buys and make the most sense to load up on.

Image source: Getty Images.

7. Apple At the bottom of my list is Apple. The reason is quite simple: It's growing its revenue and earnings per share (EPS) somewhat slowly compared to most members, ranking fifth and sixth, respectively, for each company's most recent year over year quarterly results. It's also expensively valued at 35 times forward earnings, Apple isn't cheap and is a major premium over many of its peers.

Today's Change

(

1.08

%) $

3.35

Current Price

$

311.98

Furthermore, Apple's artificial intelligence (AI) strategy so far seems to be lagging behind the competition, which could become a major problem in the future. As a result, I think it's OK to steer clear of the stock.

6. Tesla Tesla is a bit of a wildcard in the Magnificent Seven. All of the other six companies are highly profitable, whereas Tesla doesn't come close.

NVDA Net Income (TTM) data by YCharts.

Tesla has many upcoming opportunities to turn business prospects into profits, but until then, I'm comfortable sitting on the sidelines.

5. Alphabet While Alphabet is only one spot ahead of Tesla, I think there's a huge chasm between the two stocks, and this is where stocks I'd feel comfortable buying today begin. Alphabet has had an incredible year, doubling over the last 12 months. This rise occurred for two reasons: First, Alphabet finally earned the market respect it deserved for its AI plan and execution. Second, Alphabet has been rapidly growing for its size, which contributed to its rise.

However, I think the stock is fully valued now at 25 times forward earnings, and there are better opportunities in the Magnificent Seven.

4. Amazon Amazon may be a bit more expensive at 28 times forward earnings versus Alphabet, but there is more growth coming. Most of Amazon's profits come from its cloud computing service, Amazon Web Services (AWS). This year, it's spending $200 billion on data center capital expenditures (capex) to increase its capacity to meet soaring consumer demand. CEO Andy Jassy told investors that it already has customers lined up to use this new capacity, which will lead to monster growth in the near future.

Today's Change

(

0.94

%) $

2.27

Current Price

$

244.94

This creates an environment where Amazon's profits could soar over the next few years, making it an exciting stock to invest in now.

3. Meta Platforms Meta Platforms is in the top three, and this is where I'd consider the stock a strong buy. The reason is fairly simple: Meta is a solid business, yet it's incredibly cheap. It's the cheapest stock in the Magnificent Seven by far, trading for just 17.5 times forward earnings. That's cheaper than the S&P 500 (^GSPC +0.68%), which trades for 18 times forward earnings.

Despite its low price, Meta is among the fastest-growing, with revenue rising an impressive 33% year over year in the first quarter. I think there's a big price mismatch here, which makes Meta a great stock to buy now.

2. Microsoft Microsoft has had a historical sell-off over the past few months, and it's a likely candidate for a rebound. It's down over 30% from its all-time high, yet its business is doing quite well, with revenue rising 18% and diluted earnings per share increasing 23% year over year.

Today's Change

(

-1.64

%) $

-6.41

Current Price

$

384.08

Despite these strong results, Microsoft trades for just 19 times fiscal year (FY) 2027 earnings (FY 2027 begins on July 1). That's a compelling price to pay for a company widely recognized as one of the AI infrastructure leaders, making it a smart buy today.

1. Nvidia Last, but certainly not least, is Nvidia. Nvidia has been the powerhouse among the Magnificent Seven over the past few years, but it hasn't been so in 2026. The market is worried about AI spending not lasting, but Nvidia told investors that it expects AI hyperscaler spending to rise from $650 billion in 2026 to $1 trillion in 2027. Nvidia is in close contact with these companies to ensure that it has the capacity to meet demand, so it's likely that investors can trust this projection.

Despite obvious growth coming again in 2027, Nvidia trades for 21.7 times forward earnings -- the same price as the S&P 500. That's a steal of a price for Nvidia's stock, and I think it's the most compelling buy of the group as a result.

Corrections present opportunities for investors with extra cash on the sidelines, especially in high-potential industries like technology. These three growth stocks below have all been beaten up in recent weeks but are due for a rebound. Let's dive in and see why.

Image source: Getty Images.

1. Meta Platforms Meta Platforms (META +1.77%) is down by more than 10% from its all-time highs and continues to lag the S&P 500 year to date. It's shocking to see Facebook's parent company underperforming the famed index, but that should change soon.

Fundamentals remain solid, as the company delivered 33% year-over-year revenue growth in Q1, along with a 30% year-over-year boost in net operating income. Meta Platforms has reliably delivered profitable, high growth rates from online advertising, which makes its current 22 P/E ratio look like a steal.

Furthermore, Meta Platforms is diversifying beyond ad revenue, which could boost the stock's valuation. Mark Zuckerberg announced the company is working on an AI cloud business to sell additional compute to AI enterprises and start-ups.

Today's Change

(

1.77

%) $

10.33

Current Price

$

593.23

Neocloud providers have demonstrated that the industry can be lucrative, and it would give Meta Platforms an additional income source. It may take multiple years for this part of the business to generate meaningful revenue, since Meta Platforms is currently constrained by compute capacity.

Recent big deals with neocloud provider Nebius and the fact that Alphabet has limited Meta Platforms' use of its Gemini AI models show short-term limitations. However, Meta Platforms is rapidly building AI data centers that could unlock a new revenue stream within a few years. That, and the company's push into AI glasses, can introduce new, vibrant revenue streams that lead to a rerating.

2. Nvidia Nvidia (NVDA +1.13%) has been at the center of the AI boom as its GPU chips continue to fly off the shelves. Revenue surged 85% year over year in the company's fiscal 2027 first quarter, and its recently announced $80 billion stock buyback program gave investors another reason to be excited.

CEO Jensen Huang even said that the AI build-out "is accelerating at extraordinary speed," suggesting that Nvidia can continue to deliver outsize revenue growth in future quarters. Q2 FY27 guidance projects $91 billion in revenue at the midpoint, which represents 11.5% sequential growth.

Still, the stock is down by almost 20% from its 2026 highs. A 30 P/E ratio makes the stock look quite attractive, and a new announcement sweetened the proposition. Nvidia recently introduced a revenue-sharing model in which AI start-ups can receive free compute in exchange for giving Nvidia exposure to a percentage of their total revenue.

Today's Change

(

1.13

%) $

2.21

Current Price

$

197.04

This type of dealmaking has worked well for Nvidia. It has profitable stakes in many AI stocks, including Intel and Nebius. It can also introduce additional high-growth opportunities for Nvidia, translating into accelerated revenue and net income growth rates.

