Nvidia (NVDA 1.47%) has had a lackluster 2025 compared to 2023 and 2024. In both of those years, the stock more than doubled, but in 2025, it's only up about 30%. That's still outperforming the broader market, but not by as much as you may think, considering Nvidia's excellent growth and results.
Looking ahead to 2026, the trends that prevailed during the previous three years are still ongoing, which could set Nvidia up for an excellent 2026. But will it be enough for the stock to double?
Image source: Getty Images.
Nvidia's success is tied to the spending habits of others
Nvidia makes graphics processing units (GPUs), which are accelerated computing units that can process multiple calculations in parallel. These computing units are the muscle behind most of the transformative artificial intelligence technology we experience today. Nvidia has a strong grip on the data center computing market. In Q3 FY 2026 (ended October 2026), Nvidia's data center revenue totaled $51.2 billion -- up 66% year over year. Two of Nvidia's biggest competitors are Advanced Micro Devices, which also makes GPUs, and Broadcom, which collaborates directly with AI hyperscalers to design custom AI computing chips. In their most recent quarters, AMD grew data center revenue at a 22% to $4.3 billion, and Broadcom's AI semiconductor revenue increased 74% year over year to $6.5 billion. While Broadcom may be growing faster than Nvidia, it's still much smaller. AMD is both smaller and growing far slower than Nvidia, which is a poor position to be in.
NASDAQ: NVDA
Key Data Points
While investors may be worried about Nvidia's dominance waning, they shouldn't. Nvidia is clearly the best option available for, and the results back that up. Nvidia's CEO, Jensen Huang, noted that the company is "sold out" of cloud GPUs, highlighting the incredible demand for computing.
That demand isn't expected to die down anytime soon. After record-setting capital expenditures in 2025 by the AI hyperscalers, they have all informed investors that 2026 will be a year of further growth. This bodes well for Nvidia's future, allowing it to extend its strong growth into another year.
However, Nvidia doesn't think this buildout will stop in 2026. They estimate that global data center capital expenditures will reach $3 trillion to $4 trillion by 2030. That's up significantly from the $600 billion in 2025.
Should AI spending continue to trend in this direction, Nvidia's stock will continue to outperform the market, making it an excellent stock to own. But will it be enough for the stock to double in 2026?
A double from Nvidia would be a tall task
If we assume that Nvidia will grow at about the same pace as data center capital expenditures are expected to grow through 2030, that would assign a compound annual growth rate (CAGR) of 46% at the high end. That's well short of the 100% growth needed to ensure an Nvidia double, so the remaining slack must be picked up by an increase in Nvidia's valuation.
At less than 38 times forward earnings, Nvidia's stock isn't cheap.
NVDA PE Ratio (Forward) data by YCharts
However, considering Nvidia's projected growth rates, I'd argue that it isn't expensive either. As a result, any further valuation increase should come solely from business performance. This isn't expected to provide 100% growth, so I doubt Nvidia stock will double in 2026. If it did, the company would be worth nearly $10 trillion by market cap.
Still, Nvidia remains an excellent stock pick due to all of the money being spent on AI data centers. We've barely scratched the surface of what's possible with AI, and there's still a long runway of growth. Nvidia will be there to supply the computing power needed to fuel this buildout, making it a great stock to own in 2026, even if it's unlikely that it will double.
