Prediction: This Will Be Nvidia's Stock Price 12 Months From Now

Nvidia (NASDAQ: NVDA) is now the most valuable company in the world. But investors aren't as interested in the past as they are about the future. Where will Nvidia shares head over the next 12 months? Let's check the latest predictions from Wall Street's highly paid analysts.

Wall Street analysts are very bullish on Nvidia stock

In general, Wall Street loves Nvidia stock. The consensus price prediction over the next 12 months is around $257 -- roughly 40% higher than the current trading price. But when you dig deeper, it's clear that analysts don't know what to make of the stock. Ananda Baruah, an analyst at Loop Capital Markets, has a $350 price target. Atif Malik from Citigroup, however, has a price target of just $220.

Even with a wide range of predicted outcomes, one thing is clear: Wall Street expects Nvidia stock to go up in 2026. Why? Let's take a look at some of the comments from Rick Schafer, an analyst at Oppenheimer who recently boosted his price target from $225 to $265. Nvidia is "the purest scale play on AI proliferation," he wrote in a research note. He said the company is "the de facto AI accelerator provider offering a unique rack-scale system," and that his firm remains a longtime buyer.

Image source: Nvidia.

Let's break down Schafer's comments into simpler terms. Nvidia is the world's leading supplier of graphics processing units (GPUs) destined for artificial intelligence (AI) applications. Most estimates peg it with a 90% market share. These GPUs aren't luxury items -- they are necessary for the current AI industry to function, enabling parallel computing tasks that make training and running complex AI models possible. Nvidia has a dominant market share due to early investment, which not only made the performance of its chips superior to the competition but also integrated its chips with powerful software like CUDA, effectively locking users into its ecosystem.

As AI investment rises dramatically worldwide, Nvidia's chips sit at the center of the fervor. Sales in 2026 are expected to increase by nearly 60%, with an additional 40% growth anticipated in 2027. "We see several structural tailwinds driving sustained out-sized top-line growth in high performance gaming, datacenter/AI and autonomous driving vehicles," Schafer told clients in mid-November. "NVDA remains best positioned to win AI," he added.

Nvidia's growth trajectory is undeniable. However, investors must also consider one other factor: the stock's valuation.

Is Nvidia stock too expensive?

Future returns are a function of one thing: the price you pay. Even if a company is growing rapidly, it's still possible to pay too much for that growth, resulting in suboptimal or even negative long-term returns.

Right now, Nvidia stock trades at 23 times sales. While the company has impressive gross margins and an exciting growth trajectory, that's still a historically large amount to pay for a business with a market cap of more than $4 trillion. Let's put this into perspective. Since 2023, Nvidia shares have risen by more than 1,000%. Even if shares rose by just another 300%, the company would be worth $17.4 trillion -- roughly the entire annual GDP of China.

On a price-to-earnings basis, however, the situation appears much more favorable for investors. Currently, shares trade at roughly 44 times trailing earnings, and only 38 times forward earnings. The market, overall, trades at around 31 times earnings. If Nvidia can maintain double-digit sales growth and industry-leading margins, this valuation seems more than palatable.

What's my personal prediction for Nvidia's stock price 12 months from now? I'm certainly bullish on Nvidia stock in the long term, given the strength and durability of AI's growth. As Nvidia's CEO observed during the company's latest earnings announcement, Nvidia continues to execute on nearly every sales and R&D milestone. "Blackwell sales are off the charts, and cloud [computing] GPUs [graphics processing units] are sold out," Jensen Huang revealed last week. "Compute demand keeps accelerating and compounding across training and inference -- each growing exponentially."

But here's the thing: many experts now believe AI stocks are in a bubble. Nvidia's sky-high valuation is a testament to that belief. I believe Wall Street's consensus price target for Nvidia shares is very reasonable, given its long-term growth prospects. I'm also watching for another correction to pick up shares at a lower price. While I also have a price target of around $257, the potential variance in share prices is very high next year. If the share price ends up below your personal predictions, it may be wise to have extra cash on hand to take advantage of a lower valuation.

Citigroup is an advertising partner of Motley Fool Money. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.