This opportunity may not be fully reflected in today's stock price, but Nvidia still looked compelling before it announced this new revenue stream.

3. Iren The best investors zig when everyone else zags. Iren (IREN +15.46%) bulls have had to navigate a myriad of short-term obstacles on the way to high annual recurring revenue in the long run.

The optics don't look good in the short run. Iren is flat year to date after shedding more than 30% of its value in a single month. Meanwhile, rival Nebius has more than doubled year to date.

Dilution fears remain, and Iren's co-CEOs recently received $687 million in stock grants. It's good that they can't sell their shares for multiple years, as it gives the CEOs more incentive to grow the company. However, the stock awards divided investors since it comes at a time when dilution and borrowing remain high.

Nebius has also been quicker to announce big deals, including its five-year, $27 billion agreement with Meta Platforms. Iren has been a bit slower on that front, only announcing a five-year, $3.4 billion deal with Nvidia for 60 megawatts of capacity.

Today's Change

(

15.46

%) $

6.00

Current Price

$

44.82

A Nebius-sized deal would quickly change public perception of Iren, and such a deal can be announced out of the blue in a single press release. Iren has enough compute to support that type of deal. It has doubled its gigawatt pipeline year to date and is approaching 6 gigawatts. Expansion into Europe and Australia creates compelling opportunities to quickly scale AI infrastructure.

The moment Iren can convert its gigawatt pipeline into annual recurring revenue, the opportunity will become unmistakable. The company recently raised its annualized revenue run rate from $3.7 billion to $4.4 billion, indicating that growth is underway.

The long-term picture looks extremely promising, but it has a bunch of loud short-term bumps along the way. That setup can be promising for investors who can buy and hold the tech stock for multiple years.

Warren Buffett's retirement as CEO marked the end of an era at Berkshire Hathaway. While Berkshire remains committed to long-term ownership of high-quality compounders, some recent portfolio moves under new leadership suggest that there is a greater comfort with sophisticated, high-growth opportunities that sit at the center of artificial intelligence (AI).

The evidence appears clearly in Berkshire's recent handling of two "Magnificent Seven" stocks. During the third quarter of 2025, Berkshire initiated a stake in Alphabet. During the first quarter of this year, which was Greg Abel's first full quarter as CEO of Berkshire, the company more than tripled its Alphabet position to nearly 54 million shares. At the same time, filings show that Berkshire completely exited its long-standing -- albeit modest -- investment in Amazon.

These moves suggest that Abel is willing to differentiate among mega-cap technology leaders. Such selectivity could open the door to other companies that combine technological leadership with durable competitive advantage. One name that I think increasingly fits Berkshire's investment profile is Nvidia (NVDA +1.13%). Read on to learn why.

Image source: Nvidia.

Nvidia is diversifying its business model It's no secret that Nvidia holds a commanding position in the graphics processing unit (GPU) market over its primary rival, Advanced Micro Devices. Nvidia's CUDA platform has become the de facto standard for AI developers, creating a powerful moat in hardware and software that competitors are struggling to replicate at scale.

Rather than resting on this dominance alone, Nvidia is systematically expanding its ecosystem across the entire AI stack. The company is deepening its involvement in high-performance networking through a combination of internal development and strategic partnerships. For example, in October, Nvidia invested $1 billion into Nokia in a partnership focused on AI-native radio access networks (RAN) and edge infrastructure.

Today's Change

(

1.13

%) $

2.21

Current Price

$

197.04

Nvidia is also quietly supporting data center build-outs through targeted investments in neocloud providers like CoreWeave and optical component leaders such as Coherent and Lumentum. Additionally, Nvidia's NVLink Fusion platform is helping enable new partners like Marvell to develop custom AI chips that can integrate tightly with Nvidia's architecture.

Building a diversified business model reduces Nvidia's reliance on any single data center product while pushing the company closer to the center of the entire AI infrastructure build-out.

Nvidia has strong profitability, robust stock returns, and an attractive valuation Throughout the AI revolution, Nvidia has translated its market leadership into exceptional financial success. Nvidia's revenue and earnings have risen exponentially thanks to AI-driven demand, which has contributed to share price appreciation of more than 1,000% over the last few years.

What's encouraging is that Nvidia has supplemented its strategic investments by expanding its dividend program as well. This demonstrates management's confidence to continue generating robust free cash flow and a willingness to share excess profits with investors.

From a valuation standpoint, Nvidia's forward price-to-earnings (P/E) multiple has become increasingly reasonable relative to its growth prospects. While Nvidia's forward P/E is notably higher than the long-run average S&P 500 forward earnings multiple of roughly 17, Abel has a bigger appetite for premium valuations, as long as they aren't overstretched.

NVDA PE Ratio (Forward) data by YCharts.

Given the trends in the chart above, Nvidia stock is clearly no longer as expensive as it was during earlier phases of the AI cycle. Currently, Nvidia looks more like a value stock -- precisely the kind of business that Berkshire historically seeks out when it identifies a new business capable of compounding capital over the long run.

Nvidia looks like a strong match for Berkshire's investment discipline Berkshire's classic investment criteria -- wide economic moats, strong C-Suite, understandable businesses, and the potential for long-term compounding -- align closely with Nvidia's mold.

The company's brand strength in AI chips and expanding infrastructure ecosystem function as formidable barriers to entry and present high switching costs for its customers. Nvidia's steady diversification into networking and custom-chip architectures also helps give it a more resilient, durable profile compared to pure semiconductor plays.

Under Abel's leadership, Nvidia could emerge as a logical technology investment because it offers exposure to secular AI tailwinds without requiring Berkshire to abandon its preference for steady growth from blue chip businesses. In a portfolio already touching many of the companies shaping the next industrial era, Nvidia represents a compelling candidate for a long-term holding.

Adam Spatacco has positions in Alphabet, Amazon, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Berkshire Hathaway, Coherent, Lumentum, Marvell Technology, and Nvidia. The Motley Fool has a disclosure policy.

AuMEGA Metals Ltd (ASX:AAM, TSX:AUM, OTCQB:AUMMF, FRA:FRA: MA30) has appointed experienced mining executive and geologist Rafael Gradim as president, effective August 1, 2026, as the company advances exploration across its district-scale gold portfolio in Newfoundland and Labrador, Canada.

Michael Skead has stepped down as president, effective immediately, for personal reasons. Gradim will be based in Toronto and will take responsibility for AuMEGA’s exploration activities, including planning, execution and advancement of exploration programs across the company’s land package. 

