NEW YORK, Feb 8, 2026, 04:29 EST
- Nvidia paced Friday’s surge in chip stocks, with traders zeroing in again on AI data-center demand.
- Hardware suppliers are seeing gains from big tech’s ramped-up spending, despite lingering doubts among investors about the payoff.
- Nvidia’s recent dip? Most analysts are calling it a valuation reset rather than any signal that growth has stalled.
Friday saw Nvidia shares jump, dragging chip stocks up with them after investors seized on new signals that big tech isn’t letting up on spending for artificial intelligence hardware.
The rebound stands out, with investors watching as AI-driven stocks swing sharply once more. Wall Street faces a tricky puzzle here: cloud giants are still ramping up their spending, yet shareholders are increasingly restless, waiting for those investments to actually deliver returns.
Nvidia’s right at the center of all that. The company sells the GPUs driving a huge chunk of today’s AI workloads, and its stock? For many, it’s the pulse check on whether this boom is still broadening or just seeing more selective pricing.
The rally arrived even as AI-tied software and data stocks were slogging through a tough patch, pressured by concerns that fresh AI tools might pinch margins and ramp up competition.
The Dow pushed past 50,000 for the first time on Friday, fueled by a 7.8% rally in Nvidia. The PHLX semiconductor index surged 5.7%. Advanced Micro Devices and Broadcom notched solid advances as well. “There’s enough evidence that there’s real demand for AI products,” said Ross Mayfield, investment strategy analyst at Baird, who also noted that buyers tend to step in when selloffs hit a floor. 1
The noise around big tech’s next act keeps ramping up, with plans for a $600 billion AI spree by 2026 drawing sharper focus. Reuters flagged the spending binge, which stirs up profit worries even as it’s a clear win for hardware names. “It got too pricey,” said Andrew Wells, chief investment officer at SanJac Alpha, summing up the AI trade as investors step back to “de-risk.” Nvidia’s Jensen Huang, talking to CNBC, called the demand “sky-high” and said the spending boom isn’t letting up, according to Reuters. 2
Investopedia, summarizing Friday’s action, noted Huang told CNBC that demand is “going through the roof,” and described the AI sector as approaching an “inflection point” with adoption catching on. Citing estimates, Investopedia pointed out that Amazon, Meta, Microsoft, and Google parent Alphabet are eyeing roughly $650 billion in planned 2026 spending—a figure that has investors weighing potential returns against those hefty investments. 3
Valuation talk is starting to rival the focus on spending figures. The Motley Fool, in a Feb. 7 piece, pointed out that Nvidia’s shares are sitting at roughly 25 times forward earnings—a price-to-earnings yardstick keyed to forecast profits. That’s similar to where the stock stood last spring, before a strong run-up as sentiment shifted. 4
Nvidia’s been stuck in a band between $150 and $200 since last summer, according to a Seeking Alpha piece from Feb. 6, which pegged the stock at about 23x 2027 forward earnings. The analyst described the sideways move as “healthy,” but stuck with a Hold. They pointed to a couple of key internal metrics to monitor: Days Sales Outstanding—how fast Nvidia is getting paid—and free cash flow margins, essentially what’s left after covering ops and investments. 5
There’s also a bullish angle centered on the upcoming phase of the product cycle. Insider Monkey, quoting Wolfe Research, noted the firm stuck with its Outperform rating, saying Nvidia’s valuation now looks “compelling” and predicting a “clear path” to higher numbers for 2026 and 2027. That’s riding on stronger unit growth and better pricing as the Rubin platforms roll out. Wolfe emphasized the call comes down to its “view of fundamentals,” not just seasonal moves. 6
The risk is hard to ignore: should cloud providers fail to deliver solid returns, that spending wave could dry up quickly. A few customers are already starting to move in-house, trimming reliance on external vendors. Despite recent declines, Nvidia’s lofty valuation still banks on years of robust growth—hardly any buffer if demand slips, margins narrow, or cash generation falters.
Nvidia drops earnings on Feb. 25, with investors eyeing guidance, updates on data-center demand, supply issues, and how fast the next-gen products are coming. U.S. markets are shut Sunday, so for now, the back-and-forth plays out in commentary until fresh numbers hit. 7
