Nvidia CEO Jensen Huang speaks during a dinner event with the company's Taiwanese suppliers in Taipei, Taiwan, on Saturday, Jan. 31, 2026.
Nvidia reported blowout earnings on Wednesday and issued a better-than-expected forecast showing accelerating growth. CEO Jensen Huang proclaimed that "compute demand is skyrocketing."
Investor concerns appear to be elsewhere.
The stock fell for a second straight day on Friday and is down 6% for the week in what would be its sharpest pullback since November. With the retreat, Nvidia's stock is now down for the year, joining the rest of tech's megacap companies.
One broad concern in the market is that capital expenditures among the tech giants will soon peak, meaning Nvidia's growth rates are poised to slow dramatically in the coming quarters and years. Another issue for investors is competition -- companies that buy large quantities of chips for AI have begun showing more interest in alternatives to Nvidia's graphics processing units (GPUs).
On Friday, OpenAI, which for years has relied heavily on Nvidia GPUs to train and run AI models, said it would consume 2 gigawatts' worth of Amazon Web Services' Trainium AI chip capacity. That announcement came as OpenAI closed a $110 billion funding round, with Amazon contributing $50 billion and Nvidia putting in $30 billion.
"This is the single biggest validation of Amazon's custom AI silicon strategy to date, and it gives OpenAI a real hedge against Nvidia supply constraints and pricing power," Patrick Moorhead, CEO of Moor Insights and Strategy, wrote in a post on X.
Last month OpenAI committed to adopting 750 megawatts in computing power from smaller AI chipmaker Cerebras.
OpenAI is still using plenty of Nvidia. The company said on Friday that it will use 5 gigawatts of computing power on Nvidia's next-generation Vera Rubin GPUs. That's on top of existing Nvidia GPUs across the CoreWeave, Microsoft and Oracle clouds.
Nvidia on Wednesday said revenue in the January quarter shot up 73% year over year to $68 billion and called for 77% growth in the current quarter, which would be the fastest rate of expansion in a year. But following an expected growth rate of 65% this fiscal year, analysts see that number slowing to 30%, 13% and 14%, respectively, in the subsequent three years.
Meta is also exploring Nvidia alternatives. On Tuesday, Advanced Micro Devices said the social media company will consume up to 6 gigawatts of its Instinct GPUs. And on Thursday, The Information reported that Meta has struck a multibillion-dollar agreement to use Google's Tensor Processing Units.
Broadcom, which builds custom chips for Google, is down 5% for the week. The company is scheduled to report fiscal first-quarter results on Wednesday.
With its slide this week, Nvidia is now down 16% for the year, a drop that some analysts see as a buying opportunity.
"We don't know when investors will look at these AI names more positively, but the stock continues to get cheaper and at some point, we do believe there will be a rotation back," Jefferies analysts, who recommend buying the shares, wrote in a note on Wednesday.
-- CNBC's Katie Tarasov and Ari Levy contributed to this report.