Nvidia shares closed Friday's session with a substantial 7.9% gain, reaching $185.41 and igniting a broad advance across semiconductor stocks. The rally was driven by renewed investor confidence in artificial intelligence infrastructure investments, particularly from cloud computing giants.
AI Spending Signals Fuel Optimism
Market participants pointed to anticipated increases in AI data-center capital expenditures from Amazon and Alphabet as a primary catalyst. The VanEck Semiconductor ETF climbed 5.4% during the session, while the technology-heavy QQQ and SPY indexes rose 2.2% and 1.9%, respectively. Other chipmakers followed Nvidia higher, with Advanced Micro Devices gaining 8.2% and Broadcom adding 7.1%.
According to Reuters, Amazon is considering approximately $200 billion in capital expenditures for 2026, a significant increase from $131 billion in 2025. Baird investment strategy analyst Ross Mayfield noted that "real demand for AI products necessitates a lot of spending," while Nvidia CEO Jensen Huang separately described demand as "sky-high."
Upcoming Catalysts and Concerns
Investors face several important milestones in coming weeks. The U.S. Employment Situation report for January arrives on February 11, followed by January's Consumer Price Index data on February 13. These inflation readings could influence interest rate expectations and growth stock valuations.
Nvidia will then report fourth-quarter and full-year results on February 25, with management commentary and a conference call scheduled afterward. Analysts will scrutinize guidance, margins, and order trends for signs of sustained momentum.
Despite the bullish sentiment, some caution persists. Following Amazon's spending projections, research firm MoffettNathanson noted the figure came in "materially greater than consensus expected" and warned that the "margin of error is shrinking." SanJac Alpha chief investment officer Andrew Wells described the AI build-out trade as having become "too pricey," suggesting some investors are taking risk-off positions.
The immediate test arrives at Monday's market open, where traders will determine whether the chip rally has staying power or faces profit-taking pressure after the weekend.
