Nvidia shares fell more than 1% on February 25, 2026, as investors assessed the company’s earnings report amid growing competition in the artificial intelligence chip market. Wall Street had been closely watching for indications of the sustainability of hundreds of billions of dollars earmarked for data center infrastructure.
Companies including Alphabet, Microsoft, Amazon, and Meta are collectively projected to spend at least $630 billion in 2026, with the majority of those resources directed toward data centers and processors, according to industry analysis. Whereas Nvidia remains the dominant player, emerging challenges to its market leadership are becoming increasingly apparent.
Rival AMD is preparing to launch a new flagship AI server later this year and has already secured contracts with former Nvidia customers, including Meta. Google, meanwhile, has agreed to supply its Tensor Processing Units (TPUs) to Anthropic, developer of the Claude chatbot – a leading competitor to ChatGPT – and is reportedly in discussions to also supply Meta, according to sources familiar with the matter.
Major technology groups are also bolstering their internal development of semiconductors for their own data centers, further intensifying the competitive landscape. This shift suggests Nvidia’s path forward may not be as clear as it once was, despite its chips having been a critical differentiator until recently.
Nvidia clarified that its current quarter forecasts do not include revenue anticipated from the sale of chips for data centers in China. However, the company announced it had received licenses from the U.S. Government this month to ship “small quantities” of H200 chips to Chinese customers. Analysts had factored in a potential resumption of sales to China following export restrictions imposed by Washington. AMD has also incorporated AI chip sales to China into its projections after obtaining approvals for modified versions of its processors.
The company also stated it has secured sufficient inventory and production capacity to meet demand in the coming quarters. In a competitive environment for attracting specialized AI engineers and researchers, Nvidia will include stock-based compensation in its non-GAAP financial metrics.
As of February 25, 2026, Nvidia’s market capitalization stood at $4.7 trillion, according to data from financial markets. This places it as the last remaining company in the $4 trillion club, after Alphabet, Apple, and Microsoft all fell below that valuation earlier in the month, according to reports.
