TLDR
- Goldman Sachs reaffirms Buy rating on NVIDIA with $250 target, anticipating strong quarterly results despite high market expectations
- Major tech companies collectively increasing AI infrastructure spending to $650 billion in 2026, up 70% from Wall Street’s original 19% estimate
- Amazon planning $200 billion capex, Google $180 billion, Microsoft $140 billion, and Meta $125 billion for AI infrastructure this year
- NVIDIA holds 80% market share in AI accelerators and captures 30% of total AI data center spending as profit
- Allianz Technology Trust lists NVIDIA as top holding at 10.1% of portfolio valued at £210.9 million
NVIDIA received a powerful endorsement this week as the world’s largest technology companies announced drastically increased artificial intelligence budgets for 2026.
The combined spending from Amazon, Google, Microsoft, and Meta will reach approximately $650 billion this year. That represents a 70% increase from original Wall Street projections of just 19% growth.
Goldman Sachs renewed its Buy rating on NVIDIA February 5 with a $250 price target. The firm expects the chipmaker to deliver a beat-and-raise quarter, though analysts note elevated expectations are already reflected in the share price.
The investment bank sees near-term growth tied to 2027 revenue visibility. Key catalysts include continued hyperscaler spending adjustments through next year and strengthening demand from AI firms like OpenAI and Anthropic.
Record Infrastructure Investments
Amazon leads with planned capital expenditures of $200 billion in 2026, jumping 56% from last year’s $128 billion. CEO Andy Jassy said the company is monetizing capacity as quickly as it can install it to meet AWS customer demand.
Google plans $180 billion in spending, nearly doubling its $91 billion from 2025. The company exceeded its initial $75 billion estimate last year by a wide margin. Cloud revenue backlog more than doubled last quarter on Gemini model demand.
Microsoft projects over $140 billion in fiscal 2026 spending, up 59% from $88 billion in fiscal 2025. CEO Satya Nadella announced plans to increase AI capacity by 80% this year and double total data center footprint over two years.
Meta plans $125 billion at the midpoint, rising 74% from $72 billion in 2025. CEO Mark Zuckerberg cited AI-driven growth across social platforms and advertising business.
NVIDIA’s Market Dominance
NVIDIA controls over 80% of the data center accelerator market. The company’s full-stack approach includes GPUs, CPUs, networking hardware, and CUDA software. This strategy allows NVIDIA to capture roughly 30% of total AI data center spending as profit, according to AllianceBernstein.
Networking revenue surged 162% in the latest quarter. The CUDA platform remains the industry standard for GPU-accelerated application development.
Allianz Technology Trust revealed NVIDIA as its largest portfolio holding at 10.11% as of January 31. The position totals £210.9 million within the trust’s £2.09 billion in gross assets.
Wall Street’s Consistent Underestimation
Analysts have repeatedly underestimated AI spending growth. The 2024 consensus forecast predicted 19% growth in hyperscaler capex, but actual spending jumped 54%.
In 2025, analysts projected 22% growth while actual spending soared 64% according to Goldman Sachs data.
The 2026 pattern mirrors previous years. Initial estimates called for 19% growth, now revised to 70% following the hyperscalers’ budget announcements.
NVIDIA shares traded at $182.81 on February 13, down 2.21%. The stock has climbed 1,180% since early 2023. Median analyst price targets of $250 suggest 33% upside potential.
