Nvidia's stock performance in 2026 has been underwhelming despite strong business results. The company's stock has risen about 15.5%, roughly in line with the S&P 500's 13% gain. However, investors accustomed to Nvidia's past outperformance are waiting for a potential rally in November, driven by its Q3 earnings report, expected around November 18.
Nvidia's revenue surged 106% year over year to $96.2 billion in the second quarter, a remarkable feat given its size. Analysts anticipate continued strength, with revenue projected to rise 91% in Q3 and 83% in Q4. The company has also forecasted 70% revenue growth for 2027, a bold projection made six months before its Q4 earnings report. Despite these positive indicators, Nvidia's stock trades at a relatively cheap 27 times earnings, suggesting future growth is not yet priced in.
If Nvidia meets Wall Street's estimates over the next year and a half, its earnings could double. Maintaining its current valuation would imply the stock could double from its present level. The AI sector's continued expansion through 2030 further supports Nvidia's long-term growth prospects, making it an attractive investment despite the current market's bearish sentiment on AI.
Before investing, consider that The Motley Fool's Stock Advisor team did not include Nvidia in their top 10 stock picks for 2026. The team's past recommendations, such as Netflix and Nvidia itself, have yielded substantial returns, underscoring the importance of thorough research before making investment decisions.