It’s no secret that the Nvidia (NASDAQ:NVDA) share price has continued its rampage these last 12 months. The aggressive rollout of artificial intelligence (AI) infrastructure investments has caused a surge in demand for the chip designer’s technology. And shareholders have been rewarded with staggering returns over the last five years that have continued with another 42% capital gain since October 2024.
So the question now becomes, can it do it again in 2026?
Latest analyst projections
Despite enjoying such an impressive run, it seems many institutional investors believe Nvidia shares still have more growth to deliver. Of the 66 analysts tracking this business, 59 currently rate the stock as a Buy or Outperform. And many have even been hiking their share price targets for the stock.
| Institutional Investor | Old Price Target | New Price Target |
| Baird | $195 | $225 |
| Evercore ISI | $190 | $214 |
| Keybank | $190 | $215 |
| Morgan Stanley | $200 | $206 |
| TD Cowen | $140 | $235 |
These are some of the more bullish projections. But overall, the average consensus puts the 12-month share price forecast for Nvidia at $211.50.
Compared to where the stock’s trading today, that represents a 14.3% potential capital gain. And while that’s not as explosive as the group’s recent performance, it’s still notably ahead of the US stock market’s average return of 10%.
But how realistic are these projections? What’s driving them? And should investors still consider adding this stock to their portfolio in 2025?
Bull versus bear
It’s easy to see why the experts remain optimistic about Nvidia’s outlook. AI capital expenditure from hyperscaler data centres continues to ramp up, with elevated budgets stretching into 2026. But beyond its core hardware offerings, the business is also making progress in monetising its software platform, providing some welcome recurring revenue from customers.
That’s great news for long-term free cash flow generation, protected by a moat of technological superiority that could help bridge the gap during semiconductor downcycles. Having said that, it’s a mistake to think Nvidia’s immune to disruption.
Competition from rival chip-designers like Advanced Micro Devices, as well as the rise of custom-built application-specific integrated circuits (ASICs), is already applying pressure to Nvidia’s pricing.
Even if rival technologies are less powerful, the reduced cost could make them a ‘good enough’ alternative if hyperscalers decide to slow down the current spending spree. And given the high level of customer concentration, even if just one hyperscaler starts taking this approach, the impact on Nvidia’s revenue could be significant.
The bottom line
All things considered, Nvidia continues to look like a phenomenal business with an exceptional product. And in the long run, as the need for processing power only continues to climb, I doubt the group will have trouble finding customers.
Having said that, the widespread coverage of this enterprise and its growth potential has already pushed the valuation to lofty levels. Expectations are running high. And when the cycle eventually decides to turn, that premium could quickly evaporate.
That’s why, despite the optimistic outlook, I’m not rushing to buy right now. Instead, I’m waiting for a better price to emerge and looking at other exciting hidden opportunities in the meantime.
