New York, February 16, 2026, 16:03 (EST) — Market’s done for the day.
- With U.S. markets closed for Presidents Day, trading picks back up on Tuesday.
- Investors are starting to wonder if all this heavy AI infrastructure spending will actually pay off with near-term profits.
- Next up for the AI trade: Nvidia’s results drop Feb. 25.
This year, AI-centric megacaps have shed significant market value, with investors wary about how quickly hefty bets on artificial intelligence might deliver results. Monday’s Washington’s Birthday holiday kept U.S. stock markets shut, putting the sector on pause until trading resumes Tuesday.
Why it matters now: The “AI trade” is suddenly feeling the weight of its own tab. Capital spending—capex—on data centers, chips, and gear is climbing, and shareholders are starting to demand a clearer view of profits and real cash returns.
The timing isn’t great. The firms snapping up AI chips are also in the thick of the scramble over AI models and cloud services—fields where pricing leverage doesn’t always last and rivals move in fast.
AI names put in a mixed performance in the final U.S. session before the holiday. Nvidia gave up 2.2% to close at $182.81. Shares of Alphabet edged down 1.1% to $305.72, while Meta lost 1.5% to $639.77. Broadcom shed 1.8%, finishing at $325.17. AMD bucked the trend, rising 0.7% to $207.32. Microsoft and Amazon both ended the day a touch weaker.
Andrew Wells, chief investment officer at SanJac Alpha, summed it up: “The market’s viewpoint is that the AI build-out trade … got too pricey.” Nvidia CEO Jensen Huang, on the other hand, keeps pointing to “sky-high” demand for AI equipment and insists the spending surge can last. Reuters
The landscape keeps shifting. Alibaba rolled out its Qwen 3.5 AI model on Monday, describing it as “built for the agentic AI era,” and highlighting both lower costs and better performance. That’s the sort of statement that could stoke investor fears of a looming price war in AI. Reuters
Policy and politics are part of the equation as well. India is hosting a global AI summit this week, seeking to draw more investment. Google, Microsoft, and Amazon have pledged a total of $68 billion in AI and cloud infrastructure spending in India through 2030, according to Reuters.
AI stocks face a straightforward risk. Costs keep climbing, but profits tend to lag. That strains free cash flow and can weigh on valuations—leaving these shares vulnerable if growth falters, or if a lower-priced competitor shakes up the market.
Some argue demand will hold up, making the buildout worthwhile—at least for hardware suppliers. Just one earnings report showing limited supply, solid prices, and steady cloud growth could flip sentiment in a hurry.
Nvidia’s fiscal 2026 fourth-quarter results are up next for traders, landing February 25 at 2 p.m. PT, according to the company’s investor relations page.
For now, everything turns on Tuesday’s session. The question: Will investors keep cutting their AI bets over capex jitters, or do they step back in before Nvidia and fresh spending and cloud numbers come through?
