--- title: "NVIDIA has been \"stagnating\" for months; can this week's \"most important financial report in the world\" make a difference?" description: "If performance cannot calm the restless market, the ensuing volatility may affect the AI sector and even the entire market" type: "news" locale: "en" url: "https://longbridge.com/en/news/276552229.md" published_at: "2026-02-23T01:26:32.000Z" --- # NVIDIA has been "stagnating" for months; can this week's "most important financial report in the world" make a difference? > If performance cannot calm the restless market, the ensuing volatility may affect the AI sector and even the entire market "If NVIDIA sneezes, everyone catches a cold," said Luke Rahbari, CEO of Equity Armor Investments. As the undisputed pillar of the U.S. stock market bull run over the past few years, NVIDIA's stock price has been stagnant for months. Since Q4 of last year, NVIDIA's stock price has only risen by 1.7%, underperforming the S&P 500 index's 3.3% increase during the same period; since the beginning of 2026, NVIDIA's return has fallen into the lower half of the S&P 500. This Wednesday, NVIDIA will announce its highly anticipated fourth-quarter and full-year earnings report. The consensus on Wall Street is that the performance will still be strong, even "crushing" analysts' expectations. However, against the backdrop of rising skepticism about AI and a turbulent macro environment, the real question is: **Is merely being "good" enough?** **** ## Can this week's "most important global earnings report" pull through? "From a fundamental perspective, NVIDIA's story remains strong; the question is whether market sentiment can keep up," said Matt Stucky, Chief Equity Portfolio Manager at Northwestern Mutual Wealth Management. Investors are facing a typical "expectation paradox." Although the market generally expects NVIDIA to raise guidance for the next few quarters, historical data shows that after the last two earnings reports, NVIDIA's stock price faced sell-offs. Rhys Williams, Chief Strategist at Wayve Capital Management, warned that the stock price could drop if the performance is "not good enough." > "Based on our observations, even if the official earnings report and guidance are fine, they may just not meet expectations." This dilemma is not unique to NVIDIA. The once largest contributors to the market, the "Magnificent Seven" tech giants, have collectively fallen nearly 1% since Q4 of last year, underperforming the S&P 500 index during the same period. Behind investors' cautious sentiment lies a profound anxiety about whether the hundreds of billions of dollars in AI capital expenditures (Capex) by these giants can translate into actual profits. Microsoft's stock price fell after it released strong earnings because investors were fixated on the slowing growth of Azure and record spending expectations. ## Macroeconomic Headwinds — When AI Meets a Complex 2026 In addition to internal valuation corrections within the industry, NVIDIA must also face a complex macro environment. The start of 2026 is filled with uncertainty. Geopolitically, the Trump administration's threats of attacks on Iran have left the market on edge; on the policy front, the Supreme Court has just struck down President Trump's tariff policy — although this is generally seen as a positive for U.S. companies, it has also made the future direction of the White House's economic policies murky. Economic data is equally mixed. Data released on Friday showed that economic growth is slowing while inflation remains stubborn. After experiencing a "soft 2025," the labor market shows signs of stabilization, which has led traders to bet that the Federal Reserve will take a cautious stance on further interest rate cuts In such a noisy macro environment, it is evident how difficult it is for NVIDIA to turn the tide with its financial report. ## Valuation Bottom or Value Trap? However, the prolonged stagnation over the past few months has not been without its benefits—it has squeezed out a lot of the excesses from NVIDIA. Currently, NVIDIA's forward price-to-earnings ratio has fallen below 24 times, close to a five-year low, and significantly lower than the five-year average of 38 times. Will McMahon, Chief Equity Strategist at MFA Wealth, believes that the relatively cheap valuation could serve as a catalyst for buying: > "People still see NVIDIA as the market savior, hoping it can calm the current market sentiment fluctuations." But a low valuation is merely a ticket to enter; to reignite the upward trend, CEO Jensen Huang must tell a compelling new story, especially regarding the **defensive battle for market share**. As AMD, Amazon, Broadcom, and Alphabet (Google's parent company) all launch "inference chips" for generating AI models, the competitive landscape is subtly changing. Alec Young, Chief Investment Strategist at Mapsignals, points out that NVIDIA's valuation multiples will continue to be compressed until the market is convinced that it can maintain its market share and order flow. Matt Stucky adds: "In the long run, the key to boosting sentiment lies in whether Jensen Huang can convincingly argue that NVIDIA will continue to dominate the 'inference market.' This is the core of its long-term logic." ### Related Stocks - [NVDA.US - NVIDIA](https://longbridge.com/en/quote/NVDA.US.md) - [SMH.US - VanEck Semiconductor ETF](https://longbridge.com/en/quote/SMH.US.md) - [NVDY.US - YieldMax NVDA Option Income Strategy ETF](https://longbridge.com/en/quote/NVDY.US.md) - [NVDQ.US - T-Rex 2X Inverse NVIDIA Daily Target ETF](https://longbridge.com/en/quote/NVDQ.US.md) - [QLD.US - ProShares Ultra QQQ](https://longbridge.com/en/quote/QLD.US.md) - [NVDD.US - Direxion Daily NVDA Bear 1X ETF](https://longbridge.com/en/quote/NVDD.US.md) - [XLK.US - Spdr Select Tech](https://longbridge.com/en/quote/XLK.US.md) - [NVDU.US - Direxion Daily NVDA Bull 2X Shares](https://longbridge.com/en/quote/NVDU.US.md) - [QQQ.US - Invesco QQQ Trust](https://longbridge.com/en/quote/QQQ.US.md) - [IXN.US - ISHRS S&P Glb It](https://longbridge.com/en/quote/IXN.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | NVDA Earnings, Tariffs and Other Key Things to Watch this Week | NVDA Earnings, Tariffs and Other Key Things to Watch this Week | [Link](https://longbridge.com/en/news/276540942.md) | | Wall St Week Ahead-Nvidia, software reports pose next tests for AI-sensitive stock market | Investors are looking ahead to Nvidia's fiscal Q4 results, which are expected to show a 71% rise in earnings per share. | [Link](https://longbridge.com/en/news/276531148.md) | | Empirical Financial Services LLC d.b.a. 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