Should You Buy Nvidia Before 2026? The Evidence Is Piling Up, and It Says This.

Nvidia (NASDAQ: NVDA) stock is marching toward its third consecutive annual gain -- and for a very clear reason. The company dominates one of the world's biggest growth markets, the artificial intelligence (AI) chip market. Though others sell AI chips, Nvidia's are the most powerful around, and that has made them an unavoidable fixture in the world's biggest data centers.

This has helped power Nvidia's revenue and profit to record levels, well into the billions of dollars. For example, in the latest fiscal year, the company's revenue rose 114% to $130 billion, and net income advanced 145% to $72 billion. Amid this excitement, though, some investors have worried about various factors that could weigh on Nvidia's growth in the new year, from a potential slowdown in AI spending to rising competition from other chip designers.

Considering all of this, you may be wondering if you should buy Nvidia before 2026. The evidence is piling up, and here's what it says.

Image source: Getty Images.

The Nvidia story

First, though, a quick refresher on the Nvidia story so far. The company built its leadership by entering the market first with a top-performing graphics processing unit (GPU), the chip that powers crucial AI tasks like the pouring of information into large language models. And Nvidia kept its position by constant innovation, now pledging to update its chips on an annual basis.

All of this, as mentioned above, has led to explosive earnings growth and stock performance, making Nvidia a winner for technology investors.

Now, let's take a look at the evidence that's been piling up in recent times that could suggest what direction Nvidia stock will take next year. I'll start with one negative element, and that's concern about a possible AI bubble. Fears picked up momentum early last month as investors worried that the AI opportunity wouldn't be enough to sustain the sky-high valuations of certain players.

Comments from Nvidia's customers

It's very true that some AI stocks may be overvalued and that certain share prices might decline. But current demand for AI and forecasts for AI growth don't support the idea of a collapse of the entire market. For example, leading cloud service providers from Amazon to Alphabet and Microsoft have spoken of soaring demand -- and the need to invest to meet this demand as the AI boom continues.

So, we can see that AI customers are looking for capacity to run their workloads, and Nvidia customers such as these cloud companies say they will need to invest -- in elements such as AI chips -- to keep up with it.

All of this supports Nvidia's forecast a few months ago that AI infrastructure spending may reach as much as $4 trillion by 2030. And this is the key piece of evidence that offers us a clue about Nvidia's earnings and stock performance in the years to come.

Could rivals unseat Nvidia?

If infrastructure spending approaches or reaches that level, Nvidia, as the leading chip provider, is likely to see explosive growth. "But what about rivals and their potential to take market share?" you might ask.

While rivals may carve out some share, it's unlikely it will be enough to disrupt Nvidia's leadership. And this brings us back to Nvidia's commitment to innovation. The company already is a step ahead of rivals with its current platform -- this lead makes it easier for Nvidia to remain ahead as long as it continues to launch new products as promised.

All of this offers us a good reason to be optimistic about Nvidia's earnings growth and share price performance over the coming years.

Now, let's get back to our question: Does this mean you should buy Nvidia before 2026? Whether you buy Nvidia today or in a month, if you hang onto the stock for the long term, the timing of your purchase isn't likely to impact your returns.

That said, the evidence that's piled up suggests Nvidia is a fantastic long-term AI stock to own -- and it could be the biggest beneficiary of AI infrastructure spending over the next few years. All of that means, if you're looking for AI stocks to buy before the end of the year, Nvidia should be at the top of your list.

Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.