As Nvidia (NVDA.O), opens new tab heads into quarterly earnings on Wednesday, AI investors are seeking evidence that the chipmaker's profits are growing apace on the back of a $630 billion capital spending budget from Big Tech. But signs of risk to Nvidia's long-held dominance are also emerging from hyperscalers' plans to design their own cheaper AI chips. After powering much of the U.S. stock market rally for the past three years, Nvidia's stock has risen just about 2% so far in 2026. Get a daily digest of breaking business news straight to your inbox with the Reuters Business newsletter. Sign up here. Advertisement · Scroll to continue
Nvidia 2026 stock performance vs MAGS ETF and S&P 500 Nvidia 2026 stock performance vs MAGS ETF and S&P 500 Along with Advanced Micro Devices, which is set to unveil a new flagship AI server later this year, Alphabet's (GOOGL.O), opens new tab Google has emerged as a top rival with a deal to provide Claude chatbot creator Anthropic with its in-house chips called TPUs. Google is also in talks to supply Meta (META.O), opens new tab - a large Nvidia customer, according to media reports. To defend its position, Nvidia struck a deal, reportedly worth $20 billion, last year to license chip technology from Groq - a move that analysts say would boost its position in the booming market for inference, the process by which a trained AI model answer questions in real time. Nvidia last week also agreed to sell millions of chips to Meta, though it did not disclose the value of the deal. Advertisement · Scroll to continue But Nvidia, the biggest winner of the AI boom, has itself stoked doubts about whether the spending is sustainable by drawing out the process of a potential $100 billion investment in OpenAI, one of its biggest customers. A recent media report said it plans to replace that commitment with a smaller $30 billion investment. "This earnings in particular is important because people are so concerned about AI spending - whether we're in a bubble," said Ivana Delevska, chief investment officer of Spear Invest, which holds the company's shares in an exchange-traded fund. "Showing that earnings are not really decelerating will be pretty important." Wall Street expects Nvidia to report that profit in the quarter ended January surged more than 62%, according to data compiled by LSEG, a slowdown from 65.3% growth in the previous quarter as it faces tougher comparisons with its previous earnings.
