Could Nvidia Be Headed for a Crash in 2026? Here's What History Says.

The bigger they come, the harder they fall. And no company in the world is bigger than Nvidia (NASDAQ: NVDA) right now – at least, based on market cap.

Over the last 10 years, Nvidia's share price has skyrocketed by roughly 27,380%. But could the GPU stock be headed for a crash in 2026? Here's what history says.

Image source: Nvidia.

Nvidia's previous crashes

There isn't a hard-and-fast definition of how much a stock must fall before the decline qualifies as a crash. However, I suspect most people would view a drop of 20% or more over a short period as a bona fide crash. Nvidia has had several of them in the past, including during the last 10 years, when its stock delivered a staggering 274x gain.

For example, Nvidia's share price sank 30% between early April and early June in 2019. This sell-off was partly due to the company slashing its revenue guidance amid lower-than-expected sales in the data center and gaming markets.

Like most stocks, Nvidia crashed in the first quarter of 2020 during the early days of the COVID-19 pandemic. Between Feb. 19, 2020, and March 16, 2020, Nvidia's shares plunged nearly 38% – a steeper decline than the S&P 500's (SNPINDEX: ^GSPC) sell-off of almost 30%.

Nvidia's stock plummeted roughly 27% between July 8, 2024, and Aug. 7, 2024. Although investors welcomed the company's 10-for-1 stock split in June 2024, the excitement quickly faded amid U.S. government restrictions on AI chip exports to China.

The most recent crash for Nvidia came just last year. From Jan. 6, 2025, to April 4, 2025, the GPU maker's share price dropped 37%. Concerns about the Trump administration's tariffs played a key role in this decline.

Good news, bad news

You might have noticed that Nvidia's stock has crashed in four of the last seven years. And I didn't include Nvidia's more gradual 60% sell-off during the first nine months or so of the bear market of 2022.

The bad news is that if recent history is any guide, Nvidia's stock is more likely than not to crash again in 2026. However, there's also good news for investors.

For one thing, the factors behind Nvidia's steep declines in previous years don't appear to be present now. The data center market remains strong. There's reason for encouragement about Nvidia's ability to ship AI chips to China. The company has managed to navigate the Trump administration's trade policies. COVID-19 isn't as serious a problem as it was in 2020.

Even better, even if Nvidia's stock crashes, history shows that the decline should be only temporary. Remember the steep sell-off mentioned in 2019? Nvidia's stock finished the year up 76%. In 2020, the chipmaker's share price skyrocketed 291% despite the COVID-19 crash earlier in the year. In 2024, Nvidia's stock soared 171%. Last year, it delivered a 39% gain.

How will Nvidia perform in 2026?

I don't think we can look to history to predict how Nvidia's stock will perform in 2026. However, we can examine other clues to get a feel for what might happen.

The demand for AI shows no signs of waning. Nvidia's Blackwell sales continue to rise. The company's new Rubin GPUs are on track to launch later this year. Adoption of agentic AI seems to be growing and could provide another tailwind for Nvidia. CEO Jensen Huang believes that "the transition to agentic AI and physical AI [AI that interacts with the physical world] will be revolutionary."

In addition, Nvidia's valuation isn't nearly as scary as it has appeared in the past. The GPU maker's shares trade at a forward price-to-earnings ratio of 24.3. That multiple isn't low, but it's not exorbitantly high.

Based on all these factors, I predict that 2026 will be a good year for Nvidia. And if the stock does crash, it will probably present a great buying opportunity.

Keith Speights 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.