NVIDIA's stock has been stagnant for months. Can tonight's opening of GTC turn the tide?
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Nvidia is standing at a critical juncture: most analysts are optimistic about its fundamentals, but the stock's performance this year has been lackluster, and market doubts persist. The annual GTC conference opens this week, providing the AI chip giant with the best window to reignite investor confidence.
The GTC 2026 conference will be held from March 16-19, 2026. Jensen Huang will deliver a keynote speech from 11:00-13:00 Pacific Time on March 16 (02:00-04:00 Beijing Time on March 17).
What investors care most about are the company's strategic plans for inference chips, the latest chip roadmap, and the outlook for wafer, memory, and optical device supplies. This information will directly affect the market’s judgment on whether Nvidia can continue to lead in the AI spending wave.
Bank of America believes that the market’s concerns over the sustainability of hyperscale cloud providers’ capital expenditures, coupled with geopolitical uncertainties, are the core reasons for Nvidia’s sustained valuation pressure. Even sales outlooks at GTC that fit consensus expectations, if they include concrete supply and demand visibility details, could be enough to support a temporary stock price recovery.
However, UBS, while optimistic about Nvidia’s fundamentals, notes that it is "difficult to foresee" a surge in share price triggered by comments at this conference that would "change the investment logic". The bank also acknowledges the contrast between Nvidia's bright earnings expectations and its discounted valuation, which appears to be in a "seemingly unsustainable" state.
Behind the sluggish stock price: "Normalization" of valuation and the gap in growth expectations
After a cumulative 22,000% rise over ten years, Nvidia’s stock has stalled this year, with some investors beginning to question whether its next stage of growth can sustain previous momentum.
From a valuation perspective, Nvidia currently trades at 17 times next fiscal year’s expected earnings, below the overall valuation level of the S&P 500 index. According to FactSet data, of the 70 analysts covering Nvidia, 93% give a buy rating, with an average target price of about $267.
Free cash flow forecasts show Nvidia’s free cash flow for this fiscal year (ending January 2027) is expected to grow 85% year-on-year to over $178 billion, with acceleration compared to last fiscal year. If realized, it will set a new global record for corporate free cash flow.
By the next fiscal year, this figure is expected to further rise to $233 billion. However, the range of current forecasts varies by $98 billion at the high and low ends, reflecting considerable uncertainty in the market about Nvidia's future profitability.
GTC core highlights: Entering the AI inference market
Wallstreetcn previously published an article, stating the most noteworthy aspect of GTC is Nvidia’s strategic shift from training to inference and its supply chain adjustment. It may announce a major entry into the AI inference market by integrating Groq technology; on the manufacturing side, Samsung may be introduced for the first time to break TSMC's monopoly, and OpenAI is expected to become one of the first major clients.
Bank of America Securities expects Nvidia will showcase a new generation of product lineup at the GTC keynote, including the language processing unit (LPU) rack system integrated with Groq technology, new-generation high-speed switches, and co-packaged optics (CPO) solutions, with the possibility of jointly launching custom x86 processors with Intel.
In recent years, AI chip spending has mainly focused on training scenarios, which rely heavily on the large-scale parallel computing that GPUs excel at. This explains why Nvidia, with GPU technology originally designed for gaming graphics rendering, has taken a dominant position in the AI infrastructure market.
However, the decoding scenarios in the inference process create demand for specialized chips that are not GPUs. To fill this gap, Nvidia spent about $20 billion last year to acquire the language processing unit (LPU) technology and related talent from private company Groq, which specializes in designing chips for inference decoding scenarios.
It is expected that Jensen Huang will elaborate at this GTC on how Nvidia will integrate LPU into its chip portfolio to fully cover training, pre-fill, and decoding applications, while also defending against competition from hyperscale cloud providers' self-developed chips.
Capital expenditure wave: AI infrastructure investment continues to climb
Nvidia’s performance outlook largely depends on the continued ramp-up of AI infrastructure investment by hyperscale cloud providers such as Amazon and Microsoft.
For example, Amazon's capital expenditure was in the range of $50-$60 billion annually from 2021 to 2023, but this year it is expected to surge to $190 billion, with almost all incremental spending directed at AI infrastructure construction, including massive purchases of Nvidia chips.
Barclays released a forecast last week that overall capital expenditures in the AI sector will peak at around $1 trillion in 2028, before "moderate declines". The bank also believes that market consensus for hyperscale cloud providers’ 2028 capital expenditures is underestimated by about $300 billion.
How will the market react to GTC? Wall Street is divided
Wall Street is divided on whether the current GTC can spur a substantial breakout in the stock price.
Bank of America believes that the market’s doubts about the sustainability of hyperscale cloud providers’ capital spending, combined with geopolitical uncertainties, are key reasons for Nvidia’s sustained valuation pressure. Even sales outlooks at GTC that fit consensus expectations, if they include concrete supply and demand visibility details, could be enough to support a temporary stock price recovery.
While UBS is optimistic about Nvidia’s fundamentals, it notes that it is "difficult to foresee" a surge in share price triggered by conference statements that change the investment logic. The bank also admits the contrast between Nvidia's strong earnings outlook and its discounted valuation appears "seemingly unsustainable".
In other words, the market doesn’t doubt Nvidia’s fundamentals, but is waiting for a clear signal strong enough to dispel doubts and reset expectations. Jensen Huang's speech this week is the most important opportunity in the near term.
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