It's been off to the races for Nvidia (NVDA +2.52%) ever since its GPUs became an essential building block for artificial intelligence (AI). The AI data center boom has already made Nvidia one of the world's largest technology companies, and with a massive market cap of $5.1 trillion, it can feel as if there isn't much more upside left.
But investors shouldn't assume that's the case. The company's rampant growth has kept the stock's valuation surprisingly reasonable, and its next-generation Vera Rubin AI chip platform could be yet another catalyst that takes the stock to new heights.
Here are three reasons why Nvidia stock could keep soaring through 2026.
1. Sales could double within the next two years
The strongest indicator of Nvidia's future growth is arguably the AI capital expenditures of its customers, the companies racing to build the data centers and other infrastructure to support broad AI adoption. Fortunately for Nvidia, these companies continue to put the pedal to the metal. Hyperscalers, including Meta Platforms, Microsoft, Alphabet, and Amazon, are planning higher capital expenditures in 2026.
Nvidia CEO Jensen Huang. Image source: Nvidia.
These tailwinds should continue to blow at Nvidia's back. Goldman Sachs estimates that AI compute spending will grow from approximately $494 billion this year to $1.13 trillion by 2031. Meanwhile, CEO Jensen Huang has said that he sees at least $1 trillion in revenue from Nvidia's Blackwell and Rubin platforms through the end of 2027.
Wall Street analysts estimate that Nvidia will generate approximately $555 billion in revenue for the company's next fiscal year, ending January 2028. In other words, sales could roughly double within the next two years, based on Nvidia's trailing 12-month revenue of $253 billion. If you were worried about Nvidia's growth, all signs point to big things ahead.
2. Vera Rubin is Nvidia's next big step forward
There should be more noise about the shift taking place in the AI industry. Compute is broadening from AI training to inference. Whereas training develops an AI model, inference is the process by which a trained model generates outputs. Inference places greater emphasis on token efficiency. After all, it doesn't matter how powerful an AI model is if it's too slow or expensive for customers to use effectively.
Vera Rubin is not one or two chips but seven, including a GPU, a CPU, Ethernet switches, and other purpose-built chips. It essentially expands Nvidia's footprint in the data center and makes its ecosystem that much stickier.
Nvidia also engineered the platform with inference in mind. The company states that Rubin can reduce inference token costs by up to 10 times those of Blackwell. That gives hyperscalers a strong reason to invest in Vera Rubin, as they will seek efficiency to help monetize their AI investments over the coming years.
NASDAQ: NVDA
Key Data Points
3. The stock's valuation remains compelling relative to Nvidia's growth
Growth isn't the only factor in a stock's performance. The price that investors pay for a stock matters a lot, especially in the short term. Therefore, Nvidia's valuation will likely have a big impact on how shares perform through the remainder of 2026. Right now, Nvidia is trading at just over 23 times its 2026 earnings estimates.
It's fair to wonder whether the AI boom has elevated Nvidia's earnings, making the stock seem less expensive than it would in a normal business climate. That would be a legitimate concern, but this isn't an ordinary cycle in size or duration. As noted above, the AI investment cycle still seems to have ample tread left. Analysts estimate that Nvidia could grow its earnings by an average of nearly 52% annually over the next three to five years.
Such strong growth prospects make the stock a strong buy at this valuation, with room for upside. Nvidia could absolutely keep soaring through 2026, assuming the business continues meeting the market's expectations.
