The incredible chip sector rally is leaving behind its most notable stock. What's wrong with Nvidia?

Chip stocks are surging at an historic rate. But Nvidia , the company that's been at the heart of the AI boom, isn't participating. Over the past month, stocks like AMD and Micron are up 90% and 76%, respectively. Nvidia is only up 17%. In recent trading, that underperformance has gotten worse. The GPU-maker is flat since April 27, just before big chip companies started reporting earnings. Meanwhile, Intel and Micron have popped more than 30% since that time. AMD is also up around 20% over those days, with the bulk of that advance coming Wednesday . The divergence came as first-quarter earnings revealed a bottleneck in memory chips along with progress among the hyperscalers in developing their own in-house chip systems, such as Alphabet's TPUs and Amazon's Trainium chips. One factor is concern that capex spending can't get much higher and Nvidia shares were already pricing in a best case scenario, while other stocks were not. "Within the semiconductor space, the large-cap AI bellwethers, which include Nvidia, are unfairly pricing a peak in capex, which is not in sight, certainly for the next [two to] three years. If anything, capex numbers are going up," Venu Krishna, head of U.S. equity strategy at Barclays, told CNBC on Wednesday. "The Street was materially too low in calendar year 2027 and 2028," he added. …