NVIDIA stock price performed strongly in 2025, jumping to a record high of $212, making it the first company to reach a $5 trillion valuation. It has pulled back since then, moving to the current $186.50, amid concerns about the AI bubble. This article explores why the NVDA stock has more upside.
NVIDIA Stock is Cheap Based on Its Growth
One of the main catalysts for Nvidia is that its business is highly undervalued. For one, the company has a forward P/E ratio of 40 based on GAAP metrics and 39 based on non-GAAP metrics.
While these numbers are big, they are much smaller than those of other companies. For example, Tesla, a company whose growth has slowed, has a forward multiple of over 300. Similarly, Palantir, another top AI company, has a multiple of 306.
NVIDIA’s stock is also cheap given its growth and margins. Wall Street analysts expect the company’s annual growth rate in 2025 to be 63% and its growth this year to be 50%. Chances are that this year’s growth rate will be bigger than that, as the estimates have not factored in demand from China, where the company will start selling its H200 chips.
NVIDIA Corp is one of the most profitable companies on Wall Street, with a net profit margin of 53%. Adding its forward revenue growth and its profit margin gives a rule-of-50 metric of over 100%, making it one of the cheapest companies.
Meanwhile, a discounted free cash flow (DCF) valuation model shows that its ideal stock price is about $300 per share. This approach assumes that its free cash flow will jump from $37 billion in 2026 to $53 billion in 2028.
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NVDA Has Catalysts in 2026
NVIDIA stock has other catalysts in 2026. The most important one is that American hyperscalers are planning to keep boosting data center spending to gain market share.
Additionally, Chinese companies are boosting their purchases of these chips. A recent report noted that Nvidia has placed an urgent order with TSMC as Chinese firms ordered over 2 million units, much higher than the 700k it has in its inventory. This is notable as sales to China are not included in its forward guidance.
NVIDIA may also benefit as some of its investments become liquid with the planned IPOs. One of these is Anthropic, which plans to go public later this year. NVIDIA pledged to invest up to $10 billion in the company, which is well-known for its CUDA product.
There is also an expectation that OpenAI will go public this year, which is good news because Nvidia has made a big investment in the company, giving it an opportunity to sell.
NVDA Stock Price Technical Analysis
The daily chart shows that the NVDA stock price has held steady in the past few days, moving from a low of $170 on December 17 to the current $186. It has moved above the 50-day and 100-day moving averages.
At the same time, the stock has slowly formed a rising broadening wedge, commonly known as a megaphone. Therefore, the most likely Nvidia stock forecast is bullish, with an initial target at $200, followed by an all-time high of $212.
NVIDIA stock will likely jump to over $30o in 2026 as its growth momentum accelerates. This target is higher than the average analyst estimate of $253.
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