By Keithen Drury
Publication Date: 2026-01-10 22:00:00
Nvidia’s stock is primed to rocket higher this year.
Nvidia (NVDA 0.05%) is the world’s largest company, sitting at a $4.6 trillion market cap. It rose to this level in 2025 after three years of impressive growth, thanks to massive spending from companies in the artificial intelligence (AI) realm. However, many investors are worried that Nvidia may be losing its edge or won’t be as successful a stock pick for 2026.
This is a big deal, as many investors have large exposure to Nvidia either through individual holdings or in an index. Is Nvidia stock in trouble this year? Or is there still room to run?
Image source: Getty Images.
Nvidia’s stock is fairly valued for its growth level
First, let’s address one of investors’ primary concerns: Is Nvidia overvalued? Nvidia is fully profitable, so using the price-to-earnings (P/E) metric is a great way to value the stock. However, it’s also growing rapidly, so using the trailing P/E ratio isn’t the best move. Using the trailing P/E in conjunction with its forward earnings multiple is a great way to assess the stock, and Nvidia doesn’t look too pricey from either measure.
NVDA PE Ratio data by YCharts.
47 times trailing earnings may seem like a lot, but with Nvidia’s revenue growth coming in at 62% year over year in third-quarter fiscal year 2026 (ending Oct. 26, 2025), that isn’t all that expensive. If you compare Nvidia’s growth rate to some of its big tech peers alongside its valuation, it’s clear that Nvidia has a premium, but…
