Nvidia (NVDA) vs 10Y Treasury Yield
Nvidia (NVDA) closed FY26 Q3 with $57.0 billion in quarterly revenue, up over 60% year-over-year, with the data center segment generating roughly $52 billion or 59% of total revenue per Nvidia's earnings release. SPY (SPDR S&P 500 ETF) tracks the broad U.S.
Also known as: Nvidia (NVDA) (STK_NVDA, Nvidia) · 10Y Treasury Yield (10Y yield, 10 year treasury, TNX)
Why This Comparison Matters
Nvidia (NVDA) closed FY26 Q3 with $57.0 billion in quarterly revenue, up over 60% year-over-year, with the data center segment generating roughly $52 billion or 59% of total revenue per Nvidia's earnings release. SPY (SPDR S&P 500 ETF) tracks the broad U.S. large-cap index where Nvidia itself sits as one of the largest weights. The pair captures whether Nvidia is leading the AI capex cycle (NVDA outperforming SPY) or whether the AI trade is broadening to suppliers and customers (NVDA in line or lagging SPY). The 2023 to 2024 stretch saw NVDA outperform SPY by roughly 200 percentage points cumulative; Q1 2025 produced NVDA's worst quarter in a decade at -22%, signaling regime stress that resolved over the balance of 2025.
What the NVDA-vs-SPY momentum pair is actually measuring
Nvidia trades on Nasdaq under ticker NVDA. The company reported FY26 Q3 (calendar Q3 2025) revenue of $57.0 billion, up more than 60% year-over-year, with $52 billion of that in the data center segment that supplies AI training and inference accelerators (H100, H200, B100 Blackwell). The SPDR S&P 500 ETF (SPY) tracks the S&P 500 with $560 billion plus in assets. Nvidia is one of the top-three weights in SPY at roughly 6 to 7% of the index, so a long-NVDA short-SPY trade is not a clean isolation; it is a bet on Nvidia outperforming the other 500 names by enough to overcome the embedded long-NVDA exposure in the SPY short.
Momentum here is measured by the ratio of trailing returns. The simplest version is 12-month NVDA total return minus 12-month SPY total return. The professional version, used at quantitative desks and described in Asness, Moskowitz, and Pedersen (2013, Journal of Finance), is the 12-1 momentum signal: 12-month return excluding the most recent month, which removes short-term mean reversion. NVDA's 12-1 momentum versus SPY's 12-1 momentum is the cleanest way to see whether Nvidia is structurally leading the index.
The 2023 to 2025 momentum cycle
Nvidia returned roughly +239% in calendar 2023 and +171% in calendar 2024 versus SPY at +26.3% and +25.0% respectively per index providers. The cumulative two-year NVDA outperformance over SPY was approximately 360 percentage points. The catalyst was the ChatGPT release in November 2022 that triggered hyperscaler AI capex acceleration: Microsoft Azure capex rose from $33 billion in FY22 to a guided $80 billion in FY26; Meta capex rose from $32 billion in 2022 to a guided $65 to $75 billion in 2025; Amazon AWS capex rose to a guided $100 billion plus in 2026; Google capex stepped up to $75 to $85 billion in 2025. Almost all of that incremental capex flowed to Nvidia accelerators in the 2023 to 2024 window.
Nvidia entered Q1 2025 with consensus expectations priced for continued 2x-plus revenue growth and the stock returned -22% in Q1 2025, the worst single quarter in a decade. The drawdown was triggered by the late-January DeepSeek R1 release that demonstrated competitive AI training results at a fraction of Nvidia-stack training cost, raising questions about whether the AI capex cycle had over-built. NVDA recovered through Q2 to Q4 2025 as data-center revenue accelerated to $52 billion in FY26 Q3, but the volatility of the relative pair stepped up: realized NVDA-SPY pair volatility rose from 25% annualized in 2024 to 40% annualized in 2025.
Conditional Forward Response (Tail Events)
How 10Y Treasury Yield has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in Nvidia (NVDA). Computed from 1,228 aligned daily observations ending .
Following these triggers, 10Y Treasury Yield rises 0.72% on average over the next 5 sessions, versus an unconditional baseline of +0.58%. 123 qualifying events; 10Y Treasury Yield closed positive in 53% of them.
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Frequently Asked Questions
How much has Nvidia outperformed SPY since the AI trade started?+
Nvidia returned approximately +239% in calendar 2023 and +171% in calendar 2024 versus SPY at +26.3% and +25.0%. Cumulative two-year outperformance was roughly 360 percentage points. Q1 2025 saw NVDA fall 22%, the worst quarter in a decade, on DeepSeek R1 disruption and AI-capex normalization concerns. NVDA recovered through 2025 as data-center revenue accelerated to $52 billion in FY26 Q3. The current April 2026 forward P/E is in the high 20s, below the 35x 2024 peak but above SPY's 18x.
Is Nvidia really duration-sensitive, or does the AI cycle override it?+
Nvidia trades at a high forward P/E (25x to 50x across 2023 to 2026), giving it equity duration around 25 to 35 years versus SPY at 18 to 22 years. Textbook says a 100bp rise in DFII10 (10-year TIPS yield, the real-rate proxy) should compress NVDA roughly 1.5x as much as SPY. The 2023 to 2024 episode broke this: DFII10 rose from 1.20% to 2.42% while NVDA returned 239% because earnings revisions ran ahead of discount-rate compression. When earnings revisions slow, duration reasserts: Q1 2025 saw NVDA fall 22% on flat real yields.
What was the DeepSeek R1 release and why did NVDA drop?+
DeepSeek R1 was released on January 27, 2025 as an open-source AI reasoning model that demonstrated competitive results at a small fraction of Nvidia-stack training cost. NVDA fell roughly 17% on January 27, 2025 alone, the largest single-day market-cap loss in U.S. history at the time, on concerns that the AI capex cycle had over-built relative to actual compute requirements. The drawdown extended through Q1 2025 to 22% before recovering as hyperscaler capex guidance held or rose: Meta raised to $65 to $75 billion, Microsoft confirmed $80 billion FY26, and Amazon guided $100 billion plus for 2026.
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