Gradim brings more than 22 years of experience across exploration, resource development, mine geology, corporate development and mining-focused private equity. AuMEGA said his background gives him a mix of technical expertise, strategic judgement and capital markets perspective. 

He has contributed to the advancement of major gold projects from early-stage exploration through to production and has led technical due diligence on hundreds of mineral assets globally. Before joining AuMEGA, he held senior technical and corporate development roles with Vale Base Metals, Resource Capital Funds, Eldorado Gold and Gold Fields Limited. 

Managing director and CEO Sam Pazuki said Gradim’s exploration leadership and technical depth made him well-suited to lead AuMEGA’s next phase of growth across its Newfoundland portfolio. 

“We are very pleased to welcome Rafael as President of AuMEGA. Rafael brings an exceptional blend of exploration leadership, technical depth and strategic perspective gained across major mining companies, corporate development and in the buy-side. His proven ability to identify overlooked opportunities, assess geological potential and align exploration strategy with shareholder objectives makes him ideally suited to lead our exploration efforts as we advance the next phase of growth across our Newfoundland portfolio.

“I also want to express my sincere appreciation to Mike for the significant impact he has had on AuMEGA. Mike has brought tremendous technical insight and leadership to the organisation, and his contributions have helped strengthen the Company’s exploration platform and strategic direction. I am grateful for the value Mike has brought to the organization and wish him all the very best.”

Newfoundland portfolio in focus Gradim said AuMEGA’s Newfoundland portfolio stood out as a district-scale opportunity with the potential to unlock significant value through disciplined, technically driven exploration. He said the company would focus on prioritising the highest-impact opportunities across the portfolio. 

“I am excited to join AuMEGA at such an important stage in the Company’s development. Over the course of my career, I have had the opportunity to evaluate hundreds of mineral projects globally, and AuMEGA’s Newfoundland portfolio stands out as a district-scale opportunity with tremendous potential to unlock significant value through disciplined, technically driven exploration.

"The company has assembled a highly prospective land package, is supported by one of the strongest shareholder registers in the sector, and benefits from a Board and team with deep exploration, development, capital markets and operating experience. I look forward to working with Sam, the Board and the broader AuMEGA team to prioritize the highest-impact opportunities across the portfolio and help drive the Company’s next phase of growth.”

The appointment comes as AuMEGA continues work across a land package spanning 110 kilometres along the Cape Ray-Valentine Shear Zone, described by the company as Newfoundland’s largest identified gold structure. The zone hosts Equinox Gold (TSX:EQX)’s Valentine Gold Project as well as AuMEGA’s existing mineral resource. 

About AuMEGA Metals AuMEGA Metals is exploring a district-scale gold portfolio in Newfoundland and Labrador, Canada, including ground along the Cape Ray-Valentine Shear Zone and a 27-kilometre stretch of the Hermitage Flexure. 

The company’s Cape Ray Shear Zone hosts several high-potential targets and an existing defined gold mineral resource of 6.2 million tonnes at 2.25 g/t gold for 450,000 ounces in indicated resources, plus 3.4 million tonnes at 1.44 g/t gold for 160,000 ounces in inferred resources.

NVIDIA’s fundamentals have never looked stronger, yet its stock is limping through 2026. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) is up just 3.2% year to date, a striking laggard in a sector where money is flooding into almost everything else. That is the paradox: the company at the center of the AI buildout has become the black sheep of the chip rally.

An uneven rally Advanced Micro Devices (NASDAQ:AMD) has ripped 171.25% year to date. Micron Technology (NASDAQ:MU) is up a stunning 304.62%. Intel (NASDAQ:INTC), still deep in a turnaround under Lip-Bu Tan, has surged 278.4% on DCAI momentum and NVIDIA’s own $5 billion equity investment. Broadcom (NASDAQ:AVGO), the custom-silicon story, is one example of another megacap stock that largely matches NVIDIA’s returns.

But the broader story is one of semiconductor stocks rallying. The VanEck Semiconductor ETF (Nasdaq: SMH) is up 59% year-to-date. The divergence looks set to continue today. The VanEck is up 3% premarket while NVIDIA shares are up just .3%, as of 8:40 a.m. ET. NVIDIA shares are under pressure on reports of delays across their upcoming lineup of Vera Rubin server systems.

The expectations trap The earnings do not explain the tape. Revenue rose 85% year over year to $81.6 billion, with data center up 92% to $75.2 billion. CEO Jensen Huang framed it plainly: “Agentic AI has arrived, doing productive work, generating real value and scaling rapidly across companies and industries.” But NVDA trades at a forward P/E of less than 20 now, and when a name becomes the consensus AI trade, even a blowout can underwhelm a market that had already priced perfection. Polymarket sentiment tracks this: end-of-July close-above-$200 probability sits at just 43%.

The competitive shift The narrative is fragmenting. NVIDIA still owns roughly 81% of the AI chip market, but Broadcom’s custom ASICs for Alphabet and Meta are eating the story, with Bloomberg Intelligence forecasting a 27% CAGR for custom ASICs through 2033 versus 16% for AI accelerators. Broadcom guided Q3 AI semiconductor revenue to $16.0 billion, more than 200% year over year. AMD’s Meta Instinct GPU deal anchors a multi-year hyperscaler thesis, and Lisa Su noted “leading customer forecasts exceeding our initial expectations” on MI450.

Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.

One important number to watch is the relative size of AMD compared to NVIDIA. Right now, AMD is worth about 18% of NVIDIA’s value. At the beginning of the year, AMD was worth less than 10% NVIDIA. Investors are still piling into companies benefiting from the data center buildout, they’re just not piling into NVIDIA.

The memory discipline trade Micron is a different animal. Samsung, SK Hynix, and Micron have avoided the aggressive oversupply that crushed memory pricing in prior cycles, a meaningful break from history. Q3 revenue exploded 345.7% year over year to $41.46 billion, and CEO Sanjay Mehrotra pointed to multi-year Strategic Customer Agreements designed to lock in durability. NVIDIA has been smart about locking in its own memory supply as other companies like Apple (Nasdaq: AAPL) have been caught flat footed. And yet, the combined value of Micron, SK Hynix, and Samsung now rivals NVIDIA itself.

Most strikingly, Micron is now forecasting adjusted gross margins of 86% next quarter, above the peak gross margins NVIDIA ever achieved. Some estimates put half of all data center spend going toward memory in 2027. Simply put, the rise of memory is shifting the center of gravity in the data center trade away from NVIDIA and towards memory names.

