NEW YORK, July 26, 2026, 10:08 a.m. EDT
- Nvidia finished Friday down 0.9% at $206.84, but posted a 2.0% increase for the week.
- The stock’s one-month performance outpaced the chip index by 13 percentage points.
- Microsoft and Meta are scheduled to release results on Wednesday, with Amazon set to report on Thursday.
U.S. markets did not open on Sunday. Nvidia comes into Monday following a Korean AI initiative valued at more than $500 billion. However, shifts in customer cash flow might be an even bigger driver for the stock.
The difference is significant as the deal covers a lengthy period. The announcement referred to letters of intent and did not reveal specifics about Nvidia’s revenue timeline or allocation.
SK Telecom KRX:017670 intends to build a two-gigawatt AI factory powered by Vera Rubin systems. SK hynix KRX:000660 is set to provide and collaborate on high-bandwidth memory. The initial facility is scheduled for completion in 2027.
Chief Executive Jensen Huang stated that the partners were developing “a new generation of AI factories.” The announcement came following the close of Friday’s regular trading. Markets will react in earnest on Monday. NVIDIA Newsroom
Nvidia shares rose 5% in the past month, far outpacing the PHLX Semiconductor Index (INDEXNASDAQ:SOX), which declined by 8%. The stock’s latest moves establish lofty expectations.
The 13-point gap stands out as the key indicator for investors. It points to Nvidia breaking away from the broader semiconductor cycle. The stock is increasingly seen as a gauge of trust in spending on AI infrastructure.
That divergence was highlighted again on Friday. Nvidia slipped 0.9% to $206.84, although it posted a 2.0% gain for the week. The Nasdaq Composite declined 2.1%.
The next test is scheduled for Wednesday and Thursday. Microsoft NASDAQ:MSFT and Meta Platforms NASDAQ:META are set to release results on July 29. Amazon.com NASDAQ:AMZN will report on July 30.
Alphabet NASDAQ:GOOGL highlighted the importance of cash conversion. Google Cloud revenue climbed 82% to reach $24.8 billion. However, Alphabet reported a free cash flow burn of $5.9 billion.
The company increased its expected capital spending for 2026 by $15 billion. Shares dropped roughly 6% early on Thursday. Robust AI demand was insufficient.
“Following a quarter with negative cash flow, Alphabet’s decision to increase capital expenditure is concerning,” said Thomas Monteiro, senior analyst at Investing.com. Reuters
| Nvidia demand proxy | Earnings timing | Latest demand marker | Latest cash or capex marker |
|---|---|---|---|
| Alphabet | Announced July 22 | Cloud segment posted an 82% increase to $24.8 billion | Quarterly free cash flow was minus $5.9 billion; capex outlook for 2026 at $195 billion-$205 billion. |
| Microsoft | July 29 | AI recurring revenue for the year topped $37 billion | Capex for the quarter reached $31.9 billion; free cash flow totaled $15.8 billion. |
| Meta | July 29 | First-quarter sales advanced 33% | Capex forecast for 2026 was lifted to $125 billion-$145 billion. |
| Amazon | July 30 | AWS revenue climbed 28% to $37.6 billion | Trailing free cash flow dropped to $1.2 billion as AI investments ramped. |
Nvidia is most affected by how Microsoft allocates its spending. About two-thirds of last quarter’s capital expenditures went toward assets with brief lifespans, primarily GPUs and CPUs.
Microsoft produced $15.8 billion in free cash flow. If Nvidia reports a comparable figure next week, it would help justify its high valuation. However, an increase in capital expenditures without a corresponding rise in cash could undermine it.
Meta’s trial involves component inflation. The company increased its annual capex forecast by $10 billion at the midpoint, with elevated component costs making up a substantial share of the rise.
Amazon reported trailing free cash flow of $1.2 billion, attributing the decline to a $59.3 billion rise in annual property acquisitions. The majority of these expenditures were related to AI investments.
Nvidia’s exposure remains focused. Its Data Center unit generated $75.2 billion from the company’s $81.6 billion in revenue for the first quarter, accounting for roughly 92% of overall sales. Nvidia is scheduled to release its next report on August 26.
Potential risks are reduced customer spending, the emergence of custom accelerators, and a decline in free cash flow. On the upside, more rapid growth in cloud services and stable cash conversion represent key positive risks.
The clearest sign for bulls is not a bigger capital expenditure projection. Rather, it’s a boost in AI investment along with increased cash flow. This pairing would support Nvidia maintaining its 13-point advantage heading into earnings in August.
