NVIDIA (NASDAQ: NVDA) ChatGPT has been a cornerstone of the artificial intelligence (AI) industry since its release more than three years ago. Shares of the semiconductor company have risen 1,160% since January 2023, and Wall Street still considers the stock to be significantly undervalued.
Among the 69 analysts covering the company, the median price target is $265 per share, which implies 47% upside from the company’s current share price of $180. But Wall Street has been underestimating how much hyperscalers will spend on AI infrastructure, so I think Nvidia will go higher in the remaining months of 2026.
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Here’s what investors should know.
Nvidia is the market leader in graphics processing units (GPUs) for data centers and high-speed networking equipment, both of which are critical for artificial intelligence (AI). The company has been so successful not only because it builds great hardware, but also because it has developed an extensive software ecosystem that simplifies the development of GPU-accelerated applications.
Specifically, Nvidia develops rack-scale computing platforms that combine CPUs, GPUs, and networking equipment. This full-stack strategy enables companies to optimize performance and energy efficiency at the system level rather than the component level. Importantly, Nvidia is the only company offering an AI networking solution that combines multiple chips, racks, and even independent AI data centers into a single computing platform.
Additionally, Nvidia has spent two decades building its CUDA platform, which consists of hundreds of code libraries, application frameworks, and pre-trained models. These tools address a wide range of software development use cases, from recommender systems and content generation to self-driving vehicles and robots.
Here’s the big picture: Nvidia systems typically set performance records when evaluated on AI training and inference tasks, but the company is really strong because it combines superior hardware with a rich software ecosystem that accelerates developer workflows. So while Nvidia systems are very expensive, the total cost of ownership is low, giving the company a lasting competitive advantage.
Nvidia reported strong financial results for the fourth quarter of fiscal 2026 that ended in January. Revenue rose 73% to $68 billion, the second consecutive acceleration, and the company expects growth to accelerate again in the first quarter. Meanwhile, gross margin increased 2 percentage points and non-GAAP (generally accepted accounting principles) earnings increased 82% to $1.62 per diluted share.
