4 reasons Nvidia stock is lagging

4 reasons Nvidia stock is lagging Brian Sozzi · Executive Editor Wed, August 26, 2026 at 11:35 AM GMT+2 3 min read NVDA ^GSPC AMD INTC MU Nvidia's ( NVDA ) stock isn't having its typical year. No epic gains on earning reports. Nvidia stock has fallen in response to earnings in six of the past eight quarters, including the last four, per Yahoo Finance AlphaSpace analysis.

No major outperformance versus the S&P 500. Nvidia's stock is up 14% year to date, while the S&P 500 ( ^GSPC ) is up 12%. No major outperformance versus other key players in the AI chip supply chain.

Micron ( MU ) shares have gained a sizzling 225%. Intel ( INTC ) is up 138%. AMD ( AMD ) is up 124%.

Raymond James analyst Simon Leopold lists four reasons the chip king stock is stuck in neutral in a new note: How much more Nvidia can investors own: With a market cap of $5. 2 trillion, the market may have a limited appetite for further exposure to Nvidia, Leopold said. Lack of belief creep: Fear that the AI boom turns to a bust is creeping up, Leopold noted.

Law of large numbers: Decelerating growth is likely to come to Nvidia soon, given how fast it has grown the past two years. Peak worries: Peaking growth and peaking margin are concerns for Nvidia, Leopold said. "We have been disappointed with the stock's year-to-date performance with the shares up only 12% largely matching the S&P 500 index," contended Leopold, who rates the stock a Strong Buy.

"The stock trades with a 2027 GAAP P/E [price-to-earnings] ratio of less than 15x, which is below the S&P 500's 18. 6x. The discount strikes us as fundamentally illogical considering that sales and net income growth still exceeds 20% in 2028 estimates.

Typically, a company with sustainable growth, barriers to entry (e. g. , Cuda, leading GPU performance), and healthy free cash flow trade with multiples above the overall market.

" When Nvidia reports its must-read earnings after the close of trading today, it may put some of these concerns front and center in the market. Chief among them is the bull Nvidia story, which is well known at this point. The reality is that the market is positioned for the company to post something great and for CEO Jensen Huang to sound super bullish on the earnings call.

The market also knows there is minimal downside risk to Nvidia's growing investment portfolio , given the rising valuations (see Anthropic ( ANTH. PVT ), for example) being afforded to most privately held names in artificial intelligence. Leopold thinks the next catalyst for Nvidia's stock is evidence that it's grabbing a larger share of the CPU market.

"CPUs represent a low single-digit percent of Nvidia sales — roughly 3% today," Leopold said. "In the past, Nvidia's CPUs were tightly tied to its GPUs, but that should change, particularly with agentic use cases. While Nvidia's CPU revenue is becoming material within the CPU market, we expect it to reach approximately 5% of total revenue by 2028 in our model — still a single-digit portion, yet the growth is the fastest among the elements we model.

" Story Continues Brian Sozzi is Yahoo Finance's Executive Editor, host of the ' Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories?

Email brian. sozzi@yahoofinance. com.