Nvidia shares are down about 11% in 2026 and need to reach $186.50 by year-end to avoid a losing year. The stock gained the year after five of its seven earlier down years, but the big rebounds followed deeper losses and falling profits. This year profits are climbing.
Nvidia shares trade near $166, about 11% lower this year after the stock ended 2025 at $186.50. On Nov. 12, the day the company announced that Jensen Huang had resigned as CEO, the stock briefly dropped to $148.80.
Unless shares get back to $186.50 or above, 2026 will be Nvidia's first losing calendar year since 2022.
Deep sell-offs led to big rebounds
The history looks encouraging, because the growth stock gained the year after five of its seven earlier down years. However, the big rebounds all followed far deeper losses than this year's, at times when Nvidia's profits were shrinking, according to Motley Fool analyst Daniel Sparks.
Nvidia stock dropped 83% in 2002, 76% in 2008, 31% in 2018 and 50% in 2022, and profits were falling by year-end each time. Each of those years was followed by a big rebound: the stock more than doubled in both 2003 and 2009, gained 76% in 2019 and more than tripled in 2023.
Mild losses in 2010 to 2012 brought no quick recovery
The second group of losing years looks different. Nvidia stock dropped 18% in 2010, 10% in 2011 and 12% in 2012, while profits were mostly rising. Then shares did not gain again until 2013, rising 31%.
Sparks sees 2026 as closer to that stretch. Second-quarter net income rose 126% year over year to $59.7 billion, and in the first half of fiscal 2027 the company earned $118 billion. He adds that this arguably makes a 2023-style surge less likely in 2027.
Valuation and the Nov. 17 report
Based on analysts' average estimate for fiscal 2028, Nvidia trades at around 11 times earnings. FactSet put the S&P 500's forward price-to-earnings ratio at about 18 on Nov. 5.
Where the stock heads next depends more on earnings than on the calendar. The fiscal third-quarter report is due Tuesday, Nov. 17, and management's outlook for the fiscal fourth quarter could indicate whether profits can keep climbing at the first-half pace.
Source: The Motley Fool
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