While most megacap tech names participated in a broad market bounce, Nvidia and Alphabet notably sat out, with chip stocks more broadly under pressure. Nvidia, despite reporting $215.9B in revenue for FY2026 — a stunning 65.5% year-over-year gain — and commanding 71.1% gross margins, couldn't catch a bid alongside its peers. Alphabet similarly lagged despite posting $402.8B in revenue and a 32.8% net margin for full-year 2025.

The divergence is meaningful because both names carry heavy AI-narrative weight. Nvidia is the direct hardware infrastructure play on AI capital expenditure cycles, while Alphabet's cloud and AI ambitions make it a second-order beneficiary. When these two sit out a tech rally, it signals either sector-specific concern (chip inventory, export controls, pricing) or stock-specific skepticism (valuation, competitive threats) rather than a macro risk-off move.

For Nvidia, the near-term bear case centers on whether its explosive revenue growth can sustain at this pace as hyperscaler capex intentions get scrutinized and export restrictions on advanced chips to China remain a policy overhang. The stock's premium multiple means any growth deceleration would be punished harshly.

For Alphabet, the drag may reflect ongoing anxiety around AI search disruption — the irony being that Alphabet is both a potential disruptor and a potential disruptee. Its own AI investments in Gemini and Google Cloud are ramping, but the market has been unforgiving of any signal that search monetization is at risk.

What to watch: whether chip stocks stabilize or break to new relative lows versus the broader Nasdaq, Nvidia's next earnings call for guidance on data center demand, and any update on US chip export policy that could alter the revenue ceiling for NVDA's China-exposed business.