Nvidia (NASDAQ:NVDA) stock delivered more blockbuster returns for investors in 2025. Rising 37% in value over the year, it became the world’s first $4trn company in the process as demand for its high-power microchips rocketed.
As a result, a £5,000 investment in Nvidia shares on 1 January 2025 would now be worth £6,850. At $191.80 per share, the S&P 500 company’s risen a stunning 1,300% in value over five years.
While impressive, it’s naturally led to speculation that it’s now looking overbought and vulnerable to a price correction. So what can we expect from Nvidia’s share price in 2026? Could it be about to crash?
$275 price target
Nvidia’s one of the most covered companies by analysts across the globe. Today, almost 60 offer ratings on the world’s most valuable business. Helpfully for investors, this provides a wide range of opinions to consider.
The average 12-month price target among this grouping is $260.72 per share. That’s up 37% from today’s prices.
Bank of America analyst Vivek Arya thinks Nvidia stock could enjoy even greater price gains though. He told CNBC last month that the computing industry is moving “from the era of trains to the era of rockets, and we are still in the early stages of that“.
He added that AI-related expenditure is rising at 50%-60%, and predicted “the pace of spending will continue to be very strong“.
As for Nvidia, Arya noted that around 75%-80% of the AI accelerator market is “built around” the firm’s flexible GPUs, underlining the company’s dominance which has so excited investors.
The analyst expects Nvidia stock to hit $275 by this time next year. If this proves correct, a £5,000 investment today will turn into £7,230.
What might go wrong?
Yet, of course, broker forecasts are never guaranteed. And as I said at the top, Nvidia’s enormous price gains over recent years has sparked talk of a possible correction.
There are no signs of distress just yet. Indeed, the company’s Q3 results in October beat forecasts again. These showed net profit leaping 65% year on year. But that’s not to say things will remain sunny for the chipbuilder. Rising competition, supply chain problems, tariff-related problems and high customer concentration are just some threats that are higher today than they were a year ago.
Talk of an AI bubble is also greater than it was at the start of 2025. And this is potentially the biggest near-term danger to Nvidia shares. In scenes reminiscent of those before the dot-com crash, investors are starting to question whether share prices are way ahead of what future earnings justify.
Legendary hedge fund manager Ray Dalio wrote on X this week that the AI boom “is now in the early stages of a bubble“. It’s one opinion of many, but one that deserves serious attention, in my view.
The final word on Nvidia
For these reasons, I don’t plan to buy Nvidia stock for my own portfolio, though I believe more risk-tolerant investors might want to take a close look. The tech giant’s share price could well rocket again in 2026, but it’s far too risky for my liking at today’s prices.
