After seeing the stock rise 171% in 2024 and another 39% in 2025, it’s understandable that NVIDIA (NASDAQ: NVDA) Investors would be a little disappointed with the stock’s performance so far this year. Nvidia shows gains of just 6% year over year, marking the stock’s worst performance so far since 2022.
I’ve had Nvidia for several years, so I follow the stock closely. And while I wish we’d see double-digit profits again this year, I’m actually not that focused on the stock price. Instead, there’s another number I keep in mind when considering my position in Nvidia stock.
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The biggest factor that will influence Nvidia stock comes from other tech companies: members of the “Magnificent Seven,” including Alphabet, microsoft, Amazonand Metaplatforms. Those companies have announced commitments to spend up to $700 billion on capital expenditures (capex) this year alone, with much of that money going toward infrastructure to build data centers and support the growth of artificial intelligence (AI) platforms.
Of course, not all of that will go to Nvidia. Capital spending goes into many areas, including land, structures, cooling systems and networking equipment. But one of the biggest expenses is hardware, including the graphics processing units (GPUs) that Nvidia is so well known for.
Nvidia’s market capitalization jumped to the largest in the stock market over the past two years as its GPUs took center stage in the growth of AI. Nvidia’s Hopper and Blackwell chips (the latter of which became available last year) are considered the gold standard for designing, training and operating high-level AI programs.
Additionally, Nvidia is launching its next-generation Rubin chips this year, which are even more powerful and efficient than Blackwell chips. The constant innovation of Nvidia chips helps ensure the company remains at the forefront of hardware and chip development.
The vast majority of Nvidia’s revenue comes from sales of data center chips. In the fourth quarter of fiscal 2026 (ending January 25), Nvidia reported $68.1 billion in revenue, up 73% from a year ago. Of those, $62.3 billion came from data center sales, a 75% increase from the previous year.