The durability question Which brings the market to the quiet question underneath all of it. Demand looks strong in 2027, but with hyperscalers now having to move into debt and equity offerings, the question of whether growth slows dramatically in 2028 is now front and center on investors minds. The ‘good’ news for NVIDIA investors is the company now trades for just 12X its forecasted 2028 earnings. If a slowdown does come, it’ll likely hit NVIDIA a lot less than names trading for 50X their forecasted 2028 profits.

Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.

Contact [email protected] for any questions or corrections.

NewPeak Metals Ltd (ASX:NPM, OTC:NPMFF, FRA:NPM) shares surged in morning trade after the company confirmed a large-scale gold-zinc-silver discovery from the first hole of its 2026 drilling program at the 100%-owned Las Opeñas Gold Project in San Juan Province, Argentina.

The stock surged as high as A$0.031 in morning trade, representing an intraday gain of about 107% from its previous close of A$0.015. The stock is currently up 66.6% intraday (1pm).

Assay results from discovery hole 26-LODH-023 returned mineralisation across the full 663-metre hole at 0.41 g/t gold equivalent, including 0.16 g/t gold, 0.65% zinc and 4.53 g/t silver from surface to end of hole. 

Broad mineralised system from surface The first hole delivered several stronger zones within the broader mineralised envelope, including 84 metres at 0.72 g/t gold equivalent from 20 metres, 282 metres at 0.65 g/t gold equivalent from 7 metres and 426 metres at 0.50 g/t gold equivalent from surface. 

Importantly, NewPeak confirmed a large-scale polymetallic system, with mineralisation extending over the entire hole.

The hole was drilled about five metres from historic hole 12-LODH-03, which returned 115 metres at 0.58 g/t gold, 0.65% zinc and 3.5 g/t silver from 18 metres to end of hole.

NewPeak’s proximity and consistency of results across the two holes provided early confidence in the scale and continuity of the system and its potential for future resource definition. 

“Exactly what we hoped to achieve” Managing director Mark Purcell said the first hole had confirmed the company’s exploration model at Las Opeñas.

“The first hole drilled at Las Opeñas since 2019, and the first diamond drill hole drilled since 2014, has confirmed the discovery of a large scale gold-zinc-silver system from surface, with polymetallic mineralisation extending over the entire hole,” Purcell said.

“Uncovering a system of such substantial scale is exactly what we hoped to achieve. The presence of meaningful zinc and silver credits is also very encouraging given both metals have been formally recognised as critical minerals by the USGS in 2025.” 

El Indio Belt location Las Opeñas is in San Juan Province, about 70 kilometres southeast of Barrick/Shandong’s Veladero Mine and around 110 kilometres north-northwest of Challenger Gold’s Hualilan Mine. 

 Location of Las Opeñas.

The project features a reinterpreted 800-metre by 600-metre breccia zone that had previously been drilled to relatively shallow depths.

NewPeak’s recent program tested deeper parts of the breccia area, which the company said appeared to form part of a rhyolitic complex associated with phreatic breccias and strong argillic alteration. 

A total of 2,464 metres of diamond drilling across six holes was completed between April and June 2026, with the program designed to test for large-scale gold-dominant polymetallic mineralisation. 

Zinc and silver add strategic angle Beyond the gold result, NewPeak highlighted the zinc and silver credits as an important part of the Las Opeñas story.

Zinc was added to the USGS 2025 Critical Minerals List, while silver is also on the list due to industrial demand, particularly from solar and electronics, and by-product supply constraints.

The polymetallic nature of mineralisation at Las Opeñas enhanced the project’s strategic positioning in a market increasingly focused on secure and diversified supplies of critical minerals. 

What’s ahead NewPeak expects assays from the remaining five drill holes — 26-LODH-024 to 26-LODH-028 — to be announced over the next three to six weeks. 

If those results are favourable, the company says it is well placed to push toward a maiden resource at Las Opeñas.

Permitting is already in place to recommence drilling of up to another 7,500 metres, pending supplier availability, allowing NewPeak to move relatively quickly to further test the large-scale mineralised zone. 

6.7.2026 15:50

Index Dow Jones -0,1 % na 52848,66 b. S&P 500 +0,44 % na 7516,13 b. Nasdaq Composite +0,91 % na 26067,65 b.

Obchodní den po prodlouženém víkendu začíná smíšeně. Index Dow Jones kosmeticky ztrácí, povedlo se mu ale po otevření poprvé překonat 53000 b. Tahounem indexu s růstem nad 2 % je Caterpillar (2,55 %) a Goldmman Sachs Group (2,41 %).

Z indexu S&P 500 posilují zejména informační technologie, kterých růst se propisuje i do indexu Nasdaq. Nejslabším sektorem je zdravotnictví. Pfizer ztrácí 2,06 %, Eli Lilly odepisuje 1,16 % a Johnson & Johnson klesá o 1,81 %.

Z technologií dnes opět rostou čipové společnosti. Broadcom a AMD posilují o víc, než 6 %, Nvidia se obchoduje na kladné nule.

Microsoft (-1,65 %) se chystá na další vlnu propouštění, která tentokrát zasáhne divize prodeje a Xbox. Celkem se má společnost zeštíhlit o přibližně 2 % pracovní síly, tedy 4 800 míst. Společnost se snaží o zefektivnění nákladů a tlačí na zvyšování efektivity všech divizí. Microsoft zvažuje i změnu struktury herní divize s možným prodejem několika studií.

OPEC o víkendu oznámil záměr zvýšit těžbu černého zlata. V srpnu by se měl objem navýšit o 188 tis barelů denně. Futures kontrakty na WTI reagují mírným poklesem. Aktuálně se barel obchoduje pod USD 69.

Index S&P 500 +0,44 % na 7516,13 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Informační technologie +1,6 % Zdravotní péče -1,8 % Průmysl +1,2 % Nezbytná spotřeba -0,8 % Finanční sektor +0,2 % Reality -0,6 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Western Digital Corp (WDC) +9,0 % O'Reilly Automotive (ORLY) -5,2 % Advanced Micro Devices (AMD) +7,5 % AutoZone (AZO) -4,7 % Vertiv Holdings (VRT) +7,4 % Constellation Brands (STZ) -3,8 % Teradyne (TER) +7,1 % SBA Communications Corp (SBAC) -3,7 % GE Vernova (GEV) +6,5 % Genuine Parts (GPC) -3,6 %
Marek Kameništiak
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While it is undeniable that, in 2026, Nvidia (NASDAQ: NVDA) stock has not only slowed down but has also corrected from the highs above $5 trillion it set on several occasions in the last year, ChatGPT estimates the time is not quite right to take a short position against the semiconductor giant.

