NVIDIA (NVDA) Remains the King of AI Datacenters, With Solid Upside for 2026

Stock (Symbol)

NVIDIA (NVDA)

Stock Price

$180

Sector

Data is as of

Expected to Report

Company Description

The Company is engaged in accelerated computing to help solve the challenging computational problems.

The Company’s segments include Compute & Networking and Graphics.

The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services.

The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications. Source: Refinitiv

Sharek’s Take

NVIDIA (NVDA) continues to be the brains of AI infrastructure. Last qtr, NVIDIA’s profits surged 60% on the back of 62% revenue growth, with its new Blackwell GPU leading the charge. Blackwell was launched in late 2024 and delivers 50x the performance of the previous Hopper platforms. The next big thing in AI will be the NVL 72 supercycle. The NVIDIA GB200 NVL 72 is a rack system (the size of a pizza pan rack) with slots for components. Inside are 36 NVIDIA Grace CPUs and 72 NVIDIA Blackwell GPUs, which are connected by NVIDIA’s NVLink, a spine (the size of a 4×6 beam of wood) with two miles of cables (5000 total). A Central Processing Unit (CPU) is the brain of a computer, running the operating system by fetching and executing instructions. A General Processing Unit (GPU) is used for digital image processing. NVLink moves 130 terabytes of data per second, more than the Internet moves at its peak (113 terabytes per second). These new racks are liquid-cooled, which reduces energy consumption. The liquid-cooled NVL 72 delivers 25x more performance than the previous H100 air-cooled version. These GPUs run on NVIDIA’s industry leading CUDA software platform, creating a moat, keeping competition at bay.

NVDA has four operating segments : Gaming, Data Center, Professional Visualization and Auto. Here are segment stats from last qtr:

1. Data center: 90% of total company revenue, +66% growth y.o.y.
   • This segment is comprised of data center platforms, large Enterprise IT systems, and cloud computing networks.
   • Growth was driven by massive demand for Blackwell GPUs and strong expansion across AI compute and networking.
2. Gaming: 7% of total revenue, +30% growth y.o.y.
   • NVDA gaming platforms have historically given video gamers sharper, smoother, higher-quality graphics with its GeForce line.
   • Growth was driven by strong demand for Blackwell-powered GeForce GPUs and healthy gaming engagement.
3. Professional Visualization: 1% of total revenue, +56% growth y.o.y.
   • This segment is digital content creation, including professional video editing, special effects for films, architectural design, and product manufacturing.
   • Growth was driven by increased adoption of DGX Spark AI systems for engineering and development workloads.
4. Auto: 1% of total revenue, +32% growth y.o.y.
   • NVIDIA Drive is a complete solution for the Autonomous Vehicle market, including infotainment systems and autonomous driving.
   • Growth was driven by rising adoption of NVIDIA’s autonomous driving platforms, especially through its partnership with Uber.

NVIDIA is in a golden era of a universal upgrade in computing. The CEO breaks down the four previous eras as (1) PC lead by IBM, (2) Internet, (3) Mobile & Cloud lead by the iPhone, and (4) AI. Analysts give NVDA an Estimated Long Term Growth Rate (Est. LTG) of 40% a year. I consider NVDA a rapid grower, which in my opinion is a company growing year-over-year profits 65% or greater. Management even buys back stock and pays a small dividend. Revenue was $27 billion in 2023, $61 billion in 2024, ~$130 billion in 2025, and is estimated to be $213 billion in 2026. NVIDIA is the top holding in my Growth Portfolio and Aggressive Growth Portfolio. NVIDIA customers include the best tech companies in the world, including hyperscalers Amazon, Google, Meta, and Microsoft. At Meta, AI recommendations are delivering more relevant constant, leading to more time spent on Facebook & Instagram. Hyperscalers are deploying nearly 1000 NVL racks per week with plans to ramp up output in 2026 Q2 (source: Digitimes Asia).

One Year Chart

NVIDIA stock made a run higher during the Spring & Summer, and is now basing.

This stock has a P/E of 24 when we look at 2026 profit estimates. My Fair Value is a 42 PE. I think the stock is very undervalued. The P/E was 37 last quarter.

The Est. LTG is 40%, up from 34% 2QtrsAgo. The Est. LTG is analysts’ 3-5 year guess of annual profit growth (not stock growth).

Quarterly profit growth has been rapid the past 4 qtrs. And Estimates are for rapid growth to continue.

Earnings Table

Last qtr, NVIDIA reported 60% profit growth and beat estimates of 53%. Revenue grew 62% and beat analyst’s estimates of 56%.

• In Data Center, Compute revenue grew 56% year-over-year, driven by the GB300 RAM, while networking revenue grew 162% year-over-year, given onset of NVLink’s scale-up and robust double-digit growth across Spectrum-X Ethernet, and Quantum-X InfiniBand.
• In Gaming, Steam recently broke its concurrent user record, with 42 million gamers.
• In Automotive, NVDA is partnering with Uber to scale the world’s largest Level 4-ready autonomous fleet, built on the new NVIDIA Hyperion L4 robotaxi reference architecture.
• The world’s most important enterprise software platforms like ServiceNow, CrowdStrike, and SAP are integrating NVIDIA’s accelerated computing and AI stack.
• NVDA announced AI factory and infrastructure projects amounting to an aggregate of 5 million GPUs.
• Last qtr, the Hopper Platform recorded approximately $2 billion in revenue while H20 sales were approximately 50 million.

Annual Profit Estimates increased this qtr. 2026 numbers took a big jump.

Qtrly Profit Estimates for the next 4 qtrs are 71%, 73%, 72%, and 56%. That’s impressive. For next qtr, analysts predict revenue will climb 67% year-over-year.

Fair Value

NVDA has a P/E of 38 when we look at  2025 profit estimates. I think that’s cheap.

My Fair Value is a P/E of 42, and when we plug in 2026 profit estimates, we get a Fair Value of $320 a share, 78% higher than the recent quote of $180.

There’s ample upside for 2027 — 124% — as my guess is the stock could be $400 by then.

Bottom Line

NVIDIA (NVDA) stock has had a rocky decade.

Meanwhile, the 2022 slump was due to a downturn in sales in the Gaming division as (1) businesses were flush with cash in 2021 and had already upgraded computers and (2) Bitcoin miners found it unprofitable to mine with lower crypto prices combined with high electricity costs.

In January 2023 the stock pushed past $20 and ended that year at $50 as Datacenter sales pushed higher due to AI investments. 2024 was also great as the shares went from $50 to 134.

NVIDIA is still the top stock in my universe. It’s at the center of AI buildouts. Rubin should become another catalyst for the company in 2026 Q3.

NVDA ranks first in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings.

Power Rankings

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Aggressive Growth Portfolio

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Conservative Stock Portfolio

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