Gabelli Funds portfolio manager John Belton says recent model releases from Meta Platforms Inc. and Space Exploration Technologies Corp’s xAI suggest Nvidia Corp.’s competitive moat remains firmly intact despite rising fears over custom silicon. Belton pointed to Meta’s Muse Spark 1.1 and xAI’s Grok 4.5 as evidence that frontier AI developers continue to rely on Nvidia’s infrastructure to train their most advanced models. He noted that both models were trained on Nvidia infrastructure, indicating a clear value proposition for the chipmaker's stack.

The AI Race Runs on Nvidia

The observation addresses investor concerns regarding how long Nvidia can maintain leadership with hyperscalers including Meta, Alphabet Inc., Amazon.com Inc., and Microsoft Corp. investing heavily in custom AI chips. While in-house silicon efforts expand, Belton argues the latest generation of frontier models shows Nvidia remains the platform of choice for the industry’s most demanding AI workloads. He added that fragmentation in the large language model space is beneficial for Nvidia, as a winner-take-all market would be less attractive over the long run.

Hyperscaler Spending Visibility

Belton also highlighted reports suggesting Meta’s AI infrastructure spending in 2027 could exceed Wall Street expectations. This reinforces the view that the hyperscaler capital expenditure cycle is far from over. Hyperscalers account for roughly 50% of Nvidia’s business, according to Belton. While the market has raised concerns about revenue durability due to hyperscalers operating around break-even free cash flow, Meta’s expanding ambitions provide greater near-term visibility into AI spending.

Peer Valuation Context

Separately, Bank of America has previously reiterated a Buy rating on Nvidia with a price target of $350, citing a 78% upside potential. The firm noted Nvidia trades at a valuation discount to mega-cap peers despite forecasting gross margins in the mid-70% range. BofA expects Nvidia to maintain a 65-70%+ share of the global AI accelerator market through calendar year 2030.

NVIDIA Corp. stock fell more than 1% in Monday's premarket session as investors trimmed exposure to high-growth technology stocks. Nasdaq futures dropped 1.12%, while S&P 500 futures declined 0.39%, applying pressure to semiconductor names. The stock is trading near a critical technical area, leaving short-term traders divided between buying recent weakness and taking profits following a strong rally.

Tech strategist Dan Ives told CNBC on Monday that investors have rotated toward memory stocks, viewing them as the "shiny new toy." This shift has placed NVIDIA and some hyperscalers under pressure despite their central role in artificial intelligence. Ives stated that NVIDIA remains the company powering the AI revolution, led by CEO Jensen Huang. He questioned the sustainability of the memory trade without NVIDIA and hyperscalers driving AI infrastructure spending. The upcoming second-quarter tech earnings season will be crucial for demonstrating AI monetization, with demand still sharply exceeding supply.

Technical Analysis

NVIDIA traded at $208.25 in premarket action. The stock remained 2.9% above its 20-day simple moving average of $201.95 but slipped 0.6% below its 50-day simple moving average of $209.20. The longer-term trend is constructive, with NVIDIA trading 5.1% above its 100-day simple moving average of $197.71 and 8.4% above its 200-day simple moving average of $191.67. The 20-day moving average is below the 50-day moving average, a bearish crossover signaling potential choppy trading. However, the 50-day moving average stays above the 200-day moving average, indicating the broader uptrend remains intact.

Momentum indicators are encouraging, with the moving average convergence divergence (MACD) holding above its signal line and a positive histogram suggesting easing downside momentum. Key technical levels include resistance near $214 and support around $199.50. NVIDIA reached a 52-week high of $236.54 in May before forming a swing low in June and slipping below a support level in July.

Earnings And Analyst Outlook

The next major catalyst is NVIDIA's estimated earnings release on Aug. 26, 2026. Wall Street expects earnings of $2.07 per share, up from $1.04 a year earlier. Revenue is projected to reach $91.70 billion, compared with $46.74 billion in the prior-year period. The stock trades at about 32.3 times earnings. Analysts maintain a consensus Buy rating with an average price forecast of $323.83.

Market Metrics

According to Benzinga Edge, NVIDIA scores strongly on momentum, quality, and growth, while its value score remains weak due to premium valuation. The momentum score is 74.81, quality is 98.13, and growth is 98.62. The value score stands at 6.92.

NVIDIA is among the largest holdings in several exchange-traded funds, including the Global X NASDAQ 100 Covered Call ETF (QYLD) with a 9.66% weighting, the Sapient Quality Select ETF (SQS) with a 9.95% weighting, and the REX AI Equity Premium Income ETF (AIPI) with a 9.71% weighting. Significant ETF inflows or outflows can influence demand for the stock due to these large weightings.