Nvidia stock is doing something it hasn't done in years

Nvidia (NVDA) has spent the last three years as the loudest success story in the stock market. Its climb turned it into a household name well beyond Wall Street trading desks, and its chips have become shorthand for the entire artificial intelligence boom.

This year looks different. The gains are smaller, debates are louder, and longtime investors are now asking new questions about what's next for the world's most valuable chipmaker. Nothing about the business has broken down so far, which is exactly what makes the pause worth examining.

Nvidia stock is barely beating the S&P 500 in 2026

Nvidia shares have gained 12% so far in 2026, Motley Fool reported. That is barely ahead of the S&P 500 index over the same stretch, a gap far narrower than investors have grown used to seeing from this stock.

Nvidia stock climbed 239% in 2023, 171% in 2024, and 39% in 2025, three straight years of returns most companies never see once, let alone in a session. Since late July 2021, shares are still up 978% overall, a figure few investors anywhere on Wall Street can match.

TheStreet reported Nvidia closed at $212.06 on July 22, up 2.3% on the day, tied to Alphabet's own capital spending update. The move came as Google lifted its 2026 capex forecast to as much as $205 billion, a figure that reassured investors watching for signs of intense AI spending.

Nvidia has still managed to hold its own against the broader tech selloff this month. Its stock is down about 16% from its May record high, a milder pullback than several of its semiconductor peers have absorbed. Micron and other memory chip names have actually outpaced Nvidia this year, spreading the AI trade across a wider set of stocks than before.

Record revenue tells a different story

While the stock has cooled, Nvidia's underlying business has not. Revenue jumped 85% year-over-year in its fiscal 2026 second quarter, ended April 26, reaching a fresh record of $81.6 billion and beating what was already an aggressive set of Wall Street estimates.

Demand for AI computing power remains the driving force. Hyperscalers, the large cloud companies building data centers for training and running AI models, continue spending at a pace few predicted even a year ago, and Nvidia sits directly upstream of nearly all of it.

Chief financial officer Colette Kress told analysts on the latest earnings call that AI infrastructure spending is on track to reach $3 trillion to $4 trillion annually by the end of the decade.

Nvidia CEO Jensen Huang has echoed that confidence publicly, telling reporters in Seoul on June 8 that investors should treat any pullback as a buying opportunity, according to an interview recap as reported by TheStreet. "We're at the beginning of it, and whatever happened to the stock market, you should be very happy because now you can buy at a discount," Huang told reporters in Seoul. Huang pointed to roughly $500 billion in AI chip bookings covering 2025 and 2026 combined, as TheStreet reported.

Wall Street strategists have started treating Nvidia as something of a barometer for the entire AI trade. Nvidia functions as a stress test for the sector, since it usually captures the biggest share of corporate AI spending before anyone else does, making its results a useful early read on the health of the broader buildout.

Wall Street debates Nvidia's valuation reset

Slower stock gains along with record revenue have left Nvidia looking unusually cheap by its own recent standards. The stock now trades at a forward price-to-earnings ratio of 23.6, just a 10% premium to the S&P 500 index, a gap that would have seemed unthinkable a year ago.

That marks a real shift. Nvidia spent 13 years trading at a steep valuation premium above the broader market, a pattern that only recently broke, according to an earlier report from March. Some analysts have gone further, framing the reset as a genuine test of whether the AI trade has peaked.

Not every analyst reads the reset the same way. According to TheStreet, Wedbush's Dan Ives has set one of the boldest 2026 targets of $250 for Nvidia, representing a 33% gain from the $187.67 price at the time the target was set, arguing capex estimates have consistently underestimated the actual AI buildout.

Meanwhile, BofA analyst Vivek Arya raised his target to $320 from $300 on May 13, pointing to a data center systems market he now estimates could reach $1.7 trillion from its prior estimate of $1.4 trillion by 2030, 24/7 reported.

Other AI-linked stocks have outrun Nvidia this year, with Micron among the standout gainers as investors spread their AI bets more widely across chipmakers, memory suppliers, and networking names. That broadening trade is part of why Nvidia's own gains look modest by comparison, even with its business performing at record levels.

What comes next for Nvidia stock

Wall Street's numbers hint at the deceleration ahead. Sell-side consensus estimates call for Nvidia's revenue to rise 219% between fiscal 2026 and fiscal 2029, a meaningfully slower pace than the roughly 700% growth notched over the prior three years combined.

That is not necessarily bad news. A 219% multi-year growth rate would still be extraordinary for a company already generating record quarterly revenue, and Nvidia's valuation has come down to reflect a more measured outlook rather than a business in trouble. Investors chasing the next parabolic move may be disappointed, but those looking for durable growth at a reasonable price now have more room to work with.

Nvidia's next earnings report is expected August 26, and it will likely settle some of this debate one way or another. Until then, investors are left weighing a stock trading close to market multiples against a business still growing faster than almost anything else on Wall Street.