NVIDIA Corporation (NASDAQ:NVDA) is one of the Magnificent Seven stocks Jim Cramer recently reviewed. Cramer believes that the stock will again be a huge outperformer in 2026, as he commented:
“Let’s take them one by one because this feels like 2026 will be another year where individual stock picking is really going to start mattering. Remember, this is my big theme. Alphabet and NVIDIA, I think, are going to be two huge outperformers just like 2025… Nobody comes close
to NVIDIA in the number one spot at $4.55 trillion… The second-best performer of the Magnificent Seven last year and the only other member to outperform the S&P 500 was NVIDIA, which rallied 39% even as the stock mostly traded sideways for the final few months of the year. This was a big step down from NVIDIA’s 200% plus gain in 2023 and the over 100% gain it posted in 2024.
Despite being the largest company in the world, NVIDIA somehow still feels underappreciated to me. All four of the company’s earnings reports last year were excellent even if the magnitude of NVIDIA’s earnings beats have shrunk versus the last couple years, simply because Wall Street’s no longer underestimating this company like it used to. That’s where a lot of big performance boost came from. At the same time, NVIDIA remains firmly at the center of the AI ecosystem with the best chips that money can buy and a software moat that makes it very hard for other semiconductor players… to compete.
Today, NVIDIA stock struggled again. It finished down 88 cents after CEO Jensen Huang gave what I thought was a spectacular keynote address at last night’s CES… where he said that demand remains extraordinarily high and his next generation Vera Rubin chips are ahead of schedule… These things have entered full production with shipments scheduled to start in the second half of the year. Jensen also devoted lots of time last night to discussing physical AI, think robots, think self-driving cars, which is a market that’s rapidly growing. So yes, I still like NVIDIA very much entering 2026. Own it, don’t trade it, and that is the way we handle it, for, of course, for the Charitable Trust. Plus, as the calendar flips to the new year, the stock doesn’t look particularly expensive at all.
NVIDIA currently trades at less than 25 times this year’s earnings estimates. Wall Street anticipates nearly 40% earnings growth. That’s a cheap stock. From the perspective of a growth-oriented hedge fund manager, it’s insanely cheap. And if the past few years are any guide, NVIDIA will once again beat the estimates, maybe trouncing them, meaning the stock will look a lot cheaper in retrospect 12 months from now as is often the case with NVIDIA in the last decade. It’s confusing that the stock couldn’t rally on Jensen’s excellent keynote speech at CES yesterday. But like I said about Amazon last year, some stocks just don’t react the way they should, and you need to have enough confidence in your own work to say that the market is wrong.”
Photo by Javier Esteban on Unsplash
NVIDIA Corporation (NASDAQ:NVDA) develops accelerated computing and AI platforms, GPUs for gaming and professional use, cloud services, robotics and embedded systems, and automotive technologies.
While we acknowledge the risk and potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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