Key Points
Nvidia (NASDAQ: NVDA) investors have had it good for several years. In 2023, 2024, and 2025, it produced market-crushing returns, making it one of the best stocks to own during each of those years. However, 2026 hasn’t been that way. The stock is up 5% so far in 2026, which isn’t nothing, but compared to the returns that Nvidia investors have enjoyed in recent years, it feels like an absolute failure. On another note, its market-crushing status is in jeopardy for 2026, as the S&P 500 is up nearly 10% for the year.
With Nvidia stock looking like a dud this year, many investors are wondering whether now is the time to cash out and look for other investment opportunities, or to load up on Nvidia shares. Let’s take a look, as not everything is as it appears with Nvidia.
Nvidia’s run is far from over
Nvidia was the top AI stock to own over the past three years, due to its market position. Nvidia designs graphics processing units (GPUs) and the hardware that supports them. Although it doesn’t own any of the fabrication process itself, it works with several companies that manufacture its GPUs, which it then sells to a wide range of customers.
Before 2023, Nvidia’s business was more balanced. However, the massive demand for AI data centers has driven this lineup of GPUs into high demand, and Nvidia’s product line has become the go-to for several AI hyperscalers and cloud providers. Nvidia has a complete ecosystem of products that gives its clients everything they need to run an Nvidia-powered data center, locking in clients once they’ve chosen to use its products.
This bodes well for the future, as AI hyperscalers are spending a massive amount of money this year and beyond to continue building out their AI computing footprints. The big four AI hyperscalers plan to spend around $650 billion on data center capital expenditures this year. Next year, Nvidia projects that this figure could reach $1 trillion. That means more growth is coming to Nvidia, and the investing story is far from complete. Wall Street analysts project 82% revenue growth for this year and 41% next year, so there’s another external source that’s projecting even more growth for Nvidia.
However, the stock price doesn’t reflect that.
NVDA PE Ratio (Forward) data by YCharts.
Nvidia trades at 21.7 times forward earnings, essentially the same price tag as the S&P 500. This conveys that the market believes Nvidia will be a market-average stock after 2026’s growth is accounted for. However, Wall Street analysts don’t believe that, as they’re guiding for major growth next year. That’s why the stock looks so cheap when next year’s earnings are used to value the stock.
As a result, I think Nvidia is an excellent stock to buy now. None of next year’s growth has been priced in, which could lead to strong returns toward the end of this year.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
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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.
