Forget the AI Bubble and Buy Nvidia Stock for 2026: Here’s Why

While Nvidia (NVDA) stock is still outperforming the S&P 500 Index ($SPX) this year, it has lost over 17% from its recent highs. NVDA has been the flagbearer of the artificial intelligence (AI) trade and delivered stellar returns in 2023 and 2024, which helped it become the first-ever company to command a $5 trillion market cap.

However, we have seen a realignment of sorts among AI stocks over the last three months. For instance, Apple (AAPL) and Alphabet (GOOG) (GOOGL), which were perceived to be AI laggards, have rebounded from their lows, and the Google parent is now the best-performing “Magnificent Seven” stock this year. On the other hand, Meta Platforms (META) and Nvidia, which outperformed spectacularly over the last two years, have been quite grounded of late.

Nvidia’s Financial Performance Has Been Stellar

Nvidia’s financial performance has been quite impressive, though, and in its fiscal Q3 2026, the Jensen Huang-led company reported revenues of $57 billion, which were up 62% year-over-year (YoY). The quarter-over-quarter (QoQ) increase in Nvidia’s revenue was $10 billion, which, for context, is higher than the total quarterly revenues it used to post before AI really took off. The strong topline growth is flowing to Nvidia’s bottom line, and EPS rose 67% to $1.30 in fiscal Q3. What makes the growth all the more astonishing is that the company achieved this…