By Pia Singh
Publication Date: 2026-03-13 15:18:00
Investors appear to be underestimating hyperscalers’ artificial intelligence spending plans, and therefore missing out on the true value of Nvidia , according to Barclays. Nvidia has been trading sideways since December after the stock’s blockbuster performance in recent years, with the chipmaker’s shares down less than 1% year to date. A big reason behind Nvidia’s underperformance this year is due to the broader rotation away from megacap technology stocks, amid concerns about high valuations and the longer-term viability of AI infrastructure spending. Investors largely ignored Nvidia’s blowout earnings report and strong guidance it gave in late February. Barclays believes the flat performance in Nvidia is a buying opportunity, however. Based on their analysis of financials from AI leaders OpenAI and Anthropic published in The Information, Barclays analysts believe that the market is significantly underestimating how much tech hyperscalers, like Microsoft and Google parent Alphabet , will need to spend in the next few years. Consensus hyperscale capex is at least $225 billion “too low” in 2027 and 2028, analyst Tom O’Malley wrote in a Wednesday note to clients, saying that “the capex up-cycle lasts into at least 2028 and could also be magnitudes larger vs. consensus.” Nvidia is, however, currently trading as if capex levels were to hit a ceiling in 2027, he said. “When cycles peak, multiples reflect the potential for lower future earnings power, which suggests a reason…
