Wall Street's seasonal momentum may be building as the S&P 500 ($SPX) hovers near fresh highs following its 38th record close of 2025. Market experts expect a Santa Claus rally to drive major indexes through year-end and into early 2026. Notably, Nvidia (NVDA) may emerge as a key catalyst for the broader tech sector’s performance.
The AI chipmaker has risen in the last four consecutive sessions after trading around 20% below all-time highs. In the past two months, investors have raised concerns over the sustainability of AI spending and the circular economy.
According to a MarketWatch report, Mark Newton, head of technical strategy at Fundstrat, believes Nvidia's recent breakout above its October downtrend signals a rebound right on schedule, with the stock positioned to outperform over the coming weeks.
The traditional Santa Claus rally begins on Christmas Eve and extends through Jan. 5. So, let’s see if you should buy NVDA stock right now.
The Bull Case of Investing in Nvidia Stock
Valued at a market cap of $4.6 trillion, NVDA stock has returned over 23,000% to shareholders in the past decade. In 2025, it continues to demonstrate the breadth of its AI infrastructure dominance through recent strategic moves that extend far beyond traditional data center sales. Earlier this month, Nvidia CFO Colette Kress laid out an ambitious vision and revealed a potential $500 billion backlog for Blackwell and Vera Rubin chips.
Kress also addressed concerns about an AI bubble and explained that the industry is experiencing multiple major transitions simultaneously. According to Kress, data center infrastructure spending could surge past $3 trillion by 2030. Moreover, the shift from CPU-based to GPU-accelerated computing could account for 50% of this expenditure.
Nvidia’s AI moat remains strong despite rising competition from peers such as AMD (AMD). Almost all of Nvidia's current shipments represent net-new installations rather than replacements for existing GPU infrastructure. Further, legacy Ampere-generation chips continue to command premium rental prices from cloud providers, which indicates robust demand across product generations.
Kress dismissed concerns about exposure to unprofitable AI model builders. For instance, hyperscalers account for 50% of quarterly revenue and are the primary buyers that support these startups.
The recent OpenAI framework agreement for 10 gigawatts of computing capacity would be entirely separate from current backlog figures and represents direct sales rather than cloud provider intermediation.
Nvidia Partners With Synopsys
Nvidia's collaboration with Synopsys (SNPS) marks a significant expansion into industrial AI and engineering design workflows. CEO Jensen Huang revealed a $2 billion investment in Synopsys to accelerate integration of Nvidia's GPU computing, physical AI capabilities, and Omniverse digital twin platform into engineering design tools. This partnership targets the massive engineering and R&D budgets across virtually every industry that designs physical products.
The collaboration aims to replicate the transformation already seen in scientific computing, where GPU-accelerated systems grew from 10% of supercomputing infrastructure in 2016 to 90% today. Performance improvements range from 10x to over 1,000x for core engineering workloads, including computational lithography, circuit simulation, and fluid dynamics. Products currently taking weeks to simulate could be completed in hours.
Huang emphasized that this represents an expansion into a computing market worth hundreds of billions of dollars annually that has relied exclusively on CPU-based systems for the past four decades. The partnership enables Synopsys to address not just the semiconductor industry but the entire global R&D budget across all manufacturing sectors.
With Vera Rubin chips already taped out for the second-half 2026 launch and gross margins holding steady in the mid-70% range, Nvidia continues to execute on multiple fronts simultaneously while maintaining financial discipline.
What Is the NVDA Stock Price Target?
Despite its massive size, Nvidia continues to grow at a remarkable pace. Analysts tracking the AI heavyweight forecast revenue to increase from $130.5 billion in fiscal 2025 (ended in January) to $481 billion in fiscal 2030. In this period, adjusted earnings are forecast to expand from $2.99 per share to $12.21 per share.
NVDA stock trades at 27x forward earnings, which is below its 10-year average of 37x. Out of the 48 analysts covering NVDA stock, 44 recommend “Strong Buy,” two recommend “Moderate Buy,” one recommends “Hold,” and one recommends “Strong Sell.”
The average NVDA stock price target is $256, above the current price of $187.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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