Can Nvidia Stock Hit $200 in the Next Year? – The Motley Fool

nvidia (NVDA) -3.01%)) The stock has performed disappointingly so far in 2025, falling 26% since reaching a 52-week high in the first week of the year, suggesting that broader market sentiment may not be in the woods yet.

The semiconductor giant is fighting multiple challenges ranging from a potential slowdown in artificial intelligence (AI) infrastructure spending to rising competition in the AI ​​chip market, from a potential rise in manufacturing costs thanks to an ongoing tariff war. Nvidia was hit another hit last week after the investment bank City It reduced its stock price target from $163 to $150, citing a slight slowdown in data center spending in the US.

However, it is worth noting that Nvidia’s median price target for 12 months is $175, pointing to a 58% jump from the current level, according to 67 analysts covering the stock. But can Nvidia surpass analysts’ expectations and reach $200 despite a challenging economic scenario? Let’s look into it.

It’s unlikely that data center spending will be slower

One reason Citi has reduced NVIDIA price targets is the potential slowdown in data center construction. Investment banks expect data centre spending to rise by 35% this year. Amazon, Meta Platform, alphabetand Microsoft (msft -1.13%)) -Compared to previous estimates of 40%. There will be a further slowdown in 2026, with spending expected to rise by 15%.

The lower estimates could be attributed to the projected slowdown in economic growth due to tariff-related uncertainty. For example, Microsoft has already said that construction of some Ohio data centers is “slowing down or pausing” in the early stages. The high-tech giant is reportedly reducing some of its data centre construction internationally.

However, Microsoft’s move to slow data center expansion can be attributed to changes in placement with Openai. Previously, Microsoft was the only provider of OpenAI data center capacity. However, Openai can now build its own data center infrastructure. The company is part of the Stargate project and is reportedly building an AI data center with a $100 billion investment.

According to a Bloomberg report, the first Stargate data center is expected to be completed by mid-next year and is reportedly equipped with NVIDIA’s 400,000 AI GPU (graphics processing unit) system. Openai and its partners are expected to build around 10 AI data centers as part of the Stargate project. In that case, demand for Nvidia chips should remain robust and drive significant growth for the company.

This is because each Nvidia Blackwell B100 GPU reportedly costs between $30,000 and $35,000. Meanwhile, Nvidia’s Blackwell GPU and Grace CPU (Central Processing Unit) combination can be priced between $60,000 and $70,000. Additionally, a flagship server system consisting of multiple NVIDIA GPUs and CPUs can command a price of $3 million, while a midrange system costs $1.8 million.

So, large investments under Stargate, which could potentially reach up to $500 billion over the next four years, can ensure that Nvidia’s data center business continues to grow at a healthy pace. Another thing worth noting is that the cloud computing giant is unlikely to cut spending on AI infrastructure. For example, Alphabet has repeatedly stuck to this year’s $75 billion capital expenditure forecast.

Amazon also has a $100 billion capital expenditure plan for this fiscal year, with the majority expected to be in AI data centers. Even Openai has recently raised $40 billion in funding to bolster its AI infrastructure. The fact that the Trump administration exempts smartphones, computers and chips from other electronic devices from mutual tariffs imposed on China should help cloud computing companies stick to capital expenditure plans and give NVIDIA a boost.

Overall, it appears that Nvidia is set to sell more data center GPUs in the future. But will that help stocks regain Mojo?

Does $200 look like a possibility of Nvidia stock?

Nvidia is expected to maintain a solid pace of revenue growth this fiscal year (which closes in January next year). Analysts forecast a 51% jump in revenue for fiscal year 2026 at $4.53 per share. Nvidia is currently trading at 25x advance revenue.

However, don’t be surprised that Nvidia’s revenue growth is forecast to improve margins later in the fiscal year, so we’re not surprised that it will surpass market expectations for next year. However, even assuming NVIDIA can provide $4.53 per share this year’s earnings year, it would be a big improvement over last year, with the market potentially reaching $181, at multiples of 40 (in line with average trading revenue over the past five years).

It’s below the $200 mark but represents a 63% upside from the current level. However, if Nvidia can record stronger revenue growth as margins grow, it can hit the $200 mark. So investors looking to buy top tech stocks that trade at attractive valuations and can offer healthy profits should consider buying nvidia before stepping on gas again.