Nvidia Stock Is Losing to the Market in 2026. Time to Walk Away or Double Down?

Since 2023, Nvidia (NASDAQ: NVDA) has been the stock to own. It crushed the market in 2023, 2024, and 2025. However, it's not looking so good in 2026.

As of this writing, Nvidia is up around 8.7% this year, while the market (as measured by the S&P 500) has risen 10.2%. That kind of underperformance is obviously disappointing to the countless Nvidia investors out there, and what makes it even more frustrating is that several other stocks, including rival Advanced Micro Devices, have had phenomenal years.

So, is it time to walk away from Nvidia and select a different artificial intelligence (AI) stock? Or is it time to double down on your investment in anticipation of a strong second half? Let's take a look.

Image source: The Motley Fool.

Nvidia's time is coming

Since the AI arms race began in 2023, Nvidia's GPUs have led the way as the top computing option. Nvidia's GPUs and the products that support them dominate the data center sector and are the top choice for nearly every company involved in AI. This level of dominance helped propel Nvidia to become the world's largest company by market cap, but there are some challenges looming ahead.

One threat could come from AI hyperscalers specializing in computing chips, as custom AI chips are starting to become a popular option. However, these chips require a workload to be properly configured to maximize their abilities, and that's not always possible. So, GPUs will remain a popular option.

With how bad Nvidia's stock has performed in 2026 (at least compared to the last three years' performance), investors may be surprised to see its rapid growth rates. During its past quarter, Nvidia's revenue increased at an 85% clip. That's not all, either, as Wall Street analysts expect 96% growth during Q2. Nvidia is still rapidly growing, making it a worthy investment, so why has the stock performed so poorly?

The most likely reason is skepticism of the AI build-out. The market isn't keen on the AI hyperscalers spending hundreds of billions of dollars on AI computing equipment, especially when a viable business hasn't been proven by any generative AI firm yet. However, Nvidia told investors last quarter that it expects AI hyperaccelerator spending to rise to over $1 trillion next year. I'm more inclined to believe Nvidia over the market's skepticism, as it likely has orders on the books for next year, so it can easily see the demand already.

As 2027 spending projections start to become apparent, I think Nvidia's stock will rally to close 2026. That makes right now the perfect buying opportunity, as the market isn't pricing any 2027 success into the stock, even if Nvidia says it's coming.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.