Nvidia's Lackluster Start to 2026 Amid Strong AI Spending Forecasts
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Market Performance: As of January 26, Nvidia's (NVDA) stock is flat with a market cap of $4.5 trillion, contrasting with the S&P 500's 1.6% rise, indicating investor concerns over its valuation may be diverting funds to other stocks.
- AI Spending Growth: According to a report from Gartner, AI spending is expected to exceed $2.5 trillion in 2026, a 44% increase, and projected to reach $3.3 trillion by 2027, suggesting strong long-term growth potential despite current investment skepticism.
- Robust Financials: Nvidia reported $57 billion in sales for the period ending October 26, 2025, with a growth rate of 62% and a net income increase of 65% to $31.9 billion, demonstrating solid performance even if growth isn't as explosive as before.
- Reasonable Valuation: Currently trading at a forward P/E ratio of less than 25, Nvidia's valuation appears attractive for a leading AI stock, and if Gartner's forecasts hold true, the stock could be undervalued at its current levels.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 191.520
Low
200.00
Averages
264.97
High
352.00
Current: 191.520
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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