Is This Artificial Intelligence (AI) Winner About to Take Off in 2026?
Key Points
Wall Street expects huge growth from Nvidia in 2026.
Nvidia's stock could nearly double next year if the right conditions are met.
- 10 stocks we like better than Nvidia ›
Over the past three years, there have been few better stocks to own than Nvidia (NASDAQ: NVDA). From 2023 to 2025, the stock has risen by more than 800%. However, most of Nvidia's returns were from 2023 and 2024, as it only rose 39% in 2025.
This makes me curious whether Nvidia's stock is about ready to take off in 2026. For fiscal year 2026 (ending January 2026), Wall Street analysts expect 63% revenue growth, so its stock rose far more slowly than its revenue grew. This could be a clear sign that Nvidia's stock is about to take off, and I think 2026 could be a far better year for the shares than 2025.
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If you don't own a ton of Nvidia stock, now is the time to load up
For fiscal year 2027 (ending January 2027), Wall Street analysts expect 52% revenue growth. That clearly shows that demand for its graphics processing units (GPUs) isn't slowing down. Nvidia has told investors that this artificial intelligence computing megatrend will last through at least 2030, leaving several years of incredible growth to go.
At the midpoint, Wall Street analysts believe that Nvidia will generate $7.66 in earnings per share (EPS) next year. Next, we need to determine a reasonable valuation for Nvidia. The four next-largest companies trade at nearly identical price-to-earnings (P/E) ratios, so using a valuation of 33 times earnings is a fair analysis.
AAPL PE Ratio data by YCharts. PE Ratio = price-to-earnings ratio.
With a P/E ratio of 33 and EPS of $7.66, that would price the stock at $253 by the end of the fiscal year. That's a 35% gain, which is slightly less than its 2025 performance.
However, I don't think it's fair to value Nvidia at the same P/E ratio as its big tech peers. The reason? None of them is growing remotely as fast as Nvidia. Currently, Nvidia has a P/E ratio of 46, which is probably worth it for the growth it's delivering. If Nvidia maintains a P/E of 46, then its stock price would be $352 by the end of the fiscal year -- or about an 87% return.
If I present you with a stock that likely has a one-year return floor of 35% or a ceiling of 87%, you'd likely go all-in on that stock. That's where I expect Nvidia to be throughout 2026, making it a strong buy right now.
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Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
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