Nvidia Isn’t the Most Valuable Company in the World Anymore. Is More Bad News Coming?

Key Points

• Chip stocks are down on market worries about AI spending.

• Nvidia should enjoy the fruits of AI spending, since its products are the gold standard for AI development.

• The market is souring on Nvidia, and investors should temper their expectations for Nvidia stock in the near term.

• 10 stocks we like better than Nvidia ›

Nvidia (NASDAQ: NVDA) was a relatively obscure chipmaker specializing in gaming technology before artificial intelligence (AI) exploded a few years ago, sending the stock to the No. 1 spot as the world’s most valuable company. It held on to that title for most of 2025 as Nvidia enjoyed outstanding growth, while the next-most-valuable company, Apple, struggled to gain traction in AI.

However, Apple stock is back in the market’s favor, gaining 27% over the past three months, while Nvidia stock has dropped 8%. Apple is now back in the world’s most-valuable-company slot.

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As the market hears more updates from the largest tech companies, is there more bad news on the way for Nvidia?

High AI spend is good for Nvidia

AI chip stocks have been plummeting recently as the market prices in worries about AI spending and how long the cycle can last. However, while companies like Alphabet and Amazon continue to spend lavishly on upgrading their AI platforms, with both companies planning to spend around $200 billion in 2026 alone, the updates are actually a good sign for Nvidia.

Image source: Nvidia.

Nvidia works with both Amazon and Alphabet, as well as nearly every major AI company. Both clients, for example, make some of their own AI chips, but they also contract with Nvidia to offer their cloud clients the best available AI development platform. Nvidia is the gold standard, and while Amazon’s chips offer budget options and Alphabet’s Tensor Processing Units (TPUs) offer specialized task efficiency, Nvidia offers the most powerful capabilities. As these companies invest, a large chunk goes to Nvidia.

Nvidia’s CEO Jensen Huang noted that total AI spend is expected to be $1 trillion next year and $3 trillion to $4 trillion by the end of the decade. He thinks that Nvidia will generate $1 trillion in revenue from 2025 through 2027 from the Blackwell and Rubin lines alone, and every time a hyperscaler announces greater investments in AI infrastructure, investors should envision some of that landing on Nvidia’s doorstep.

Why Nvidia stock is dropping anyway

Although Nvidia should enjoy continued growth if AI spending stays strong, the market is worried that this can’t continue. A separate but connected piece for Nvidia is that revenue growth is accelerating right now, but as soon as that slows down, the stock won’t be worth quite as much. On a price-to-sales basis, Nvidia stock trades at 19 times trailing-12-month sales.

Nvidia may continue to face pressure as the market weighs the future of AI, and investors should temper their expectations in the near term.

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Jennifer Saibil has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Nvidia. The Motley Fool has a disclosure policy.