Specifically, OpenAI’s flagship artificial intelligence (AI) platform estimated after analyzing the market that, at the ongoing stage of the supercycle, NVDA’s performance is contingent on the continued capital expenditures (CapEx) of its largest customers:

Nvidia is no longer primarily trading on quarterly GPU demand. It’s trading on the duration of the AI investment cycle.

Additionally, ChatGPT determined that CapEx plans for 2027 will prove critical for the blue-chip chipmaker and, under the circumstances, assessed that the likely best opportunity for shorting Nvidia stock will come in late October and early November of 2026 – once the company’s customers’ plans become more set in stone.

ChatGPT picks the best time to short Nvidia stock. Source: Finbold & ChatGPT Notably, the AI warned that the sign that taking a short position is the right call will come in the form of either slower growth in planned CapEx or an outright decrease in planned expenditures – an outcome that is not guaranteed at press time on July 6, 2026.

Is now a good time to short Nvidia stock as Kyber racks get delayed Elsewhere, the Monday, July 6, news that Nvidia Kyber racks for Vera Rubin are getting delayed might have already presented a shorting opportunity, though both the NVDA extended session performance and the long-term implications indicate it might eventually transform into a tailwind.

MASSIVE DELAY: Just 3 months after Jensen demoed Kyber NVL144 at GTC, it has faced major setbacks and has been delayed by more than 12 months, pushing it back to 2028. Below, we explain why Kyber has faced massive delays and why NVIDIA’s NVL72x2 back-to-back rack architecture was… pic.twitter.com/VYduxnu01B

— SemiAnalysis (@SemiAnalysis_) July 5, 2026 Specifically, AI boom skeptics have, for months, been pointing out that the rollout of new racks could present a major problem for many of the semiconductor giant’s customers due to likely incompatibility with the chips designed for the current-generation Oberon.

The setup would, therefore, require significant overhauls of data centers – many of which are yet to be built – if not the construction of entirely new facilities should their operators desire to upgrade to the latest equipment.

Thus, the Kyber delay could enable Nvidia’s customers to use at least a significant portion of the useful life of the hardware they have already purchased before committing to billions, if not trillions, in additional CapEx.

Considering the most recent developments in the technology sector – exemplified by the implied oversupply of AI compute capacity – it is doubtful if interest in the new racks would be sufficient to allow the world’s largest chipmaker to maintain its growth rate or even its current valuations just short of $5 trillion.

2026 Nvidia stock price performance Meanwhile, despite slowing down, Nvidia stock remains 3.17% green year-to-date (YTD) and, despite the news of the next-generation racks delay, it has rallied 0.47% from $194.83 to $195.75 in the July 6 pre-market.

Nvidia stock price YTD chart. Source: Google Notably, the relatively small 2026 upside and the significant correction from all-time highs (ATH) above $5.5 trillion reduce the odds of NVDA shares suffering a major crash without significant external bearish news, especially since its smaller competitors like AMD (NASDAQ: AMD) and Intel (NASDAQ: INTC) enjoyed three-figure rallies this year.

Featured image via Shutterstock

So far, 2026 has been another year during which Wall Street was dominated by stocks in the artificial intelligence (AI) sector. However, the biggest winners were not the same old names from prior years. Companies in the memory chip space have soared, with stocks like Micron and Sandisk posting unbelievable gains.

Additionally, comeback stories in the processor chip space such as AMD and Intel have delivered solid returns. However, the AI stocks that have been mostly poor performers were the ones that were the best performers in 2023, 2024, and 2025. This could signal the start of a regime change, or it could simply reflect the market becoming interested in new parts of the AI narrative.

I think the latter is more likely, as the companies that dominated during the three previous years are still doing well as businesses; they're just not trading at the same premiums they used to. I think that two in particular are the best bets to soar over the rest of this year.

Image source: Getty Images.

1. Nvidia Nvidia (NVDA 1.39%) may be the world's largest company, but it isn't getting the respect it deserves on Wall Street. I think there's a bit of market hesitancy to send shares of Nvidia too much higher, though if it traded at its normal valuation level, it would be 50% higher today.

Over the past two years, Nvidia stock has averaged about 34 times forward earnings. Today, it's sitting at 21.7 -- about the same forward ratio as the S&P 500 (^GSPC +0.00%).

NVDA PE Ratio (Forward) data by YCharts.

If that were the only information you had, you might assume that Nvidia's best days were behind it and that its growth was slowing. But that's far from the case. Next quarter, Wall Street analysts project revenue growth of 96% year over year -- an acceleration from its current levels, and faster than it was growing at this point last year.

NVDA Revenue (Quarterly YoY Growth) data by YCharts.

As a result, I don't see any reason Nvidia shouldn't trade at that higher valuation. Peer chipmaker AMD, which is growing more slowly, trades at 73 times forward earnings. So Nvidia is undervalued both on a historical and a peer-group basis, and I think a rise could be coming in the latter half of this year as the market realizes that Nvidia's growth story will easily last beyond 2027.

2. Meta Platforms Nvidia's stock is in positive territory for 2026, though just barely. Meta Platforms (META 4.80%) is not. Its stock has declined about 12% so far this year. Once again, this isn't a question of whether Meta is doing well as a business, because it is.

In Q1, its revenue rose 33% year over year, the fastest growth among the big tech companies that aren't directly involved with AI chips. Its strength stemmed from a booming ad market, which has delivered even better results for marketers now that Meta has integrated AI tools into its social media sites' advertising platforms. However, that's not what the market is focused on.

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Instead, the market is worried about Meta's elevated spending on AI infrastructure. It's considered one of the big four AI hyperscalers alongside Alphabet, Microsoft, and Amazon. These other three have cloud computing businesses that generate income and help offset some of the costs of the AI data centers being built. It also gives investors a clear return on investment.

Meta doesn't have a cloud business yet. Though it has spent hundreds of billions of dollars on AI data centers, that sum has gone entirely toward building out capacity for its internal needs. That heavy spending has investors worried, which is why Meta stock is on sale. Last week, though, Meta announced it was going to start selling some of its excess capacity to outside clients, which sparked a bit of an uptick in the stock. And it still has a long way to go.

