By Brett Schafer
Publication Date: 2025-12-21 17:00:00
Key Points
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Nvidia is growing quickly, but is posting record profit margins that could reverse if AI infrastructure supply matches demand.
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The stock trades at a high P/E ratio.
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Nvidia stock is not guaranteed to crash, but risks do persist for the company if AI spending slows down in 2026.
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Shares of Nvidia (NASDAQ: NVDA) have begun to sputter. The stock is close to flat since this summer, with investors worried about peak spending on artificial intelligence (AI) computer chips. With a share price that has risen over 1,000% in the last five years, who can blame them? Nvidia is now the largest company by market cap in the world, and while it is growing its revenue and earnings at an incredible rate right now, that could come to a halt if the AI spending boom collapses.
Does that mean Nvidia stock is set to crash next year?
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Massive current growth, cyclicality risks
There is no denying that Nvidia is growing rapidly right now. It has a lock on the AI computer chip market, meaning that virtually every large technology provider or start-up building AI models needs to buy its products. Last quarter, revenue grew 62% year over year to $57 billion, with data center revenue growing even faster.
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