Only Nvidia Is Winning While Big Tech Bleeds Money Into AI

Nvidia stands alone as the only megacap stock gaining this year. Behind the $700B AI spending spree, who are the real winners and losers?

Seven out of eight trillion-dollar tech companies are bleeding red this year. The lone survivor? Nvidia.

While the Nasdaq dropped over 2.5%, Nvidia climbed 2.7%. Microsoft, Amazon, and Tesla all posted double-digit declines. As Wednesday's earnings approach, Wall Street already knows the story—but the implications run deeper than the numbers suggest.

The $700 Billion AI Arms Race

Alphabet, Microsoft, Meta, and Amazon are projected to spend nearly $700 billion combined this year on AI expansion. That's a 60%+ increase from 2025's already historic levels.

Where does most of that money go? Straight to Nvidia's coffers. The chipmaker now derives roughly 90% of its revenue from data center business, housing the GPUs and AI systems that power virtually every large language model.

Jensen Huang revealed in October that 6 million Blackwell GPUs shipped in the past four quarters, with Nvidia expecting $500 billion in GPU sales between Blackwell and the upcoming Rubin generation.

The Simplicity Paradox

"The story is so unbelievably simple, yet at the same time quite complex," wrote Cantor Fitzgerald analysts. The simple part: AI infrastructure demand appears insatiable. The complex part: growing fears that tech giants are overbuilding.

Wedbush Securities noted that "hyperscale capex forecasts for 2026 have exceeded prior expectations," with AI infrastructure representing the bulk of forward spending. Over 90% of FactSet-tracked firms recommend buying Nvidia shares, with Wedbush setting a $230 price target—20% above Monday's close.

The Groq Wild Card

Nvidia's $20 billion acquisition of AI startup Groq in December adds a new wrinkle. Groq specializes in AI "inference"—using AI to make decisions based on new information—distinct from Nvidia's training market dominance.

Analysts see this as crucial: "With concerns around increased competition from ASIC solutions being one of the greatest drags on Nvidia's performance, we believe a strong Groq-related roadmap could meaningfully allay investor concerns."

The Numbers Game

Analysts expect 68% revenue growth to $66 billion for Q4, with April quarter projections showing 63% growth to $72 billion. The upcoming Vera Rubin rack-scale systems launch later this year has investors particularly excited.

The Overbuilding Question

But here's where it gets interesting. Tech companies are essentially betting their futures on AI infrastructure that may not generate returns for years. Every data center packed with Nvidia chips represents a massive leap of faith that AI demand will justify the spending.

The risk isn't just financial—it's strategic. If AI adoption slows or hits technical barriers, the companies with the deepest AI investments could face the steepest falls.

The answer may determine not just Nvidia's future, but the trajectory of the entire tech sector.