Even after that pop, investors can scoop up Meta's for a dirt cheap 19.5 times forward earnings. I think that's a screaming deal, because one of two things will happen. Either Meta's AI investments will pan out, and the company will gain a new business unit that makes all of the investments worth it in the end. Or Meta's AI strategy will be a flop, in which case it will sell much of the infrastructure it has built, take the loss, and then maintain its status as an incredible social media business with strong ad revenue.

Either way, long-term investors will be all right in the end.

Keithen Drury has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Intel, Meta Platforms, Micron Technology, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

Nvidia (NVDA 1.39%) has been the "go-to" artificial intelligence (AI) stock for a number of years. Since this tech giant is the No. 1 designer of AI chips, it's generated mind-boggling revenue growth that's reached record levels and proven itself to be a winner in the AI boom. So it's no surprise that investors have turned to the stock, pushing it to a gain of about 900% over the past five years.

But in the first half of this year, a shift took place. Investors rotated out of some of the biggest AI winners -- like Nvidia -- and picked up shares of AI stocks that hadn't yet gained as much. That movement helped fellow chip companies Advanced Micro Devices (AMD 4.60%) and Intel (INTC 5.61%) soar. Climbing 171% and 278%, respectively, in the first half, they crushed Nvidia. The AI chip giant advanced 7.2%, which is a pretty small gain for this stock.

Will AMD and Intel keep crushing Nvidia? Here's my prediction for the second half.

Image source: Getty Images.

The AI opportunity Before we get to my prediction, though, let's catch up on how these companies have approached the AI opportunity so far. Nvidia was the first to market with graphics processing units (GPUs) tailored to the needs of AI, allowing the company to build out its leadership here. Intel and AMD have traditionally been leaders in another type of processor: the central processing unit (CPU), the main processor in computers.

Intel has led here for years and holds more than 59% of total CPU market share, though AMD has gained ground, progressing from a low of about 17% back in 2016 to 38% today.

The GPU was the most relevant of the two chips during the early days of AI, driving the most important tasks such as the training of AI models. And that was fantastic news for Nvidia. AMD and Intel entered the GPU market later, and while AMD has successfully delivered growth here, Intel has experienced difficulty.

That said, Intel aims to turn this around and has taken key steps. The company appointed new chief executive officer Lip-Bu Tan a little over a year ago to drive the company's turnaround strategy and strengthen its position in the AI market, and investors like the progress so far and the good news that's emerged. The U.S. government took a 10% stake in Intel last summer, worth about $10 billion -- a sign of confidence that investors appreciated. In the latest quarter, Intel's revenue climbed 7%, and this was the sixth straight quarter of revenue that beat the company's expectations.

AMD and Intel skyrocket So, it's not surprising that AMD and Intel, which greatly lagged behind Nvidia from a stock performance perspective, saw their shares skyrocket in the first half of this year.

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Now, here's my prediction for the second half. I predict that Nvidia will outpace these rivals. And this is for two reasons: Nvidia's next goal and its valuation. I'll start with the goal, and this is to dominate the $200 billion CPU market -- a market where Nvidia has not been greatly present in the past. In fact, it's launching its first-ever stand-alone CPU this fall as part of the Vera Rubin platform. And at the same time, Nvidia is targeting the personal computing market with a superchip -- also set for fall release -- that includes a GPU and a CPU.

While it may be difficult for Nvidia to take complete leadership of the entire CPU market, I think the company could clearly dominate in the CPU market for data centers. Nvidia already forecasts $20 billion in stand-alone CPU sales this year. It's important to note that the CPU is the key chip needed to power agentic AI -- and agentic AI is expected to be the next AI growth driver. This involves the application of AI to real-world problems, with the agent taking problem-solving steps.

While Nvidia's potential CPU market leadership won't happen overnight, a successful launch of the Rubin platform and high demand could lead to positive stock performance for Nvidia in the second half.

Valuation could also push investors to favor Nvidia over AMD and Intel.

NVDA PE Ratio (Forward) data by YCharts

At about 22x forward earnings estimates, Nvidia looks dirt cheap, while the two chip peers look excessively expensive after their recent gains. All of this prompts me to predict that Nvidia, which saw a pause in its stock market momentum in recent months, may soar in the second half -- and crush AMD and Intel.

It's never fun to see your investments lose money. And when a stock's price falls more than 10% in a month, it's normal to wonder if you should sell to lock in your gains before it falls any further.

That's something investors in Nvidia (NVDA 1.39%) need to seriously think about. Shares of the world's leading chipmaker dropped 12.6% between June 2 and July 2, and they're down 17% from May's all-time high of $235.74/share.

But this latest drop might not be such a bad thing, actually. Here's why investors shouldn't panic and why Nvidia's pullback might actually be good news.

Image source: Nvidia.

There have always been ebbs and flows with Nvidia stock Obviously, a pullback in a company's stock price offers new investors the opportunity to buy the dip. That's not the kind of "good news" I'm talking about here, although it's true that now might be a good moment to open a new position in the chipmaker if you don't already own shares.

Instead, I'm talking about the natural ebbs and flows of Nvidia's stock price. The company's road to being the largest company in the world with a $4.7 trillion market cap hasn't been a smooth one. In just the last five years, the stock has seen dizzying plunges multiple times.

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Between November 2021 and October 2022, Nvidia's share price plunged 66%. It recovered a bit, only to drop by more than 20% again in December 2022. The company went on to experience nine drops of 15% or more between July 2023 and March 2026, about three per year.

But over the last five years, the stock has risen by more than 851%. And if you had sold during any one of those previous 15% dips, you would have missed out on lots of gains.

The biggest of those gains came suddenly and after a prolonged downturn. For example, between October 2025 and March 2026, Nvidia's stock lost 20% of its value over five months. Then, without warning, shares surged 42.7% between March 30 and May 14, hitting all-time highs.

Image source: Getty Images.

A roller-coaster ride When a stock rockets upward and never experiences temporary pullbacks like Nvidia's has over the last five years, it can make new investors reluctant to buy shares out of concern that the stock is too expensive. And as the world's largest company by market cap, Nvidia already faces skepticism about its valuation.

It can also set the company up to experience a major share price drop if it reports anything less than stellar earnings. Nvidia doesn't seem to have that problem. In fact, it almost faces the opposite issue: Over the past two years, Nvidia's earnings reports have been stellar, with massive growth in revenue and net income. Yet after five of its last eight earnings reports, the stock has seen an immediate and significant share price decline.

If recent history is any guide, Nvidia's recent share price drop is likely to reverse itself unexpectedly, and the stock should soar to new heights. Smart investors know better than to panic sell this longtime winner that's still at the top of its game.

