Is Nvidia Stock a Buy for 2026?

Nvidia (NASDAQ: NVDA) is the world's largest company, sitting at a $4.6 trillion market cap. It rose to this level in 2025 after three years of impressive growth, thanks to massive spending from companies in the artificial intelligence (AI) realm. However, many investors are worried that Nvidia may be losing its edge or won't be as successful a stock pick for 2026.

This is a big deal, as many investors have large exposure to Nvidia either through individual holdings or in an index. Is Nvidia stock in trouble this year? Or is there still room to run?

Image source: Getty Images.

Nvidia's stock is fairly valued for its growth level

First, let's address one of investors' primary concerns: Is Nvidia overvalued? Nvidia is fully profitable, so using the price-to-earnings (P/E) metric is a great way to value the stock. However, it's also growing rapidly, so using the trailing P/E ratio isn't the best move. Using the trailing P/E in conjunction with its forward earnings multiple is a great way to assess the stock, and Nvidia doesn't look too pricey from either measure.

NVDA PE Ratio data by YCharts.

47 times trailing earnings may seem like a lot, but with Nvidia's revenue growth coming in at 62% year over year in third-quarter fiscal year 2026 (ending Oct. 26, 2025), that isn't all that expensive. If you compare Nvidia's growth rate to some of its big tech peers alongside its valuation, it's clear that Nvidia has a premium, but at a much faster growth rate.

NVDA PE Ratio data by YCharts.

Now, once 2026 earnings projections are used, this overvalued narrative is flipped on its head.

NVDA PE Ratio (Forward 1y) data by YCharts.

That's because Nvidia is expected to deliver impressive growth again in 2026 (which makes up most of Nvidia's FY 2027, ending January 2027). Wall Street analysts project that Nvidia will deliver 50% revenue growth next year, which is an incredible sign for the company.

That alone makes Nvidia worth considering, but it isn't planning on stopping there.

AI growth will drive Nvidia higher beyond 2026

It's no secret that AI hyperscalers are spending massive amounts of money on data center construction. While this money flows to multiple businesses, computing units suppliers like Nvidia receive the largest chunk of the pie. So, when you hear about a new data center project, Nvidia is likely a massive recipient.

Nvidia is also launching a new chip architecture in 2026, Rubin. The gains from this new chip design will be massive, but also cause an infrastructure change because Rubin utilizes 800-volt power. Nvidia also sells many components necessary for this change, so it will benefit in more ways than one. Even its existing Blackwell chips are sold out -- a strong sign that Nvidia's graphics processing units (GPUs) are still the most desirable products in the AI computing realm.

Nvidia isn't going anywhere anytime soon. It's one of the most critical companies in the AI realm, and controls the flow of the most desirable hardware. I believe that Nvidia will continue to be a successful stock pick both in 2026 and beyond, as many projections point toward the AI computing market expanding through at least 2030. With Nvidia primarily servicing this market, it will be a huge beneficiary.

It's also being allowed to start selling chips in China again, which will provide a nice step up in growth sometime this year. China is a massive AI customer that has been shut out since April 2025. Even though Nvidia will have to pay a tax to export to China, it will be worth it, as that market is just as large as the U.S.

I'm bullish on Nvidia stock for 2026, and I think investors should maintain their overexposure to this stock. There are few as surefire bets to beat the market as Nvidia, as long as AI hyperscalers continue to spend big on data centers.

Keithen Drury has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Apple, 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.