The Nasdaq Composite has staged a powerful recovery in Spring 2026 after a brutal 16% drawdown in Q1. Earnings season just closed, and three major Nasdaq stocks — NVIDIA (NVDA), Microsoft (MSFT), and AppLovin (APP) — are telling three very different stories. AI demand has gone parabolic according to Jensen Huang, yet two of these three stocks are still deeply in the red for 2026. Here is a data-driven analysis of where each stock stands today, what the numbers say, and what traders should watch next.
What This Analysis Covers
- NVIDIA (NVDA) — Earnings Breakdown & Outlook
- Microsoft (MSFT) — Why It’s Down 15% Despite Strong Fundamentals
- AppLovin (APP) — The Most Misunderstood Stock on Nasdaq
- Side-by-Side Comparison: NVDA vs MSFT vs APP
- Interactive Dashboard — Explore the Charts Yourself
- Our Verdict
NVIDIA (NVDA): Parabolic Demand, But Stock Fell Post-Earnings
NVIDIA reported Q1 FY27 revenue of $81.6 billion — up 92% year over year, crushing all estimates. Data Center revenue alone hit $73.5 billion, powered by the Blackwell GPU ramp and insatiable demand from hyperscalers including Microsoft, Google, Amazon and Meta. Jensen Huang summarised the quarter simply: “Demand has gone parabolic.”
Q2 FY27 guidance came in at $91 billion — well above the Street’s $86 billion estimate. NVIDIA also raised its quarterly dividend by 2,400% and authorised an $80 billion share buyback. Despite all this, the stock fell in after-hours trading — a textbook “sell the news” reaction after a 90%+ YTD run into the print.
NVDA Key Metrics — Q1 FY27
| Metric | Value |
|---|---|
| Revenue | $81.6B |
| Revenue Growth (YoY) | +92% |
| Data Center Revenue | $73.5B |
| Gross Margin | 75% |
| Q2 Guidance | $91B |
| Forward P/E | ~30x |
| YTD Return | +6.4% |
Bull case: Blackwell is in the meat of its ramp, Vera Rubin samples are already in customer hands, and hyperscaler capex is heading toward $725 billion in 2026. Bear case: Export restrictions to China remain a structural headwind, and at 30x forward earnings the valuation leaves little room for error.
Microsoft (MSFT): The Most Unfairly Punished Magnificent 7 Stock of 2026
Microsoft is the only Magnificent 7 stock still in the red for 2026 — down approximately 15% year to date as of May 23. This is despite the company posting arguably its strongest set of fundamentals in years. Azure cloud revenue grew 40% in the most recent quarter — its eleventh consecutive quarter of growth above 30%. AI Annual Recurring Revenue surged 123% year over year.
The disconnect between price and fundamentals is striking. GitHub Copilot is transitioning to a usage-based pricing model, which analysts expect to be a significant revenue driver. The stock is trading at its cheapest valuation relative to peers since early 2024, making it one of the more compelling setups in large-cap tech right now.
MSFT Key Metrics — Q3 FY25
| Metric | Value |
|---|---|
| Revenue | $70.1B |
| Azure Growth (YoY) | +40% |
| AI ARR Growth | +123% |
| Gross Margin | 68% |
| Forward P/E | ~28x |
| YTD Return | -12.9% |
Bull case: Azure at 40% growth for 11 straight quarters is one of the most consistent growth stories in tech. The YTD decline has created an entry point not seen in over a year. Bear case: EU antitrust scrutiny is intensifying, and the cost of the OpenAI partnership is enormous with an unclear ROI timeline.
AppLovin (APP): 89% Gross Margins, 59% Revenue Growth — So Why Is It Down 25%?
AppLovin may be the most misunderstood stock on Nasdaq right now. The company posted Q1 2026 revenue of $1.84 billion — up 59% year over year, beating estimates of $1.78 billion — with gross margins intact and EBITDA margins hitting a record 85%. EPS came in at $3.56 versus the $3.42 estimate. Yet the stock has cratered from an all-time high of $733 in December 2025 to around $485 today — a 34% drawdown despite accelerating fundamentals.
The decline has been driven by SEC probe concerns over data collection practices, short-seller reports, and rotation away from adtech. However the business keeps compounding. Adjusted EBITDA hit $1.56 billion, up 66% year over year with an 85% margin. Free cash flow was $1.29 billion for the quarter. CEO Adam Foroughi announced the Axon platform will open to all advertisers in June 2026 — calling it a “game-changer.” The consumer vertical saw March advertiser spend 25% higher than January, with April reaching a record high surpassing all previous Q4 months.
APP Key Metrics — Q1 2026
| Metric | Value |
|---|---|
| Current Price | ~$485 |
| All-Time High | $733 (Dec 2025) |
| Drawdown from ATH | ~34% |
| Q1 Revenue | $1.84B |
| Revenue Growth (YoY) | +59% |
| EBITDA Margin | 85% (record) |
| EPS | $3.56 (beat $3.42 est.) |
| Free Cash Flow | $1.29B |
| Q2 Revenue Guidance | $1.915B-$1.945B |
| YTD Performance | Down ~34% from ATH |
Bull case: Axon platform going fully public in June is the biggest catalyst of the year — self-serve onboarding worldwide unlocks a massive new advertiser base. The e-commerce vertical is already showing record spending momentum. At current prices the stock trades at a significant discount to its December highs despite stronger fundamentals. Bear case: SEC investigation into data collection practices is a real overhang with uncertain outcome. Dependency on mobile gaming advertising creates concentration risk, and competition from Google and Meta in the adtech space is intensifying.
NVDA vs MSFT vs APP: Side-by-Side Comparison
| Metric | NVDA | MSFT | APP |
|---|---|---|---|
| Current Price | $215.42 | $418.85 | $485 |
| YTD Return | +6.4% | -12.9% | -34% |
| Revenue Growth | +92% | +15% | +59% |
| Gross Margin | 75% | 68% | 89% |
| Forward P/E | 30x | 28x | 41x |
| Our Verdict | Strong Buy | Buy the Dip | Watch Closely |
Explore the Interactive Dashboard
We built a fully interactive dashboard where you can explore price charts, quarterly revenue trends, bull and bear cases, and a quality score card for each of the three stocks. Click below to open it — no login required, completely free.
The dashboard includes: 2026 price history for all three stocks, quarterly revenue charts, a radar-based quality score card, and a side-by-side comparison of key metrics including revenue growth, gross margins and forward P/E ratios.
Our Verdict: Where Is the Best Opportunity in May 2026?
NVIDIA remains the highest-conviction bet if you believe the AI infrastructure cycle has years left to run — and with hyperscaler capex heading toward $725 billion, that case is strong. The post-earnings dip is the kind of entry point long-term investors wait for.
Microsoft is the value play hiding in plain sight. Eleven consecutive quarters of Azure growth above 30% is not an accident. The market is penalising it for macro reasons while the business continues to compound. Patient investors will likely be rewarded.
AppLovin requires a higher risk tolerance but offers the most asymmetric setup.
⚠️ Disclaimer: This post is for educational and informational purposes only. Nothing here constitutes investment advice, a buy or sell recommendation, or financial guidance of any kind. US market investments carry additional currency and geopolitical risk for Indian investors. All data sourced from public earnings reports and financial databases as of May 23, 2026. The author is not SEBI registered. Please conduct your own research before making any investment decisions.