The rise of NVIDIA Corporation (NVDA) has been extraordinary. Once a small graphics chip maker, it now powers data centers, artificial intelligence (AI) systems and next-generation vehicles, becoming one of the most influential technology leaders on Wall Street. But the history of the AI chip stock has felt like a rocket ride with a few air pockets along the way.
Not long ago, NVDA briefly touched the rarefied $5 trillion market cap club, fueled by breakneck revenue growth and near-total dominance of the AI chip market. Then came the setback. Stocks cooled as rumors of an AI bubble grew louder and investors wondered how long this breakneck infrastructure spending could last. For a company this size, even perfection can be considered a price.
But as 2026 approaches, analyst Dan Ives and his team predict a tech world (and its investors) caught between excitement and anxiety. The AI revolution hints at a once-in-a-generation leap forward, but the trillions needed to power it naturally raise questions. Still, that scale of investment also indicates that a fourth industrial revolution is taking shape, with the United States firmly setting the pace.
The analyst believes that this crossroads makes 2026 a turning year. With tech stocks forecast to rise more than 20%, Nvidia’s dominance, growing demand drivers and potential access to China underpin a bullish case for $275. With that setup, let’s get into the details.
Santa Clara-based Nvidia hardly needs an introduction. Once celebrated as the king of gaming graphics, it has quietly reinvented itself as the backbone of modern computing. Its GPUs now power data centers, artificial intelligence, robotics and immersive digital worlds. The CUDA software platform locked developers into a powerful ecosystem, making Nvidia an industry standard rather than a vendor. With a market capitalization of nearly $4.4 trillion, Jensen Huang’s company has become the driving force of the AI economy.
That dominance has translated into a turbulent but rewarding stock market ride. Shares of the AI chip maker have risen throughout the year, pausing only to catch their breath. Despite a recent pullback, the stock is still rising strongly, reflecting investors balancing long-term confidence with short-term caution. After hitting a high of $212.19 on October 29, NVDA retreated around 15.5%, but still presents a powerful uptrend over longer horizons, up 36.8% year-to-date (YTD) and up 27.7% in the last six months alone.
The chart shows that momentum is cooling, not collapsing. The 14-day Relative Strength Index (RSI), which surpassed the overheated 80 zone during October’s euphoric high, has retreated to around 52. That reset indicates excess optimism is being removed, allowing the stock to stabilize rather than unravel. Volume has normalized along with price, reinforcing the sense of consolidation rather than distribution.
The MACD oscillator remains bullish. The MACD line remains above its signal line, confirming that the broader trend still favors buyers. Although the histogram has narrowed, suggesting a slower acceleration, bearish pressure remains contained. In practical terms, the bulls are still in control, even if they have eased off the accelerator.
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Nvidia’s valuation may seem expensive at first glance, with the stock trading around 41.09 times forward adjusted earnings, well above most of its peers. Still, it’s below its own historical average, which adds some perspective. For a company that generates strong double-digit earnings growth and maintains enviable margins, that premium seems more justified.
Importantly, Nvidia’s forward PEG ratio of around 1.03 times is below both the industry average and its long-term median, suggesting that the valuation, while elevated, is still supported by real growth rather than hype.
Nvidia’s third-quarter update felt more like another chapter in its AI-driven rise. On Nov. 19, shares rose nearly 3% as the company delivered results that comfortably beat Wall Street’s bar and paired them with optimistic guidance. Revenue rose 62.5% year over year (y-o-y) to $57.01 billion, beating expectations, while adjusted earnings rose 60.5% to $1.30 per share, reminding investors that scale has not slowed Nvidia’s momentum.
At the center of the story was the data center business, which remains the company’s growth engine. Sales there rose 66% annually to $51.2 billion, driven by insatiable demand for AI. Networking added its own spark, with revenue soaring 162% to $8.2 billion as NVLink, InfiniBand and Spectrum-X Ethernet gained traction. Gaming remained stable, recording 30% growth, while the automotive sector quietly advanced with a 32% year-over-year increase.
The tone of management was just as confident. CFO Colette Kress cited the Blackwell Ultra as the best-selling chip, while CEO Jensen Huang noted that cloud GPUs are effectively sold out. Addressing concerns about an AI bubble, CEO Huang struck a confident tone on the earnings call. He emphasized that Nvidia is not just another accelerator vendor, but rather a complete platform that encompasses pre-training, post-training, and inference. Backed by more than two decades of investment in CUDA-X, the company is also a leader in scientific computing, engineering simulations, computer graphics and advanced data processing, giving Nvidia breadth that few competitors can match. With management guiding fourth-quarter revenue to around $65 billion, +/- 2%, Nvidia’s growth narrative appears firmly intact.
Meanwhile, analysts following Nvidia forecast its fiscal 2026 fourth-quarter revenue to be $65.6 billion, with EPS expected to grow 69.4% year-over-year to $1.44. For all of fiscal 2026, the bottom line is projected to rise 50.5% annually to $4.41 per share before rising another 54% to $6.79 in fiscal 2027.
Dan Ives sees the technology sector entering a decisive phase before 2026. In Wedbush’s main technology outlook, he expects the sector to grow more than 20% as AI investments deepen in software, semiconductors and infrastructure. Strategic developments, including a potential AI partnership between Apple (AAPL) and Google (GOOG) (GOOGL), reinforce the scale of this transition. As for Nvidia, Ives remains especially confident.
It sees Nvidia as the world’s leading AI chip supplier, with demand drivers still underestimated by the market and added benefits from improved access to China. In Wedbush’s view, 2026 represents a turning point for AI development, and Nvidia stands out as the main beneficiary. Ives’ $275 price target suggests NVDA could rally as much as 51.9%.
Analysts are generally optimistic about NVDA’s growth prospects, giving the stock a “Strong Buy” consensus rating. Of the 48 analysts covering the stock, 44 advise a “strong buy”, while two suggest a “moderate buy”, one advises a “hold” and only one suggests a “strong sell”.
The average analyst price target for NVDA is $255.56, indicating an upside potential of 39.13%. Evercore ISI’s street high price target of $352 suggests the stock could rise as much as 91.63% from here.
On the date of publication, Sristi Suman Jayaswal had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
