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Mega-cap tech is ready to raise the bar on its AI spending, and that's really helped shares of NVIDIA (NASDAQ:NVDA) come roaring back after a few sessions that saw all of tech (AI and software) take several steps lower.
Nvidia Corporation's stock lags 12-13% below 52-week highs despite strong fundamentals and growing AI-driven demand from mega-cap customers like Meta, Microsoft, Alphabet, and Amazon. Q4 2026 revenue guidance of $65 billion plus 2% implies a potential beat near $67.3 billion, driven by full-rack solutions and AI software growth. NVDA's operating leverage is improving due to higher-margin integrated rack sales, software revenue from Nvidia AI Enterprise, and strategic price increases on GPUs.
Nvidia is rated a strong buy with a $219 price target, offering 25% upside and countering bearish views of a potential AI bubble collapse. The company's competitive moat is built on vertical integration of hardware, networking, and a dominant CUDA software ecosystem with over 4.5 million active developers. Nvidia shows elite profitability through its fabless model, generating an industry-leading $2.76 million in net income for every employee on the payroll.
Artificial intelligence (AI) drove Nvidia to new heights, but fears of a peak have pushed the stock into correction territory. The company supplies the processors that fueled the AI boom.
Nvidia's stock boomed between May and November last year. Now, it has returned to the low valuation level it sat at last spring.
Nvidia Corporation (NASDAQ:NVDA) surged 72% on Friday, February 6, 2026, closing at $185 after opening at $176.69.
America's biggest cloud giants are doubling down on their investments in AI hardware. That hasn't helped their shares lately—but chipmakers are getting a lift as their orders keep rolling in.
The tech industry's surging capital expenditures for AI infrastructure is justified, appropriate and sustainable, Nvidia CEO Jensen Huang said Friday on CNBC's "Halftime Report." Huang's comments come after key Nvidia customers Meta, Amazon, Google and Microsoft reported their latest earnings over the past two weeks.
Nvidia's stock was on pace to break a five-day losing streak on Friday.
Nvidia (NASDAQ: NVDA) shares jumped 5% when the market opened on Friday, February 6, recovering some of the recent losses as the Nasdaq stabilized after a technology-led sell-off.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price.