Nvidia has quietly lagged behind during an otherwise roaring semiconductor rally.
While the stock's 29% advance this year is respectable, it noticeably trails behind peers in the VanEck Semiconductor ETF $(SMH)$. It's a gap made all the more striking given it is the ETF's largest holding at 19%. That relative underperformance is precisely where the opportunity lies.
As the world's largest company, with a market capitalization of $5.8 trillion, Nvidia sits within striking distance of the historic $6 trillion milestone. If price action begins to catch up with the broader chip group, the spillover effect will extend far beyond semiconductors, pulling technology equities and the broader market higher in tandem.
Other semiconductors have performed well alongside the leaders, and that broad participation should support the group as a whole. Once a firm trend is established it tends to remain in place rather than reverse.
Six large-cap names have advanced more than 200% in 2026, not a typo, including Intel, which I wrote about last December. Micron is up 275% year to date, Marvell Technology was higher by 7% Tuesday and doing battle with the very round $300 number, and Advanced Micro Devices is an absolute beast in the group.
Let's look at Nvidia's potential on the daily chart. And take a longer term perspective on the monthly time frame.
Looking at NVDA's daily chart, the ratio chart against SMH highlights persistent underperformance throughout much of the past year, with brief exceptions in July and August. On absolute price, the current uptrend gained momentum on April 15, when the stock cleared a double-bottom pivot at $197.73 during a powerful six-out-of-seven-week winning streak that yielded a combined 44% gain.
Following that advance, price action drifted lower over the next three months until a bullish harami completed on July 30 right at the 200-day simple moving average. That session also delivered a successful retest of the former double-bottom breakout zone. Accumulation has since accelerated, driven by a 9% gap higher on Aug. 27 that printed on NVDA's highest single-day volume in seven months.
On Monday, the stock broke out to a new all-time high by clearing a $234.86 cup-with-handle trigger, setting up its next major leg higher. This stock could reach $282 during the first quarter of 2027, a 17% gain from current prices. Remain bullish above $227.
Nvidia was trading around $240 Tuesday.
Turning to the monthly perspective highlights Nvidia's remarkable long-term consistency.
Dating back to the start of the first quarter of 2022 the stock has never recorded more than two consecutive monthly losses. While scaling a megacap asset of this size is often compared with steering a mature supertanker, hard to maneuver and adapt, the stock continues to demonstrate impressive agility. In fact, the stock deserves immense credit for absorbing and shrugging off four monthly doji candles since August 2025, formations that typically trigger sharp trend reversals.
Another compelling feature of this digestion is the noticeable volume contraction since the first half of 2025. Volume naturally dries up during multi-month digestion phases, only to expand rapidly once a fresh leg higher takes hold.
As NVDA completes its current breakout, renewed institutional capital inflows should manifest in expanding volume, providing necessary liquidity to drive stock prices higher in its next markup phase.
Finally, a five-year ratio chart against the SMH confirms that NVDA remains a dominant long-term outperformer. Its relative consolidation throughout 2026 was not a structural breakdown, but rather a well-deserved period of rest and digestion before the potential "comeback." Expect this stock to shine in 2027 after a well earned breather.
Doug Busch is the senior technical analyst at Barron's Investor Circle. His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.