Key Takeaways
- Nvidia’s stock has outperformed the market in 2023, 2024, and 2025, and is expected to continue its growth in 2026
- The company has sold out its capacity for cloud graphics processing units (GPUs) and is expanding production to meet demand
- Nvidia is making changes to its product lines, including cutting production capacity for gaming chips, to free up resources for more profitable data center GPUs
- The company is returning to China and launching a new product, which is expected to boost growth in 2026
- Nvidia’s next-generation architecture, Rubin, is expected to drive further growth and strengthen the company’s position in the market
Introduction to Nvidia’s Success
Nvidia has been an incredible performer over the past three years, with its stock outperforming the market in 2023, 2024, and 2025. According to the article, "Nvidia (NVDA +1.26%) has been an absolutely incredible performer over the past three years." The company’s success can be attributed to its strong position in the market, particularly in the data center division, which generated $51.2 billion in sales in Q3. As CEO Jensen Huang noted, Nvidia was "sold out" of cloud graphics processing units (GPUs), which is "simply incredible, especially considering that Nvidia generated $57 billion in total revenue."
Meeting Demand and Expanding Production
To meet the unprecedented demand for its products, Nvidia is looking to expand production capacity in any way possible. The company is pushing its suppliers to provide more chips and other hardware, and is also making changes to its product lines to free up resources. For example, Nvidia is reportedly cutting production capacity for its gaming chips, which generated $4.3 billion in revenue during Q3. As the article notes, "One area where Nvidia is making some hard choices is that it’s reportedly cutting production capacity for its gaming chips." This move is expected to free up some chip capacity to build more profitable and in-demand data center GPUs.
Return to China and New Product Launch
In addition to expanding production, Nvidia is also returning to China and launching a new product, which is expected to boost growth in 2026. The company’s export license to ship H20 chips to China was revoked in April 2025, but it has now been allowed to sell the chips again, albeit with a 25% fee. As the article notes, "Nvidia is allowed to sell the chips again, but at a 25% fee. It’s unknown whether Nvidia will eat the fee or pass that on to the customer, but either way, Nvidia is gaining back a massive client that will boost its growth in 2026." The launch of Nvidia’s next-generation architecture, Rubin, is also expected to drive further growth and strengthen the company’s position in the market.
Future Growth and Projections
Nvidia’s vision for future data center construction is ambitious, with the company believing that global data center capital expenditures will rise to $3 trillion to $4 trillion by 2030, up from around $600 billion in 2025. As the article notes, "Nvidia believes that global data center capital expenditures will rise to $3 trillion to $4 trillion by 2030, up from around $600 billion in 2025. That’s simply amazing growth, and if the industry actually does reach those spending levels, Nvidia’s stock could skyrocket over the next few years as a result." With all of the massive upgrades coming down the pipeline for Nvidia, a return to China, and increasing production capacity, the company is doing everything it can to maximize sales and drive growth.
Conclusion and Outlook
In conclusion, Nvidia’s stock has outperformed the market in recent years, and the company is expected to continue its growth in 2026. With its strong position in the data center division, expanding production capacity, and return to China, Nvidia is well-positioned for success. As the article notes, "I think this next phase of artificial intelligence could be even bigger for Nvidia." The company’s next-generation architecture and vision for future data center construction are also expected to drive further growth and strengthen its position in the market. Overall, Nvidia’s future looks bright, and investors should take note of the company’s potential for continued growth and success.
https://www.fool.com/investing/2026/01/05/the-next-phase-of-the-ai-boom-could-be-even-bigger/