The market just set a new all-time high. Will Nvidia do the same?

Although there are many measures of what a “market” is, the most common reference is to S&P 500which is made up of the 500 largest US listed companies. This gives investors a fairly diversified representation across all market sectors, which is why it is usually used as a basis. The S&P 500 has hit new all-time highs for several days in a row, but that doesn’t mean every stock is also hitting new all-time highs.

Although Nvidia (NVDA -3.66%) was an excellent investment in 2024, it is not one of the stocks that hit a new all-time high recently, although it is not far from doing so. It’s about 10% off its all-time high, but that stock has rallied aggressively in recent days.

Will Nvidia hit a new all-time high in the coming days?

GPUs have never been in higher demand

Nvidia’s graphics processing units (GPUs) have long been at the top of their industry. However, only recently has that best-in-class accolade paid off. Because GPUs can process multiple calculations in parallel, they are ideal for heavy computing tasks. GPUs were originally intended for processing graphics for games, hence the name. They eventually found their way into other use cases, such as engineering simulations, cryptocurrency mining, and training artificial intelligence (AI) models.

The latter caused demand for Nvidia to explode as many of the biggest tech companies raced to build the most powerful AI training servers possible. That means stuffing them with thousands of Nvidia GPUs, which is what made Nvidia’s business soar.

As of 2023, this has seen Nvidia’s revenue skyrocket.

NVDA Revenue Data (Quarterly) by YCharts.

But the rally isn’t over, and it’s likely to push Nvidia stock higher to hit a new all-time high.

Nvidia’s impressive growth is set to continue

While the second quarter saw an impressive 122% year-over-year revenue increase to $30 billion, Nvidia isn’t done yet. Management expects revenue of $32.5 billion for the third quarter of fiscal 2025 (ended around October 31). This would indicate an 80% increase in revenue. Nvidia’s revenue growth is slowing as it begins to face quarters where revenue has been higher. But with revenues expected to grow at a quarterly pace of 8%, there is still strong demand.

Q3 isn’t the end for Nvidia either. For fiscal 2025, Wall Street analysts project an average of $125.5 billion in revenue. If Nvidia hits third-quarter expectations, that would indicate fourth-quarter revenue should be around $37 billion — another healthy increase from prior-quarter levels. That growth will extend into fiscal 2026, according to analysts. They believe Nvidia will produce $178 billion in revenue, which would represent a massive 42% growth.

If Nvidia hits that target and maintains its current 55% profit margin, it would produce $97.9 billion in net income. If all of those forecasts are met and the stock price doesn’t move, Nvidia stock would trade for 31 times trailing earnings at the end of fiscal 2026.

While 31 times earnings may seem expensive, it’s unlikely that Nvidia would trade that low given that the company is likely to be growing at a strong rate at that point.

So whether it’s a week, a month, or a year from now, Nvidia is likely headed for a new record. With strong future prospects, Nvidia looks like it could be a buy again, but with high expectations already built into the stock, don’t expect it to double anytime soon. Instead, Nvidia should be viewed as a stock that can consistently beat the market, outperforming it by a few percentage points each year.