USA NEWS TODAY : For months, the market has whispered about an “AI bubble,” yet NVIDIA Corporation (NVDA) continues to defy gravity. Trading at levels similar to early December 2025, some investors have grown impatient with the stock’s sideways movement. However, as we approach the monumental February 25th Q4 earnings report, the data suggests that Nvidia is not just weathering a trend—it is accelerating through it.
With a dominant 90% share of the AI accelerator market and hyperscalers entering a “leveraged” spending spree for 2026, the case for a $240+ price target is stronger than ever.
All Eyes on Q4: Crushing Estimates as Demand Compounds
The Street is braced for an enormous quarter. Consensus estimates for fiscal Q4 2026 project revenues reaching $65.68 billion (up 66.7% year-over-year) and EPS at $1.52 (up 70.8%). Nvidia’s own outlook is even more ambitious, targeting a gross margin of nearly 75%.
While skeptics wait for a slowdown, the ground-level data shows the opposite.
- Hopper is Still King: Despite the Blackwell ramp-up, rental prices for the older Hopper (H100) series saw a 10% price jump in early 2026. Hourly rates climbed from $2.00 to $2.20 in just four weeks—the largest short-term spike since mid-2025.
- Token Surge: Usage of AI tokens has surged recently, proving that generative AI is transitioning from “experimentation” to “scaled production.”
The 2026 Catalyst: The $650 Billion Hyperscaler Wave
The true “fuel” for Nvidia’s next rally isn’t just past performance; it’s the record-breaking capital expenditure (CapEx) plans from the “Big Four.” For 2026, Meta, Google, Amazon, and Microsoft are signaling a collective spend of approximately $650 billion—a staggering 60% increase from 2025.
Hyperscaler CapEx Projections for 2026:
| Company | 2026 Projected CapEx | Primary Focus |
|---|---|---|
| Amazon (AWS) | $200 Billion | AI Infrastructure, Chips, & Robotics |
| Alphabet (Google) | $175–185 Billion | TPU + GPU Expansion & Gemini App Scaling |
| Meta Platforms | $162–169 Billion | Meta Superintelligence Labs |
| Microsoft | $100+ Billion | Azure AI & OpenAI Infrastructure |
Roughly 75% of this spend is tied directly to AI infrastructure. As long as these tech giants view AI as a “winner-take-most” market, Nvidia remains the undisputed toll collector on the road to superintelligence.
Valuation: Is $240.57 Realistic?
My updated Discounted Cash Flow (DCF) model reflects improved long-term revenue growth driven by the “Rubin” architecture visibility and the continued Blackwell ramp.
- Intrinsic Value: I value NVDA at $240.57 per share.
- The “Blackwell” Factor: CFO Colette Kress recently highlighted a $500 billion opportunity through the end of 2026 for Blackwell and Rubin models.
- Competitive Moat: While AMD and custom ASICs are emerging, Nvidia’s CUDA software ecosystem continues to secure workloads, turning its hardware into a durable platform business.
“Blackwell sales are off the charts, and cloud GPUs are sold out,” — Jensen Huang, CEO of NVIDIA.
Risks: Bubble or Bottleneck?
No investment is without risk. The AI trade is increasingly about “invoices”—investors want to see if the Big Four are getting paid fast enough to justify the $650 billion bill. Furthermore, power grid delays and financing for smaller data center clusters could create turbulence.
However, Nvidia’s massive free cash flow and aggressive share repurchase program (with over $60 billion remaining in authorization) provide a significant buffer for shareholders.
Conclusion: Buy Before the Rally
Nvidia has spent the last few months consolidating, but the fundamental “virtuous cycle of AI” is only entering its next phase. With TSMC projecting 30% growth for 2026 and hyperscalers doubling down on GPU clusters, the February 25th earnings report could be the spark that ignites a move toward $240.
Peak AI? We haven’t even seen the plateau.
Would you like me to analyze the specific impact of the upcoming Blackwell Ultra release on Nvidia’s mid-2026 margins, or should I create a comparison of Nvidia’s P/E ratio against other “Magnificent Seven” stocks?