Nvidia Stock Rebounds: What’s Behind the Recovery?

According to Barron's, investors in Nvidia (NVDA-US) may have expected Meta (META-US) and Microsoft (MSFT-US) to commit to higher AI capital expenditures. Nevertheless, Nvidia's stock showed signs of recovery on Thursday (30th), rising 2.7% to close at $195.04.

Peers in the chip sector also gained: Intel (INTC-US) surged 11.3%, and AMD (AMD-US) climbed 13%.

This rally stemmed from a broad rebound in semiconductor stocks. The tech-heavy Nasdaq Composite Index rose 2.8% on Thursday, while the Philadelphia Semiconductor Index surged 8%.

Ahead of earnings season, the market had anticipated that large tech companies' massive capital expenditures would be a key support for semiconductor stocks. However, market movements have not fully aligned with these expectations.

Microsoft decided to keep its full-year 2026 capital expenditure flat—a rare move among tech giants—and investors responded positively to this more restrained approach.

Meta, meanwhile, only raised the lower end of its capital expenditure forecast, now expecting 2026 spending to reach $130 billion to $145 billion, up from the previous lower bound of $125 billion.

In contrast, Alphabet (GOOGL-US) increased its capital expenditure forecast from $180–190 billion to $195–205 billion, yet its stock was punished by the market.

Nonetheless, chip stocks have not moved exactly as initially expected. After Alphabet announced its higher capex guidance, the Philadelphia Semiconductor Index declined for five consecutive trading days. Now, with Meta and Microsoft demonstrating relatively restrained capex strategies, the index may be ending its downturn with a strong rebound.

For Nvidia, the stock recovery may not depend entirely on big tech earnings or AI spending levels.

Currently, Nvidia’s stock appears quite cheap. According to Dow Jones market data, Nvidia’s estimated P/E ratio is around 17.5x—the lowest since April 1, 2015. A rebound in Nvidia’s share price may simply be a matter of time.