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Artificial intelligence has become the defining investment story of this decade. Nvidia (NASDAQ:NVDA | NVDA Price Prediction), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG), and a handful of other technology giants are on pace to spend well over $1 trillion building the infrastructure needed to power AI, from advanced semiconductors and data centers to power grids and networking equipment.

Wall Street has largely viewed that spending as inevitable. As long as AI adoption keeps accelerating, investors assume the money will continue flowing. But the world’s central banks appear increasingly uncomfortable with exactly how that expansion is being financed.

The Bank for International Settlements (BIS) — the “central bank for central banks” — used its latest Annual Economic Report to warn about concentrated AI investment, growing leverage, opaque financing arrangements, and expanding links between traditional banks and private credit markets. While the report never explicitly says regulators want to slow artificial intelligence, many of its recommendations would do precisely that by making the capital fueling the AI boom significantly more expensive — and potentially much harder to obtain.

For investors, that’s a risk the market may be dramatically underestimating.

AI Doesn’t Just Run on Chips. It Runs on Credit. The AI revolution is often portrayed as being financed by cash-rich technology companies. That’s only part of the story.

Even companies generating tens of billions of dollars in annual free cash flow are borrowing aggressively because AI infrastructure spending is occurring faster than internally generated cash can support. Corporate bond issuance has surged while banks have become critical financiers of everything from semiconductor fabrication plants and hyperscale data centers to power infrastructure and cloud expansion.

The current AI buildout isn’t simply a technology boom. It’s a credit boom. That distinction matters because credit cycles have a long history of ending far more abruptly than technology cycles.

Forget competition—the real threat to AI giants is a tightening credit noose that could suffocate the trillion-dollar infrastructure boom. © 24/7 Wall St. Basel III Could Squeeze the AI Financing Machine The BIS is pushing countries to complete implementation of the Basel III Endgame, the final phase of global banking reforms developed after the 2008 financial crisis. On paper, the rules are about strengthening banks. In practice, they fundamentally change how the world’s largest financial institutions evaluate and finance risk.

Banks would lose much of their ability to use proprietary internal models that often classify large corporate loans as relatively safe. Instead, regulators would require standardized risk calculations, stricter operational risk requirements, tougher market-risk rules under the Fundamental Review of the Trading Book, expanded recognition of unrealized losses, and higher capital requirements for globally systemic banks.

Every one of those changes points in the same direction. Banks would need to commit considerably more capital to support large, complex technology loans. That doesn’t eliminate financing, but it makes it substantially more difficult and expensive.

The Risk Is Bigger Than Higher Borrowing Costs Many investors assume that higher financing costs simply slow growth. The BIS report suggests something more dangerous.

Today’s AI investment boom depends on a continuous flow of capital. Companies are spending enormous sums today based on expectations that tomorrow’s AI revenues will justify the investment. If financing becomes more restrictive, companies may begin delaying projects, scaling back data center construction, or prioritizing only their highest-return initiatives.

That wouldn’t just affect hyperscalers. Chipmakers, networking companies, equipment suppliers, utilities, construction firms, and countless AI startups all depend on that spending pipeline remaining intact.

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The risk is reflexive. Less financing leads to slower capital spending. Slower spending weakens revenue growth across the AI ecosystem. Lower growth compresses stock valuations, making raising new capital even more difficult. That leads to further spending reductions, creating a self-reinforcing cycle that can accelerate surprisingly quickly.

Markets often assume trends continue indefinitely — until they don’t.

Private Credit Isn’t the Safety Valve Investors Think Many bulls argue private credit can simply replace traditional bank lending if Basel III limits bank financing. The BIS appears to have anticipated that argument.

Its report repeatedly warns that risk migrating from regulated banks into private credit doesn’t reduce systemic risk — it merely hides it. Private credit funds have become major lenders to technology companies precisely because they operate with fewer regulatory constraints. But that freedom comes with vulnerabilities.

The sector has experienced rising defaults, increasing use of payment-in-kind financing that allows troubled borrowers to defer cash interest payments, growing redemption pressure from investors, and significant concentration in technology lending.

The BIS argues that allowing AI financing to migrate wholesale into shadow banking simply creates a different kind of financial instability. Its long-term solution is to extend tougher oversight to private credit as well through leverage limits, enhanced reporting requirements, and stricter collateral standards.

In other words, regulators don’t just want to tighten bank lending. They want to tighten the entire credit ecosystem supporting speculative investment.

Key Takeaway Investors ignore the big picture at their own peril. Artificial intelligence is a transformative technology, but one that still requires capital.

Railroads transformed America despite repeated financial panics. The internet revolution survived the dot-com bust. Revolutionary technologies often outlive the speculative bubbles built around them. That’s why investors should distinguish between AI’s long-term future and today’s financing model.

Current valuations assume years of uninterrupted capital spending and virtually unlimited access to financing. The BIS is signaling that the era of easy money and lightly regulated credit may be coming to an end.

If global regulators successfully restrict both bank lending and private credit while central banks keep interest rates elevated, they won’t necessarily kill artificial intelligence. But they could dismantle the financial engine powering today’s AI spending boom.

And if that engine stalls, investors may discover that the biggest risk to AI stocks wasn’t competition or slowing demand. It was credit all along.

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The "Magnificent Seven" stocks have led the S&P 500's gains throughout this bull market, helping the index climb 78% over the past three calendar years. This has been amid excitement about artificial intelligence (AI), a technology seen as game-changing for its ability to revamp how business is done and how daily life is organized. Each of these tech giants is involved in AI to some degree and clearly could benefit as the AI story unfolds.

Amid various headwinds, from geopolitical to general worries about AI spending, these players didn't soar in the first quarter of the year -- but the second quarter was a better period for most, even if they didn't replicate the extraordinary performance delivered in recent years.

Now, as the second half of the year begins, it's the perfect time to examine the performance of the "Magnificent Seven" stocks in the recent quarter -- and consider which ones are the best buys. Let's get started.

Image source: Getty Images.

A track record of growth So, first, a quick note about these companies. Investors started calling them the "Magnificent Seven" a few years ago in reference to the 1960 Western. Like the main characters in the film, they're tough and can get the job -- in this case, technology -- done. Each of these companies has built a track record of earnings growth, is a leader in its specialty area, and has solid long-term prospects.

Now, let's rank these companies by second-quarter performance, from best to worst.

