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Key Takeaways
- Goldman Sachs has maintained a Buy rating for Nvidia with a $250 price target, expecting a beat-and-raise quarter while noting high expectations are already priced in
- Allianz Technology Trust revealed Nvidia as its largest holding at 10.1% of the portfolio worth GBP210.9 million as of Jan. 31, 2026
- Four major hyperscalers (Google, Amazon, Meta, and Microsoft) now project combined AI infrastructure spending of $650 billion in 2026, up 70% versus initial Wall Street estimates of 19%
- Amazon leads spending plans at $200 billion, followed by Google at $180 billion, Microsoft at $140 billion, and Meta at $125 billion for 2026
- Nvidia captures approximately 30% of total AI data center spending as profit due to its full-stack strategy including GPUs, networking, and CUDA software
Nvidia seemed to receive fresh validation this week as 4 of the world’s largest technology companies announced massive increases to their artificial intelligence infrastructure budgets for 2026.
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The spending surge has far exceeded Wall Street’s initial projections. Analysts originally estimated a 19% increase in AI hyperscaler capital expenditures for 2026. The revised figure now stands at 70%, pushing total spending to roughly $650 billion.
Goldman Sachs renewed its Buy rating for Nvidia on Feb. 5 with a $250 price target. The firm expects a beat-and-raise quarter from the chipmaker, though it also acknowledged that high expectations have already been built into the stock price.
The investment bank stated it believes near-term stock growth will depend on visibility into 2027 revenue. Potential catalysts include continued positive adjustments to hyperscaler spending through 2027 and growing confidence in demand from AI companies like OpenAI and Anthropic.
Tech Giants Open Their Wallets
Amazon has been leading the pack with planned capital expenditures of $200 billion in 2026, up 56% from $128 billion in 2025. CEO Andy Jassy stated that customers want AWS for core and AI workloads, adding that the company is monetizing capacity as fast as it can install it.
Google has followed closely behind with $180 billion in projected spending, nearly doubling its $91 billion from 2025. The company initially estimated $75 billion in spending last year, but it has exceeded that figure by a wide margin. Cloud revenue backlog more than doubled in the fourth quarter on strong demand for Gemini models.
Microsoft has been on pace to spend more than $140 billion in fiscal 2026, representing a 59% increase from $88 billion in fiscal 2025. CEO Satya Nadella said the company will increase AI capacity by over 80% this year and roughly double its total data center footprint over the next two years.
Meta Platforms has planned to invest $125 billion at the midpoint in 2026, up 74% from $72 billion in 2025. CEO Mark Zuckerberg said AI investments are driving meaningful growth across its social media platforms and advertising business.
Nvidia’s Profitable Position
Meanwhile, Nvidia has continued to dominate the market for data center accelerators with more than 80% market share. AllianceBernstein estimated the company has captured 30% of total AI data center spending as profit.
The company’s advantage extends beyond its graphics processing units. Nvidia offers a complete solution for AI infrastructure that includes CPUs, networking equipment, and software tools. Networking revenue alone jumped 162% in the most recent quarter.
The CUDA software platform has remained the industry standard for developing GPU-accelerated applications. This full-stack approach allows Nvidia to capture a substantial portion of overall data center capital expenditures.
Allianz Technology Trust disclosed Nvidia as its largest holding at 10.11% of its portfolio as of Jan. 31, 2026. The position is valued at GBP210.9 million within the trust’s GBP2.09 billion in total gross assets.
Historical Underestimation Pattern
Wall Street has consistently underestimated AI spending growth in recent years. The consensus forecast predicted AI hyperscaler capital expenditures would increase 19% in 2024, but actual spending soared 54%.
The pattern repeated in 2025. Analysts predicted a 22% increase, while actual spending jumped 64%, according to Goldman Sachs. The 2026 projections appear to be following the same trajectory. The initial 19% estimate has been revised upward to 70% as the four hyperscalers announced their expanded budgets.
Nvidia shares closed at $182.81 on Feb. 13, 2026, down 2.21% for the day. The stock has gained 1,180% since early 2023. The median analyst price target of $250 per share implies 33% upside from recent levels.
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