While Rolls-Royce has dominated the UK market in recent years, Nvidia’s (NASDAQ:NVDA) been stealing the show across the pond.
The semiconductor chip designer has found itself at the heart of the artificial intelligence (AI) infrastructure spending boom, supplying the critical hardware that tech giants need to train their AI models and systems. Consequently, the group’s profits have skyrocketed.
In its latest quarter alone, the company delivered yet another record revenue of $57bn, up 62% compared to a year ago. And at a staggering 63.2% margin, operating profits came in at $36bn – a 27% jump, highlighting the firm’s ongoing and immense pricing power.
Given that this winning streak has only accelerated since 2023, it’s no surprise the stock’s up more than 1,200% over the last three years – enough to turn £10,000 into roughly £130,000! But will Nvidia shares climb even higher in the next 12 months?
Here’s what the experts are saying
While scepticism about the effectiveness of AI’s on the rise, infrastructure spending plans remain substantial for 2026. The latest estimates show that AI-related capital expenditures among hyperscaler data centres could reach as high as $527bn. For reference, this figure stood at $394bn in 2025.
For Nvidia, that signals the gravy train’s set to continue. And with its new Blackwell and Vera Rubin chips being launched this year, along with a 95% global GPU market share, the business seems perfectly positioned to capitalise on this ongoing wave of investment from customers.
This promising outlook is why the analyst team at Tigress Financial has issued a share price target of $350 for the next 12 months. Compared to where Nvidia shares trade today, that’s yet another 83.7% projected gain on the horizon!
So should investors start rushing to buy?
What could go wrong?
With a price-to-sales ratio of 25, Nvidia shares appear to be priced for almost perfection next year. To management’s credit, that’s exactly what the business has been delivering over the last few years. However, there’s no guarantee this pattern will continue, especially since many of its customers seem eager to get off its platform.
While powerful, Nvidia chips are exceptionally expensive. And consequently, every hyperscaler is currently investing aggressively into creating their own proprietary AI-accelerator chips to avoid ‘the Nvidia tax’.
Whether these custom solutions will be ready in 2026 remains unknown. But even if one hyperscaler starts winding down spending on Nvidia products, at the stock’s current valuation, this could open the floodgates for volatility as investors get spooked about long-term implications.
The bottom line
The bull case surrounding Nvidia shares remains compelling even after such a massive price rally. However, the margin for error appears to be close to zero, with investors and analysts seemingly baking in perfect execution.
Nvidia’s proven quite capable at delivering on such expectations so far. Yet if supply chain disruptions trigger a delay in the new Vera Rubin chips, or custom AI hardware starts gaining market share, the group’s winning streak could come to an abrupt end.
With that in mind, while I admire the business, this isn’t a stock I’m rushing to buy. Instead, I’m looking elsewhere within the US tech sector for other Nvidia-like hidden opportunities.