Alphabet (GOOG 0.48%) (GOOGL 0.23%), up 23% Nvidia (NVDA 1.39%), up 14.7% Amazon (AMZN +0.55%), up 14.4% Apple (AAPL +4.88%), up 14% Tesla (TSLA 7.35%), up 13% Microsoft (MSFT +1.69%), up 0.7% Meta Platforms (META 4.80%), down 1.5% The first to benefit from AI Alphabet, Nvidia, and Amazon may have climbed the most as they've been among the first to benefit from the AI boom. Alphabet and Amazon have seen revenue soar thanks to their cloud services for AI customers, and Nvidia, as the AI chip leader, has been an enormous winner since the earliest days of the AI story. For example, Nvidia reported record revenue of more than $215 billion in the latest fiscal year, and Amazon Web Services (AWS) -- Amazon's cloud unit -- recently reached an annual revenue run rate of $150 billion. So it's not surprising to see their stock prices climb as investors return to AI stocks.

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Microsoft's performance has suffered as some investors worried that progress in AI would lead to the technology replacing software. But Microsoft stock has gradually returned to positive territory amid optimism that the company's deep presence within its customers' operations would help it maintain its market position.

As for Meta, the company is working on AI to make its apps better, deliver personalized AI to users, and improve the advertising experience and results for its ad customers. All of this could generate significant growth down the road -- but it takes time to monetize, and that has weighed on investors' appetite for the stock.

Which stocks are great buys? Now, let's consider which of these stocks today make the best buys. As mentioned above, each of these players offers a track record of profitability and excellent long-term prospects, elements that support the investment case. It's important to note that certain Magnificent Seven companies may be "safer" bets, while others may be a bit higher risk. So it's important to consider your investment style before choosing a stock.

Next, let's take a look at valuation.

AMZN PE Ratio (Forward) data by YCharts

As you can see in the chart above, Tesla is the priciest in relation to forward earnings estimates, while Meta is the cheapest. But in my opinion, neither is the very best buy right now.

Instead, I would opt for Alphabet and Nvidia. These two AI giants have seen their stock prices advance, showing momentum, yet they remain very reasonably priced -- in the case of Nvidia, I would go so far as to say the stock is dirt cheap considering the company's strength in AI and expertise in serving various industries, from telecom to robotics. Meanwhile, these players are monetizing AI, so they already are benefiting from their investments.

All of that makes Alphabet and Nvidia the best "Magnificent Seven" players to scoop up as the second half gets started.

Here is a sentence that shouldn't be possible. Nvidia (NVDA 1.39%), the most valuable company in the world, is now cheaper than Coca-Cola (KO +3.51%) -- at least by the measure investors lean on most when they're paying for future profits. As of this writing, Nvidia trades at about 22 times forward earnings. Coca-Cola trades at about 26 times.

The two stocks arrived at this inversion from opposite directions. Coca-Cola closed Thursday at $84.14, a record high, after rising about 20% in 2026. Nvidia sits roughly 18% below its 52-week high after months of investor second-guessing about how long the artificial intelligence (AI) spending boom can run. The divergence sharpened this week: on Thursday alone, Coca-Cola jumped 3.5% to its record while Nvidia slipped.

So which price is wrong?

Image source: Nvidia.

How the math flipped The forward price-to-earnings ratio measures a stock's price as a multiple of the consensus forecast for its earnings per share over the next 12 months. It's a useful yardstick for comparing two very different businesses, because it puts the two businesses in the context of their future earnings potential.

On that basis, the world's biggest company has become the cheaper stock. Nvidia's forward multiple has drifted into the low 20s as its earnings forecasts have outpaced its share price. Coca-Cola's forward earnings multiple has climbed into the mid-20s as its share price has outrun its steady earnings growth. On trailing results the two are closer -- Nvidia at about 30 times earnings, Coca-Cola at about 26 -- but the forward gap is the telling one, because Nvidia's profits are still compounding at extraordinary rates.

Growth certainly doesn't explain the inversion. Nvidia's revenue in its fiscal first quarter (ended April 26, 2026) rose 85% year over year to $81.6 billion, with data center revenue climbing 92% to $75.2 billion. And management guided for about $91 billion in revenue for its fiscal second quarter (the current quarter).

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Coca-Cola is having a good year by its own standards. Net revenues grew 12% to $12.5 billion in the first quarter, and organic revenue grew 10% -- helped in part by six extra days on the calendar -- and comparable earnings per share rose 18%. Yet the company's full-year outlook calls for organic revenue growth of 4% to 5%.

So a company that just grew revenue 85% costs less per dollar of expected profit than one guiding for mid-single-digit organic revenue growth. That's the inversion.

What each price is saying Markets rarely hand out discounts for no reason, and Nvidia carries a specific fear: that AI infrastructure spending is cyclical, and that today's earnings sit closer to a cycle top or at least some sort of plateau. If the big cloud companies ever pause to digest the computing capacity they've bought, or if chipmaking competition ramps up and erodes Nvidia's pricing power, its earnings growth could slow dramatically or even turn negative.

Coca-Cola's valuation premium is the opposite story. Its earnings are among the most predictable in the market, and in a year when investors have favored defensive dividend payers, predictability commands a higher price than usual. Nobody buying Coca-Cola at a record high expects 85% growth. But they expect no surprises.

Both prices, in other words, can be justified. But which investment is better?

For Coca-Cola to justify a mid-20s forward multiple, its mid-single-digit revenue growth must essentially persist indefinitely. Even more, the market must continually maintain an appetite for safety and durability. Otherwise, investors could sell off the stock even if revenue and earnings growth persist at similar rates. History suggests that paying up for safety carries its own cost. When the anxiety that drove investors into defensive names fades, so can the premium.

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For Nvidia to justify a low-20s multiple, the company's revenue and earnings growth could slow dramatically over the coming years, and the stock would likely still live up to its valuation. And, in the meantime, management's guidance for roughly $91 billion in revenue this quarter suggests demand hasn't cracked yet. But the risk lies further out: whether AI spending continues to compound into 2027 and beyond.

If one of these two prices is wrong, I think it's Nvidia's. A dominant company growing this fast rarely trades at a discount to a mature consumer staple, and the discount exists mostly because investors are bracing for a slowdown that even the company's own guidance doesn't yet show.

Of course, the bear case for Nvidia (that growth unexpectedly slows) is worth respecting. Semiconductors have always been cyclical, and this boom will eventually cool. But at these prices, this risk may already be fully priced in.

With this said, I wouldn't sell Coca-Cola to buy Nvidia. The two do different jobs in a portfolio. But for new money weighing the pair today, the growth is on sale, and the safety is marked up. I'd buy the one on sale.