Investors Cautious on Tech Stocks in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 8h ago
0mins
Should l Buy NVDA?
Source: Yahoo Finance
- Tech Sector Weakness: As of February 4, 2026, large-cap tech stocks have declined approximately 3%, making them the worst-performing sector, reflecting investor concerns over high valuations and ineffective AI spending, which may increase the risk of a market correction.
- Microsoft's Financials: Microsoft reported a 66% year-over-year increase in capital expenditures in Q2 2026, although growth for its AI cloud engine, Azure, has slowed; however, its remaining performance obligation surged 110% to $625 billion, enhancing its appeal for long-term investors with a current P/E ratio of 26, below S&P 500 and Nasdaq-100 averages.
- Oracle's Upside Potential: Oracle's stock has even greater upside potential, with analysts projecting a price target of $272, indicating an 88% upside over the next 12 months; despite concerns over its AI spending, its $523 billion backlog has increased by 438% year-over-year, demonstrating robust market demand.
- Investor Risk Considerations: While Microsoft is rated a buy by 95% of analysts, Oracle is viewed as a higher-risk investment due to its debt and reliance on OpenAI, necessitating careful evaluation of its future profitability and market performance.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Financial Performance Highlights: Oracle's recent Q2 FY2026 earnings report revealed a 14% year-over-year revenue increase to $16.05 billion, with net income soaring 95% to $6.13 billion, including a $2.7 billion pre-tax gain, showcasing its strong growth potential in the cloud computing sector.
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- Oracle's Market Challenges: Oracle, with a market cap of $440 billion, has seen its stock drop over 52% since last September, primarily due to high spending on AI infrastructure and a debt exceeding $100 billion, raising concerns about its financial health among investors.
- Financial Performance Highlights: Oracle's recent Q2 FY2026 earnings report revealed a 14% year-over-year revenue increase to $16.05 billion, with net income soaring 95% to $6.13 billion, including a $2.7 billion pre-tax gain, showcasing its strong growth potential in the cloud computing sector.
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See More
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- Strong Debut Performance: Montage Technology's shares surged approximately 60% on their Hong Kong debut, climbing from the offering price of HK$106.89 to HK$171, indicating robust market demand for its high-performance semiconductors and reinforcing its position in the cloud computing and AI sectors.
- Significant Fundraising: The IPO raised $902 million, reflecting strong investor interest in Chinese AI and semiconductor firms, particularly as the public tranche was oversubscribed by more than 700 times and the international offering was nearly 38 times covered.
- Intensifying Market Competition: Despite Montage's successful listing, competition is heating up, with Huawei and its chip unit HiSilicon holding a leading share of the domestic market, suggesting that the push for self-sufficiency will lead to fiercer rivalry within the industry.
- Evolving Policy Landscape: As the Chinese government intensifies efforts for self-sufficiency in advanced chips, the recent approval for Nvidia's H200 imports under specific conditions highlights the uncertainty in policy that could impact market dynamics.
See More
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- Hardware Companies Surge: Companies like Nvidia, Broadcom, and Taiwan Semiconductor are profiting from AI demand, with Nvidia's GPUs being the preferred choice for AI workloads; AI spending is projected to reach $3 trillion to $4 trillion by 2030, indicating significant market potential.
- Cloud Computing Market Expansion: Major cloud providers such as Amazon, Google, and Microsoft are heavily investing in data centers to meet the demand for computing power from AI developers, with Microsoft Azure achieving a growth rate of 39% in Q2 FY 2026, showcasing its competitive edge in the market.
- Recurring Revenue Stream: The rental model of cloud computing provides these companies with a continuous revenue stream; while they need to regularly replace computing units, the initial investment in infrastructure is already covered, leading to a substantial increase in future profitability.
- Intensifying Market Competition: As AI hardware and cloud computing rapidly evolve, competition among related companies will intensify, prompting investors to monitor these firms' performance in technological innovation and market share.
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- Future Growth Potential: The company expects to generate $1 billion in discretionary free cash flow in 2026, with 50% to 60% earmarked for unit repurchases, which could further enhance distribution per unit for remaining investors and increase shareholder value.
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- Market Demand Growth: AI computing hardware demand is expected to surge through 2030, with cloud computing companies being key drivers, indicating that AI remains a leading investment theme attracting significant capital inflows.
- Hardware Investment Opportunities: Companies like Nvidia, Broadcom, and Taiwan Semiconductor are excelling in the AI hardware space, with Nvidia's GPUs widely used for AI workloads, known for their high performance despite higher costs, while Broadcom's ASIC designs offer more cost-effective solutions, with AI semiconductor revenue expected to double by Q1 2026.
- Cloud Computing Infrastructure: Amazon, Google, and Microsoft are the major cloud providers, with Microsoft Azure achieving a 39% growth rate in Q2 FY 2026; although AWS is growing slower, all three are actively investing in data centers to meet rising demand, ensuring a continuous revenue stream.
- Long-Term Investment Potential: With AI spending projected to reach $3 trillion to $4 trillion by 2030, the combination of cloud computing and AI hardware presents enormous long-term return potential for investors, especially as infrastructure builds out, significantly enhancing profitability.
See More
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- Signs of DaVita's Recovery: DaVita exceeded expectations in its latest quarterly results and projected earnings per share between $13.60 and $15 for 2026, with shares surging over 30% since the earnings release, presenting an opportunity for investors to reassess its value, especially as it historically traded at 13 to 14 times forward earnings.
- Investment Opportunity in Kraft Heinz: Despite Berkshire's losses in Kraft Heinz, the stock currently trades at a mere 9 times forward earnings, below peers, and the company's plan to split into two entities could unlock significant value, attracting new investors' interest.
- Cautious Approach to UnitedHealth Group: Although Berkshire purchased 5 million shares of UnitedHealth last year, the stock has dropped from $350 to around $280 due to lower-than-expected Medicare payment increases, with a current P/E ratio of 16, which is still above peers, prompting investors to consider their buying strategy carefully.
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