Nvidia Record High: Why It Still Lags a 96% Chip Rally

A record that comes with an asterisk

Nvidia set fresh all-time highs on Monday, with shares trading around $238 to $240. That lifted the company's market value to roughly $5.7 trillion, close to the $6 trillion mark.25 Two things helped: a $150 billion share buyback and a Morgan Stanley call naming the stock a top pick.2

The odd part is how the record compares with the rest of the industry. Nvidia is up about 28% in 2026, while the broader chip sector has climbed roughly 96%.2 For most of the year, the most valuable chip company has trailed the group it is supposed to lead. The record looks more like Nvidia catching up than Nvidia pulling ahead.

September's lopsided leaderboard

The monthly numbers show how wide the gap has been. The iShares Semiconductor ETF (SOXX) rose 11% in September and another 3.6% in the first two trading days of October, according to Motley Fool figures.1 Within that gain, the results varied a lot:

• Intel: up 34%
• AMD: up 30%
• Micron: up 11%
• Nvidia: up 3%
• Broadcom: down 5%1

The sector's strength in that stretch came mostly from companies outside the AI-accelerator leader. Memory makers, which sell the DRAM and high-bandwidth memory placed beside AI processors, and foundries such as TSMC, which manufacture those processors, both reported rising sales in the same weeks.1 When several layers of the supply chain post growth at once, it suggests AI spending is reaching more than one company. That supports the idea that the rally rests on more than a single stock.

Fundamentals versus share price

Nvidia's own results don't explain why it lagged. In its August second-quarter report, the company beat Wall Street's expectations for both revenue and profit. It posted $96.2 billion in revenue and guided third-quarter sales to between $105.8 billion and $110.1 billion.5

The more likely explanation is positioning. Investors seem to have looked for more upside in cheaper or more cyclical names such as memory, foundry, and turnaround stories like Intel, rather than in a company already priced near $6 trillion. The buyback may help change that. A steady corporate buyer can cushion the stock during pullbacks.2 Nvidia is also the largest stock in the major US indices, so its gains help keep the S&P 500 and Nasdaq firm even with elevated bond yields.2

The bull case for year-end

Lynx Equity Strategies analyst KC Rajkumar expects the AI semiconductor rally to continue into year-end, led by Nvidia, Micron and Sandisk.34 He dates the current leg to the Federal Reserve's September 15 meeting. He described a modest pullback in the Philadelphia Semiconductor Index on Wednesday, after four straight days of gains, as a pause rather than a reversal.3

Rajkumar's argument is about demand spreading. He cited the growing use of AI agents from Meta, OpenAI and Anthropic, plus stronger-than-expected AI-driven services results at Accenture, as signs that demand for AI applications is widening.3 He also argued that AI chips are coming out of a period of investor skepticism and are no longer the crowded trade they were a few months ago.3

That last point sits uneasily with a sector that has nearly doubled this year. One reading is that the trade has rotated rather than thinned out: money spread into memory and foundry names while Nvidia lagged, so the leader may simply feel less crowded. Day-to-day moves were also mixed. The same Lynx note ran on two outlets alongside opposite Micron moves, down about 2% on one and up about 4% on the other, which looks like snapshots taken at different times.34

What to watch

One longer-term theme stands out. If the main constraint on AI buildout moves from chips to power and land, investor attention could shift toward utilities and data-center infrastructure.2 That would not end chip demand. It could, however, limit how much of the next round of AI spending goes to semiconductor stocks.

The takeaway

Nvidia's record is real and backed by strong earnings, but it is not a sign that a narrow rally is accelerating. The bigger story of 2026 is that AI spending has spread across the chip supply chain, and Nvidia's shareholders have benefited less than the sector as a whole. With the buyback, a major-bank endorsement and growing analyst optimism, the stock now has room to close the gap. The open question is whether that happens through Nvidia catching up or through the rest of the sector cooling off, and current prices don't yet indicate which.