Prediction: This Will Be Nvidia's Stock Price in 2026

There's no denying that Nvidia (NASDAQ: NVDA) has benefited handsomely from the race to adopt artificial intelligence (AI). The graphics processing unit (GPU) -- which the company originally designed to render lifelike graphics in video games (hence the name) -- has since been adapted for the more rigorous demands of AI, becoming the gold standard in the process.

Since the AI boom kicked off in early 2023, Nvidia stock has surged 1,130% (as of this writing), minting money for investors along the way. Yet one of the biggest debates on Wall Street is where Nvidia stock goes from here and what the future holds for shareholders.

A review of the available evidence provides insight into where Nvidia's stock price might be by the end of 2026.

Image source: Nvidia.

Data center darling

The secret to Nvidia's success is the adaptability of the GPU. After becoming the market share leader for discrete desktop GPUs, the company set its sights higher. The computational horsepower provided by these chips comes from parallel processing. The GPU speeds up computationally intensive chores by breaking them down and assigning these smaller tasks to various "cores" or processors within the GPU, thereby completing the job in far less time. This process was instrumental in the rise of AI.

Since AI processing requires a multitude of GPUs working in unison, data centers have become the hotbed of AI activity. Nvidia is profiting from the data center boom, and many believe it's still the early stages of its buildout.

In an investor presentation from early October, Nvidia estimated there would be between $3 trillion and $4 trillion in AI infrastructure (read "data center") spending by 2030 to support the growing demand for AI. Nvidia is the undisputed leader in the data center GPU market with a dominant 92% share, according to IoT Analytics. This leading position suggests that the company remains well-positioned to benefit from the ongoing adoption of AI.

In October, Huang revealed that Nvidia had a backlog of $500 billion, orders it expects to fill during the six quarters ending in early 2027.

Fun with numbers

Assuming Nvidia's backlog estimates are accurate (and we have no reason to believe they aren't), we can use available information and make some assumptions to calculate what Nvidia's stock price could be by the end of 2026.

For its fiscal 2026 third quarter (ended Oct. 26), Nvidia reported revenue of $57 billion. The company also provided a Q4 forecast calling for revenue of $65 billion. Assuming its outlook is accurate, that accounts for $122 billion, meaning Nvidia expects to generate the remainder, or revenue of roughly $378 billion, in fiscal 2027 (or calendar 2026).

Nvidia currently has a market cap of roughly $4.37 trillion and a forward price-to-sales (P/S) ratio of 20 (as of this writing). If its P/S remains constant, and if Nvidia generates revenue of $378 billion in 2026 -- a daunting task -- its stock price could jump 75% to $315 per share, pushing the company's market cap to roughly $7.7 trillion. Given Nvidia's trajectory over the past few years, this certainly seems possible.

The fine print

It's important to remember that this is fun with numbers and nothing more than a thought experiment. Seasoned investors know that things don't always go to plan. Rivals have developed competing GPUs, and application-specific integrated circuits (ASICs) are being customized for specific use cases -- both of which could erode Nvidia's market share. Estimates regarding the pace of AI adoption could be too ambitious, or economic conditions could sour.

With these caveats out of the way, let's take a step back to look at the big picture. Nvidia is the market leader for data center GPUs, leaving scraps for its rivals. The company maintains a strong competitive moat thanks to CUDA, Nvidia's library of software tools used by developers to get the best performance out of its GPUs. New applications for AI are being discovered regularly as companies and researchers alike seek to capitalize on the efficiency improvements resulting from advances in AI. Even if Nvidia doesn't reach that lofty threshold by the end of 2026, its growth trajectory is undeniable, and the stock will likely be a market-beating investment from here.

Finally, Nvidia sports an attractive valuation, selling for just 24 times next year's expected earnings. Given the magnitude of the opportunity and Nvidia's dominant position, I'd submit that's a fair price to pay for an industry leader driven by strong secular tailwinds.

Danny Vena, CPA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.