NVIDIA shares trade 12% below their October record highs as 2025 closes, presenting a potential entry point for investors eyeing the AI chip leader's 2026 prospects. The stock remains up 41.88% year-to-date despite the pullback, maintaining its position as the second-best performer among the "Magnificent 7" stocks behind only Alphabet.
Raymond James analysts project 45% upside to $272 per share, citing NVIDIA's $275 billion backlog for 2026 and potential China revenue recovery. Among 69 analysts, Nvidia has a median target price of $250 per share, representing 31% upside from current levels around $190. NVIDIA's forward price-to-earnings ratio of 25x compares favorably to Intel's 61x and AMD's 33x, despite superior margins and growth.
Bank of America forecasts global chip sales reaching $1 trillion by 2026, driven by 30% annual growth in AI accelerator demand. NVIDIA's Blackwell GPU shipments could peak at 7.8 million units next year, according to Raymond James estimates. The company's current quarter earnings are expected to reach $1.44 per share, a 69% year-over-year increase that challenges bubble concerns.
China represents both uncertainty and opportunity for NVIDIA. The Trump administration initially blocked H20 chip exports before approving them with a 15% revenue cut, but Chinese companies avoided the chips over security concerns. Recent approvals for more powerful H200 chips with a 25% revenue cut could generate $7 billion in additional revenue, according to Raymond James analysis.
NVIDIA's 2025 deal-making spree included a $20 billion non-exclusive licensing agreement with Groq, the company's largest deal to date. Other investments reached up to $100 billion in OpenAI, $5 billion in Intel, $10 billion in Anthropic, and $2 billion reportedly in Elon Musk's xAI. The company maintains over $100 billion in cash reserves to fund strategic moves.
The NVIDIA GTC AI conference scheduled for March 16-19, 2026 in San Jose will feature CEO Jensen Huang's keynote and likely reveal new product roadmaps. At GTC 2025, NVIDIA announced its Blackwell Ultra GPU and Rubin platform successor while shifting focus from generative to agentic AI systems.
Analysts highlight NVIDIA's software moat through its CUDA ecosystem, which underpins developer loyalty and reinforces dominance in accelerated computing. Morningstar's Brian Colello notes that while tech giants may seek alternative suppliers, these efforts will "only chip away at NVIDIA's AI dominance" due to its full-stack hardware and software advantage.
Historical patterns show NVIDIA shares average nearly 6% gains in January over the past four years, suggesting seasonal strength heading into 2026. The stock's technical position above major moving averages indicates continued bullish control across multiple timeframes.
Despite trading at double its early April price, NVIDIA's valuation appears reasonable relative to earnings growth projections. The company's $4.63 trillion market capitalization makes it the world's most valuable public company, yet analysts see substantial upside as AI infrastructure spending accelerates through 2026.
