By Will Ebiefung
Publication Date: 2025-12-31 17:15:00
The artificial intelligence boom is getting long in the tooth.
It’s been roughly three years since OpenAI’s ChatGPT introduced the world to generative artificial intelligence (AI), and the boom shows no signs of slowing anytime soon.
This trend is excellent news for Nvidia (NVDA +0.73%) because companies continue to spend billions on its cutting-edge computing hardware. Demand still outstrips supply, allowing the chipmaker to maintain incredibly high growth and profit margins.
Going into 2026, the factors that helped Nvidia soar in 2025 are still in play. And the company’s core business is so strong that its $4.63 trillion market cap looks reasonable compared to earnings and growth. That said, the future of the generative AI opportunity is uncertain, which could have negative implications for the stock.
Let’s dig deeper to see what might come next.
Image source: Getty Images.
Nvidia’s stock is not a bubble
Perhaps the most surprising thing about Nvidia stock is how reasonably priced it is. With a forward price-to-earnings (P/E) multiple of 25, shares are actually slightly cheaper than the Nasdaq-100 estimate of 26 and trade at a sharp discount to other big tech stocks like Amazon and Apple, which boast forward P/Es of 28 and 33, respectively. This fact is even more surprising when you consider Nvidia’s explosive growth.
Third-quarter revenue soared 62% year over year to a record of $57 billion, driven by strength in Nvidia’s data center segment, where it records…
