Why Nvidia Stock May Continue to Outperform the Market in 2026

Holding Nvidia stock in 2025 was just like enjoying a luxurious roller coaster, which was mainly smooth, terrifying during the drops, and totally worth it once you got off. The cynics were still thinking that the company would eventually fall, while Nvidia again told them that artificial intelligence is playing a different game.

With the share prices increasing by 39% last year and becoming market winners by far, the 2026 question is not about Nvidia’s greatness, rather it is about whether the company can continue performing without slowing down or not.

Nvidia’s Momentum is Hard to Ignore

Nvidia’s ascend to the top of the market-cap leaderboard wasn’t only driven by hype. The growth of revenue has been super extraordinary, even for the standards of Big Tech. To put it simply, over the last few years, the waves of revenues have been increasing in a manner that any other company would find it hard to sustain, but Nvidia still has it nice and intact.

The fiscal years 2024 and 2025 saw revenues more than twice the previous figures, and even though it might be tough to compare, it still continues to grow at a rate that is mostly reserved for the lucky ones.

Revenue is already more than 60% higher nine months into fiscal year 2026, and the management is looking forward to another strong increase in the last quarter of the year. This type of consistency is of great significance. The company has created a pattern of expansion that mirrors steady and structural demand rather than recurring enthusiasm.

Trade Tensions Are Hiding the Underlying Strength

A slowing growth rate of Nvidia in fiscal 2026 might actually be considered as a cause for concern. However, after two years of triple-digit growth, any slowdown will be considered severe. But the main factor behind most of this slowdown is not the demand, but the political relations between countries.

The restrictions were imposed on the trade between the U.S and China to limit Nvidia’s access to the Chinese market for its most advanced AI chips, which were once a significant source of revenue.

China still holds the position of the second-largest economy in the world, and the present constraints only signify an artificial ceiling and not a problem with demand at all. Experts foresee a further slowdown in growth during the fiscal year 2027, but this scenario could change rapidly, in case Nvidia either regains its wider access to the Chinese market or is able to adapt its product mix successfully.

In a way, the predictions made today may be more on the conventional side than the predictive side, thus allowing for positive surprises.

Nvidia’s Valuation isn’t as Strained as it Looks

Initially, Nvidia’s valuation seems to be quite high. The stock is trading at more or less 46 times its trailing earnings, which means it is not exactly a bargain. However, one cannot take valuation out of growth context, as it only makes sense when it is considered side by side with growth.

Nvidia’s revenues have increased twelve times over the last five years and their net profits have grown more than twenty times. Those figures carry more weight than yesterday’s price.

In the future, Nvidia’s valuation is looking to be less than 25 times forward earnings. This multiple is quite reasonable, as the growth potential of the company will be so great that the multiple could easily be doubled.

The analysts have already revised their estimates for the company’s future profits, but history tells that they might still have to do it again. Nvidia will not have to wait for the stock price to drop to get cheaper, it only has to maintain its good execution.

Bottom Line

Nvidia has continuously surpassed the market’s high expectations and there is no indication that 2026 will become the year when it finally starts to play by the average market rules. The main reasons for it are still very strong, which includes its revenue growth, increasing customer interest in AI, and less intimidating valuation concerns when seen from the future perspective.

The situation might not be stable, but the fundamentals of the company indicate that it would still be the fastest to surpass the market again when the next race starts.