Forget Nvidia’s Stock Price. This Is the Number That Actually Matters.

After seeing the shares leap 171% in 2024 and one other 39% in 2025, it is comprehensible that Nvidia (NVDA +0.19%) Investors can be a bit of dissatisfied with how the inventory has carried out to this point this 12 months. Nvidia is displaying good points of solely 6% on the 12 months, marking the inventory’s worst efficiency to this point since 2022.

I’ve held Nvidia for a number of years now, so I watch the inventory carefully. And whereas I want that we have been seeing double-digit good points once more this 12 months, I’m actually not that targeted on the inventory worth. Instead, there’s one other quantity that I’m preserving in thoughts once I think about my place in Nvidia stock.

The $700 billion dedication

The largest issue that is going to affect Nvidia inventory comes from different tech corporations — fellow members of the “Magnificent Seven,” together with Alphabet, Microsoft, amazonand Meta Platforms. Those corporations have introduced commitments to spend as much as $700 billion in capital expenditures (capex) this 12 months alone, with a lot of that cash going towards infrastructure to construct information facilities and assist the development of synthetic intelligence (AI) platforms.

Not all of that can go to Nvidia, in fact. Capex spending goes to many areas, together with land, buildings, cooling techniques, and networking tools. But one in every of the largest bills is for {hardware}, together with the graphics processing models (GPUs) that Nvidia is so well-known for.

Nvidia’s market capitalization vaulted to the largest in the inventory market over the final two years as its GPUs took middle stage in the development of AI. Nvidia’s Hopper and Blackwell chips — the latter of which was simply made obtainable final 12 months — are thought-about the gold normal for designing, coaching, and working high-level AI packages.

In addition, Nvidia is rolling out its next-generation Rubin chips this 12 months, that are much more highly effective and extra environment friendly than the Blackwell chips. The fixed innovation of Nvidia chips helps be sure that the firm stays at the slicing fringe of {hardware} and chip improvement.

Today’s Change

(0.19%)$0.39

Current Price

$202.07

Key Data Points

Market Cap

$4.9T

Day’s Range

$197.84 – $202.16

52wk Range

$95.04 – $212.19

Volume

3.9M

Avg Vol

177M

Gross Margin

71.07%

Dividend Yield

0.02%

Nvidia by the numbers

The overwhelming majority of Nvidia’s income comes from its information middle chip gross sales. In the fourth quarter of fiscal 2026 (ending Jan. 25), Nvidia reported $68.1 billion in income, up 73% from a 12 months in the past. Of that, $62.3 billion was the results of data center gross sales — a rise of 75% from the earlier 12 months.

“Our customers are racing to invest in AI computing — the factories powering the AI ​​industrial revolution and their future growth,” CEO Jensen Huang mentioned.

Despite that fast development, Nvidia inventory is surprisingly inexpensive. The ahead price-to-earnings (P/E) ratio of 23.9 is much under the inventory’s three-year P/E imply of 79, indicating that the market continues to underestimate Nvidia’s future development.

NVDA PE Ratio (Forward) information by YCharts. PE Ratio = price-to-earnings ratio.

And that development might be dynamic. Huang, talking at the Nvidia GTC 2026 occasion, forecast that Nvidia might see $1 trillion in AI income by the 2027 calendar 12 months. Considering Nvidia acquired simply $215.9 billion in income for its 2025 calendar 12 months, such a projection signifies that Nvidia is in the center of a large development spree.

So, whereas it is all the time prudent to keep watch over the Nvidia inventory worth, it is not the largest quantity on my thoughts proper now. Instead, I’ll proceed to comply with the capex commitments of its main clients, resembling Alphabet, Amazon, Meta, and Microsoft, as I consider my place in Nvidia inventory.