Nvidia Stock Rises. Watch These Figures for the Next Rally.

Nvidia chips are the favored choice for training artificial-intelligence models. (Marlena Sloss/Bloomberg)

Key Points

• Nvidia’s future gains depend on major technology companies meeting or exceeding capital expenditure forecasts.
• Wall Street predicts large cloud-computing businesses will increase capital expenditures by approximately 63% this year.
• Analysts anticipate Nvidia will report 58% revenue growth for 2025, slowing to 36% in 2026, with no expected revenue from China.

Nvidia stock was edging up early Thursday. Future gains depend on major technology companies matching or preferably exceeding forecasts for capital expenditure.

The chip maker’s shares were up 0.1% at $180.49 in premarket trading. The stock fell 0.5% on Wednesday and has been broadly flat over the past month.

Nvidia’s direction will be set by earnings reports from Microsoft , Google-parent Alphabet , and Amazon.com next week. Wall Street is forecasting that the largest cloud-computing businesses will increase their capital expenditures by around 63% this year from levels in 2024, according to Susquehanna analyst Christopher Rolland.

According to analysts, that should power 58% growth for Nvidia’s own 2025 revenue, which is set to slow to 36% in 2026, according to Rolland. The pressure for U.S. investment to come through is bigger as Nvidia currently expects no revenue from the Chinese market.

“For China, the situation remains murky as several customers have now received licenses for H20s, but Nvidia has yet to begin shipments (given tensions, we think the Chinese government may be dissuading customers from ordering),” Rolland wrote in a research note.

The limited-capacity H20 chip was specifically designed by Nvidia for the China market in compliance with U.S. regulations on exports.

Rolland has a Positive rating and $210 target price on Nvidia shares.

Among other chip makers, Advanced Micro Devices was rising 0.3% and Broadcom was gaining 0.1% in premarket trading.

Write to Adam Clark at adam.clark@barrons.com