Nvidia Corp. (Ticker: NVDA) is on deck with fiscal first-quarter results Wednesday. While investors will be closely monitoring the AI darling’s numbers for further evidence of the tech sector’s continuing boom, at least one advisor is looking far beyond the Nvidia hype.
“Nvidia's earnings are the ultimate test for a stock market that is not only trading at record highs, but one that also had a breathtaking bounce off of the March lows,” said Richard Reyle, chief investment officer and co-founder of Paramus, New-Jersey-based Questar Capital Partners. “Nvidia is the market's shorthand for everything AI and this market's gains have been driven in large part by AI over the past few years.”
In February, Nvidia delivered record fiscal fourth-quarter and full-year results, boosting by ongoing demand for AI infrastructure.
Set against this backdrop, the company’s stock has climbed 20.8% this year, outpacing the S&P 500 index’s gain of 8.2%. Over the last 12 months, Nvidia shares have risen 67.1% and have soared an eye-watering 1,482% over the last 5 years.
“Heading into Nvidia's Wednesday earnings report, we already know the numbers will be stellar given all of the CAPEX spending that has been reported by the hyperscalers in recent weeks,” said Questar Capital Partners’ Reyle.
However, Reyle warns that stellar earnings for Nvidia doesn't necessarily point to much further upside in the stock. “To say that Nvidia is priced for perfection is an understatement,” he said. “We would be careful around Nvidia, as we believe there is a lot of hype in the stock and we have concerns about the circular spending in the AI space.”
“We would take a pass on Nvidia since its biggest customers, Alphabet and Amazon, are working day and night to get out from under Nvidia's chip monopoly by creating their own chips,” Reyle added. Rather, the Questar Capital Partners chief investment officer sees opportunity in Taiwan Semiconductor Manufacturing Company Ltd. (Ticker: TSM) and fellow semiconductor company ASML Holding (Ticker: ASML).
“We would be adding new money to companies that have true moats in the tech space, such as Taiwan Semiconductor (TSM) and ASML Holding (ASML), as it will take 10 years for any other company to genuinely match their top-end manufacturing capability,” said Reyle.
Taiwan Semiconductor shares have jumped 35% in 2026, while ASML Holding’s stock is up almost 41%.
The tech sector has certainly been enjoying a market renaissance in recent months. Last week Goldman Sachs said that, while advisors and their clients have had to contend with waves of market volatility in recent months, they are also benefiting from something of a golden age for U.S. corporate earnings. The tech sector, in particular, has been shining.
“Within the market, the biggest story is AI CapEx,” said Ben Snider, Goldman Sachs’ chief US equity strategist. “Right now, analysts are pointing to $750 billion of hyperscaler capex this year … that's $100 billion more than the estimate just a couple [of] weeks ago,” he added.
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