Image source: Getty Images <\/p>\n
For three years now, artificial intelligence (AI) stocks like Nvidia (NASDAQ: NVDA) have been on the up. With AI technology going mainstream thanks to apps like ChatGPT and Gemini, the theme has dominated the market.<\/p>\n
Can these stocks perform again in 2026? I think so. Below, I\u2019ll explain why. I\u2019ll also provide my target share price for Nvidia.<\/p>\n
Many investors today think AI\u2019s overhyped. I don\u2019t share their scepticism though. I believe we are in the early stages of a multi-year AI-powered tech revolution. In my view, AI\u2019s going to disrupt every industry in the years ahead.<\/p>\n
In 2026, I think we\u2019re likely to see a lot of exciting developments on the AI front (that separate hype from reality) including:<\/p>\n
AI agents: I expect more companies to start using agentic AI solutions from the likes of Salesforce and ServiceNow (one recent survey found that 69% of global business leaders expect agentic AI to transform their operations in the year ahead). Early adopters could start to demonstrate productivity gains and material cost savings.<\/p>\n
New AI chips: Nvidia will be launching its next chip, Vera Rubin, in 2026. This is set to deliver a massive jump in performance.<\/p>\n
Put all this together and the outlook for AI stocks is favourable, in my view. I\u2019ll point out that I don\u2019t expect every stock in this area of the market to do well \u2013 there will be some laggards. I also expect to see some volatility at times. Yet taking a 12-month view, I\u2019m optimistic about the overall prospects for this area of technology.<\/p>\n
As for my price target for Nvidia in 2026, it\u2019s $250. I realise that\u2019s a decent jump (about +30%) from the current share price but here\u2019s my logic.<\/p>\n
Demand for Nvidia\u2019s chips is going to remain very high, in my view. Recently, the company has said it has about $500bn in revenue visibility from its Blackwell and Vera Rubin chips from the start of 2025 through the end of calendar year 2026.<\/p>\n
Now, at present, analysts expect the company to generate earnings per share of $7.69 for FY2027 (the financial year starting 1 February 2026). Let\u2019s assume this forecast\u2019s going to be accurate.<\/p>\n
And then let\u2019s assume that earnings growth the following year is going to be 20%. That gives us an earnings forecast of $9.23 per share for FY2028.<\/p>\n
Apply a forward-looking earnings multiple to that and we get:<\/p>\n
$231 at a multiple of 25<\/p>\n
$249 at a multiple of 27<\/p>\n
$277 at a multiple of 30<\/p>\n
I\u2019ll go with the middle multiple as I think that\u2019s very fair. It\u2019s worth noting that this price target\u2019s very close to the average analyst price target right now ($253).<\/p>\n
Of course, I\u2019m making a lot of assumptions here. And there are plenty of factors that could derail my bullish investment thesis, including a slowdown in AI spending and increased competition in the chip space.<\/p>\n
I continue to believe that Nvidia has significant growth potential though. In my view, investors should consider buying on pullbacks.<\/p>\n
The post Prediction: AI stocks will rise again in 2026 and Nvidia\u2019s share price will soar to this level<\/a> appeared first on The Motley Fool UK<\/a>.<\/p>\n More reading<\/p>\n Edward Sheldon has positions in Nvidia and Salesforce. The Motley Fool UK has recommended Nvidia, Salesforce, and ServiceNow. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.<\/a><\/p>\n Motley Fool UK 2026<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images For three years now, artificial intelligence (AI) stocks like Nvidia (NASDAQ: NVDA) have been…\n","protected":false},"author":2,"featured_media":216621,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[345,343,344,85,46,4136,25582,13132,5268,125,13134],"class_list":{"0":"post-216620","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-il","12":"tag-israel","13":"tag-nvidia","14":"tag-price-target","15":"tag-share-price","16":"tag-stocks","17":"tag-technology","18":"tag-vera-rubin"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/216620","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=216620"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/216620\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/216621"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=216620"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=216620"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=216620"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}