Nvidia Is Up Just 20% This Year. Here Is What History Says Happens Next.

Nvidia (NASDAQ: NVDA) may have been one of the greatest stock investments in the history of the market, but that doesn't mean its winning streak can go on forever. It often happens that by the time a stock gets the wider market's notice for a great run-up, its most thrilling gains are already behind it. But that doesn't mean that widely known and popular stocks can't still create shareholder value.

So what's happening with Nvidia? It has been following the general trajectory of the S&P 500 for most of the year, and as of this writing, it's up 20% versus 14% for the broader index. That's a fair beat, but it's not on par with the massive gains it's delivered in the past. Let's see what might be on the table for the chip stock in the coming weeks and months.

The gold standard for AI chips

Nvidia became a household name after the artificial intelligence (AI) megatrend exploded, but it was a successful business and an excellent investment well before that. In 2021, when AI was still a futuristic concept to most non-techies, Nvidia was a leader in video game hardware, and its stock more than doubled.

ChatGPT was released toward the end of 2022, and Nvidia's graphics processing units (GPUs), originally designed to improve the rendering of video game graphics, quickly became the gold standard for providing the parallel processing power required by generative AI. Since then, Nvidia stock has skyrocketed. Moreover, there's a fairly clear pattern for how Nvidia stock performs through the end of July and what happens through the remainder of the year.

Period	Share Price Change 2025	Share Price Change 2024	Share Price Change 2023	Share Price Change 2022	Share Price Change 2021
Through July	32%	136%	220%	(38%)	49%
Full year	39%	171%	239%	(50%)	125%

Data source: YCharts.

If 2026 follows the general pattern of the past five years, it's likely to end the year higher than it's trading right now, but not by that much. That's been the pattern for the past four years -- with most of the stock's price action occurring in the first seven months. 2021 was an exception -- most of Nvidia's gains came closer to the end of that year.

The epicenter of AI

Over the past four years, AI has changed tremendously, with a vast array of large language models and agentic AI services, but Nvidia is still the linchpin. It provides chips and whole infrastructure ecosystems for hyperscaler clients, and it's deeply embedded into their systems -- a condition that creates high barriers to entry for would-be competitors. For its fiscal 2027 second quarter, which ended July 26, management is guiding for 95% revenue growth year over year.

However, the stock's gains have been slowing down, even as the business speeds up. Nvidia is already the most valuable company in the world by market cap, and Wall Street is being very deliberate about its stock. Even if it beats expectations for fiscal Q2, which is likely, the market's reaction could be muted.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.