History Says Nvidia's 2026 Run Is Just Getting Started
Nvidia's stock has historically performed well during Q1 earnings season due to artificial intelligence investing fever, and this year is expected to follow a similar trend. The stock is currently undervalued, with a forward P/E ratio of 25, and could rise to 32 times forward earnings by the end of May, amounting to a nearly 30% upside.
Nvidia's stock tends to be undervalued at the start of the year and then booms during Q1 earnings season due to artificial intelligence investing fever. In 2024, it rose 32% in May, and this year it had a strong April, rising by around 20%. Nvidia's forward P/E ratio is currently 25, lower than its historical valuation norms. The company's revenue growth was 73% year over year in the fourth quarter, and management guided for 77% growth in Q1. If Nvidia's valuation rises to 32 times forward earnings by the end of May, it could amount to a nearly 30% upside. Nvidia's valuation has commonly reached 40 times forward earnings as the end of a year approaches, and if AI hyperscalers continue to spend, Nvidia could have another strong year of growth ahead.
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