It has been a volatile start to 2026 for Nvidia (NASDAQ:NVDA) shares. Last Friday (6 February), they rocketed almost 8% higher on the day. However, the stock has also been caught up in the broader AI sector wobble in recent weeks. Here’s what £5k from the start of January would currently be worth, and where I think the direction of travel is going forward.
Comparing figures
Nvidia started the year at $188.85. It closed Friday at $185.41, meaning it has fallen 1.8%. On £5k, this translates to an unrealised loss of £90, making the investment currently worth £4,910.
Interestingly, if I had run the numbers on Thursday, before the rally on Friday, it would have been a different story. The stock was down 9.3% on the year at that point.
When I compare this to the S&P 500, I’m a little underwhelmed. The US index is up 1.2%. Even though this might not seem like a lot, it’s a 3% swing versus Nvidia in five weeks of trading. That’s significant.
Nvidia’s performance stacks up better when I compare it to industry peers. In the big tech space, Amazon is down almost 9%, while Microsoft is down a whopping 17%. It’s true that investor concern around AI disruption is causing headaches for a lot of companies. Recent news around higher AI capex spend hasn’t gone down well.
Earnings in the spotlight
The stock has been volatile even though we haven’t experienced the latest quarterly earnings. This is due later in February and represents the major short-term catalyst I see.
One major topic is how export restrictions on high-end AI chips to China are affecting both reported revenue and forward guidance. Further, investors will be keen to see if it can continue its AI-driven revenue momentum, especially in its data centre segment. Remember, this is the area that has driven much of the company’s growth in recent quarters.
There’s a high benchmark for earnings growth, which always gets me a little nervous. Even if the company reports robust performance, if it’s not as exceptional as people expected, then the share price could fall.
Let’s also not forget about the guidance and outlook offered. Nvidia is the poster child for the AI movement, so comments from CEO Jensen Huang about further adoption or changes in the sector will be scrutinised at length.
The bottom line
I don’t think volatility in Nvidia shares is going to calm down any time soon. Even beyond this month’s earnings, I think investors will remain sensitive to headlines about AI in the coming months and to whether demand can really keep pace with what people expect.
However, in line with the Foolish investing mindset, investors could do well to not panic about any further wild share price swings. Looking to the long term can help get a better perspective. With that lens, I still see Nvidia performing well, so I still feel it’s a stock for people to consider buying.
