Nvidia Stuck While AI Spending Hits $600B: When Will the Money Pay Off?

$600 billion is flooding into AI this year alone. That's how much Big Tech—Meta, Alphabet, Microsoft, and Amazon—plans to spend on AI infrastructure in 2026. Yet here's the puzzle: Nvidia, the company that should benefit most from this spending spree, has barely budged for six months.

The Disconnect That's Puzzling Wall Street

Nvidia shares have gained just under 2% since August, while TSMC surged 52% and AMD climbed 12% over the same period. Friday's nearly 2% drop only added to investor frustration.

The numbers don't seem to add up. Nvidia still dominates AI chip demand. Revenue projections remain well above rivals. So why is the stock stuck?

The Reality Check Investors Are Having

"There is perhaps growing concern that the ultimate revenue from AI will simply not keep up with the capex spend that's been announced," JoAnne Feeney at Advisors Capital Management told Bloomberg.

Investors are doing new math. Nvidia now trades at roughly 24 times projected profits—roughly in line with the Nasdaq 100. That's actually a discount by historic standards for a high-growth AI stock.

UBS analysts warned that "capex growth is likely to moderate from these levels," which could slow orders for data-center chips. After years of accelerated spending, the pace might be cooling.

Competition Heats Up

Google's TPU teams and startups developing AI processors are creating alternatives to Nvidia's dominant GPUs. The monopoly that seemed unshakeable is facing new pressure.

Meanwhile, companies are questioning returns on their massive AI investments. Building expensive facilities and power infrastructure takes time to pay off—if it pays off at all.

The Earnings Test

Nvidia's next quarterly report on February 25th could break the stalemate. UBS analyst Timothy Arcuri remains bullish: "Given middling stock performance, supply chain signals that remain bullish, and a management team that seems frustrated with the prevailing doubts around growth and margin sustainability, the earnings set-up here seems positive."

But investors want more than promises. They want proof that this $600 billion AI spending spree will generate real returns.