Amazon and friends raise capital spending as Nvidia sales explode

Nvidia has added $1 trillion in value over just eight weeks, recovering sharply after a rocky start to 2025. Investors who panicked earlier this year are now chasing the rally as key worries — including US restrictions on chip exports to China, slowing AI investment, and Blackwell chip supply concerns — have cooled off.

According to Bloomberg, Nvidia’s recent earnings report addressed all three, easing pressure on the company and reopening the door to more bullish bets.

Thomas Martin, a senior portfolio manager at Globalt Investments, said plainly: “Those questions have been answered in the positive for Nvidia. It’s time to ramp back up your ownership.”

The stock had crashed in early 2025 due to anxiety over President Donald Trump’s renewed trade policies and fears that core customers might pause their spending.

Since bottoming out in April, Nvidia has gained more than 45%, pushing its market value to $3.4 trillion — just below Microsoft’s.

Amazon and friends raise capital spending as Nvidia sales explode

The AI boom that powered Nvidia’s rise in the last two years is far from done. Four tech giants — Amazon, Microsoft, Meta, and Alphabet — account for more than 40% of Nvidia’s total sales. All four are still pouring cash into building out their data centers. Their combined capital expenditures are forecasted to reach $330 billion by 2026, up 6% from current estimates.

Amazon’s cloud division made it clear on Friday that expansion remains a priority. That comment lines up with remarks from Samuel Rines, a macro strategist at WisdomTree, who said, “We just haven’t seen any kind of slowdown in AI spending, and so long as capex keeps moving up, we’re unlikely to see the cycle rollover or Nvidia experience much compression to its multiple.”

Rines also thinks the stock is still cheap, predicting its price-to-earnings ratio could jump into the high 30s or low 40s if momentum holds. Even after gaining a trillion, Nvidia’s valuation is still under 29x forward earnings, which is lower than its 10-year average of 34x.

For comparison, the Nasdaq 100 trades at 26x despite far weaker growth projections. The company’s PEG ratio — used to weigh price against growth — is under 0.9, the lowest among the Magnificent Seven: Apple, Tesla, Amazon, Meta, Alphabet, and Microsoft.

Wall Street holds back as under-ownership adds fuel

The stock is not overbought yet. Only 74% of long-only investment funds hold Nvidia, putting it behind Amazon, Apple, and Microsoft, which leads with 91% ownership. That leaves a lot of room for fresh inflows if more institutions jump back in.

Out of the 78 analysts covering Nvidia, eight rate it a hold and only one calls it a sell. The average target price is $170, pointing to another 24% upside from Monday’s close.

There’s still risk though. Thirteen percent of Nvidia’s revenue in Q1 came from China, and most of its chips are built abroad, which leaves it exposed to any new tariffs. But Nvidia has started securing deals with governments in the Middle East to offset potential losses.

Analysts also say its product roadmap is years ahead of rivals, giving it breathing space even if the US-China standoff worsens.

Angelo Zino, a senior equity analyst at CFRA Research, said the recent rebound has also left many investors scrambling to get back in. “There were a lot of investors that really got out of this market prematurely, and now they’re kind of being forced back into it,” he said. The quick reversal in sentiment is fueling even more buying.

Meanwhile, Microsoft has been climbing too. The company is once again the most valuable in the world. Shares of the software giant are inching closer to an all-time high after strong sales and profit numbers in fiscal Q3 surprised investors.

As of now, Nvidia is still 8% below its January record, but with money still flowing into AI and big tech not slowing down, the market believes it hasn’t hit its ceiling yet.

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