Nvidia up 12% in 2026, barely keeping pace with S&P 500 despite record $81.6B revenue

Nvidia's 12% gain in 2026 marks a dramatic deceleration from the stock's prior performance, where it jumped 239% in 2023, 171% in 2024, and 39% in 2025. The slowdown comes despite the company reporting record quarterly revenue of $81.6 billion in its fiscal 2026 second quarter, with 85% year-over-year growth driven by hyperscalers' continued aggressive investment in AI data center infrastructure. The divergence between operational strength and stock performance suggests that investors have begun pricing in longer-term concerns about the durability of Nvidia's AI boom.

Two factors appear central to this repricing. First, major cloud providers and hyperscalers—Nvidia's largest customers—are actively developing custom silicon to reduce their reliance on Nvidia's GPUs. While demand remains robust today, this represents a structural threat to Nvidia's moat over the coming years. Second, sell-side analysts now expect revenue growth to decelerate to 219% between fiscal 2026 and fiscal 2029, a substantial slowdown from the 700% growth achieved in the prior three years. Both developments signal that the market views the extraordinary growth phase as finite. Management, through CFO Colette Kress, has noted that AI infrastructure spending is on track to reach $3 trillion to $4 trillion annually by decade's end—a large number, but one that implies a maturation of the market rather than perpetual acceleration.