Nvidia(NASDAQ: NVDA) Shares have risen 1,200% since January 2023, when the viral adoption of ChatGPT led to intense investor excitement.
Before I share my prediction for where Nvidia stock will trade in December 2026, I want to discuss the most bullish and most bearish predictions of Wall Street analysts:
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At the optimistic extreme, Mark Lipacis at Evercore recommend buying Nvidia. Its target price of $352 per share implies an 83% upside to the current share price of $192.
At the bearish extreme, Seaport Research’s Jay Goldberg recommends selling Nvidia. Its price target of $140 per share implies a 27% downside to the stock’s current price.
Here’s what investors should know.
Image source: Getty Images.
Nvidia is an accelerated computing company best known for its graphics processing units (GPUs), chips that accelerate complex data center workloads such as artificial intelligence (AI). Nvidia has about 85% market share in the AI accelerator market, and the company is well positioned to maintain its leadership thanks to its full-stack strategy.
In addition to designing GPUs, Nvidia develops adjacent data center hardware such as processors and networking equipment. The company integrates these components into rack-scale systems, providing customers with a turnkey AI infrastructure solution. In addition, Nvidia has an unmatched ecosystem of software tools that help developers build GPU-accelerated applications.
This full-stack strategy gives Nvidia a competitive edge because it allows the company to optimize data center systems for performance and energy efficiency in ways that its competitors cannot. Consequently, while Nvidia GPUs are very expensive, its systems generally have a lower total cost of ownership than the alternatives.
Evercore analyst Mark Lipacis says the moat will not only help Nvidia maintain its lead in data center GPUs, a market forecast to grow 36 percent annually through 2033, but also capture a larger percentage of data center spending. In addition, Lipacis expects Nvidia to be a major winner as the AI (autonomous vehicles and robots) physics revolution unfolds.
Nvidia’s full-stack approach should be just as advantageous in that market. The company provides the data center hardware and software needed to train the models. It also provides the simulation engine needed to validate these models. And it provides the embedded processors needed to run physical AI applications in autonomous cars and robots.
Seaport Research’s Jay Goldberg sees growing demand for custom AI chips as a problem for Nvidia. In particular, AlphabetIts Tensor Processing Units (TPUs) have emerged as a serious challenger to Nvidia GPUs, with recent reports indicating Meta platforms and Anthropic will spend billions on tokens in the coming years.
However, while many of Nvidia’s biggest customers have implemented custom AI accelerators, including Amazon and Microsoftthose chips lack out-of-the-box software tools, meaning developers have to build them from scratch. Few companies have the resources, according to Nvidia CEO Jensen Huang: “There just aren’t that many teams in the world that are great at building these incredibly complicated things.”
Beyond the competition, Goldberg believes Nvidia’s margins will be squeezed in the year ahead. One reason is that high-bandwidth memory (HBM) chips, which play a critical role in feeding data to GPUs, have skyrocketed due to an unprecedented supply shortage. Another reason is that Nvidia has committed to spending $26 billion on cloud capacity over the next six years, primarily for research and development.
Goldberg raises reasonable concerns, and investors should monitor Nvidia’s gross margins, but I don’t think his case is strong enough to justify selling the stock. In fact, investors should consider buying shares. Valuation of 47 times earnings is reasonable for a company whose earnings are forecast to grow 37% annually over the next three years.
I think Nvidia will trade at $260 per share by December 2026. That’s about a 35% upside to the current share price of $192. We selected this figure because it splits the bullish and bearish extremes and represents a slight premium to the median price target of $250 per share.
“Analysts have understated AI capex (capex) every quarter for the past two years, suggesting a continued upside risk to the sustainability of the broader AI trade,” according to Goldman Sachs strategies. To that end, Nvidia’s earnings could rise faster than Wall Street anticipates, in which case the stock could exceed its median price target.
In addition, CEO Jensen Huang says self-driving cars are the next frontier of the AI boom, and Nvidia builds products that most self-driving car companies use. I think investors will become more aware of this fact as Waymo and adze is deploying more robotaxis this year, which reinforces my belief that Nvidia can beat its median price target by December 2026.
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Trevor Jennewine has positions in Amazon, Nvidia and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Evercore, Goldman Sachs Group, Meta Platforms, Microsoft, Nvidia and Tesla. The Motley Fool has a disclosure policy.
Prediction: Nvidia stock to rise to this price in 2026 as AI boom expands from data centers to Robotaxis was originally published by The Motley Fool
