Nvidia reports after the bell on Wednesday in what amounts to a referendum on the durability of the AI infrastructure boom.
Wedbush analyst Dan Ives, who carries an outperform rating and a $300 price target on the stock, expects the company to beat consensus and guide above Street estimates. His confidence rests on two pillars: positive signals from Asian supply chains and an acceleration in capital spending commitments that now stretches into 2027.
The capex picture keeps expanding
The raw numbers are striking. Big Tech capex is expected to exceed $750 billion in 2026, according to Wedbush, with hyperscaler forecasts running ahead of prior expectations.
But the spending story extends beyond the usual suspects. Neocloud operators and model builders are ramping fast, with CoreWeave looking to more than double its capex this year. Sovereign entities represent another layer of demand coming off a smaller base, which means growth rates in these segments could outpace the hyperscalers.
Ives argues that consensus estimates for Nvidia remain too low over the next few years. The global demand picture, in his view, has moved beyond the initial cloud buildout phase into something broader, with enterprises and governments now entering the frame.
The multiplier effect
Wedbush estimates that every $1 spent on Nvidia chips generates an $8 to $10 multiplier across the rest of the technology stack. That ratio matters because it frames Nvidia not as an isolated beneficiary but as the foundation layer for a spending cycle that feeds through to software, infrastructure and services.
The evidence for that downstream effect is starting to show. Recent results from Palantir, Datadog and Innodata point to growing enterprise demand for AI use cases, a signal that the monetisation phase is moving from theory to practice.
Ives also sees the Street underestimating cloud growth and AI deal conversion at Microsoft's Azure and Amazon's AWS over the next 12 months. If he is right, the earnings power of the hyperscalers in this next phase could surprise to the upside.
What Wednesday means for the wider market
Wedbush's broader call is that tech stocks could rally another 10% to 12% from current levels into year end as investors recalibrate around the full scale of AI adoption.
That is a bold claim, and it hinges on Wednesday delivering the kind of beat-and-raise quarter that validates the spending trajectory. Jensen Huang's commentary on enterprise demand and the appetite for Nvidia's next-generation chips will carry as much weight as the numbers themselves.
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Nvidia shares traded at $225.32 at the time of the Wedbush note. The $300 price target implies upside of around 33%.
The question that remains unanswered is whether the current capex surge translates into sustainable returns for the companies writing the cheques, or whether Wall Street is pricing in a payoff that has yet to materialise.
