A Santa Claus Rally Could Supercharge Nvidia Stock Into 2026. Should You Buy Shares Here?

Market Overview - The S&P 500 is nearing fresh highs, having achieved its 38th record close of 2025, with expectations for a Santa Claus rally to boost major indexes through year-end and into early 2026 [1] - Nvidia is anticipated to be a key catalyst for the broader tech sector's performance [1] Nvidia's Stock Performance - Nvidia has experienced a rise over the last four consecutive sessions, trading around 20% below its all-time highs [2] - Mark Newton from Fundstrat indicates that Nvidia's breakout above its October downtrend suggests a scheduled rebound, positioning the stock for potential outperformance in the coming weeks [3] Investment Case for Nvidia - Nvidia's market cap stands at $4.6 trillion, with a remarkable return of over 23,000% to shareholders in the past decade [4] - The company is demonstrating its AI infrastructure dominance through strategic moves beyond traditional data center sales, with a potential $500 billion backlog for Blackwell and Vera Rubin chips as outlined by CFO Colette Kress [4] Industry Insights - Kress addressed concerns regarding an AI bubble, stating that the industry is undergoing multiple major transitions, with data center infrastructure spending projected to exceed $3 trillion by 2030 [5] - The transition from CPU-based to GPU-accelerated computing is expected to account for 50% of this expenditure [5] Competitive Landscape - Nvidia's competitive position remains strong despite rising competition from companies like AMD, with nearly all current shipments representing net-new installations rather than replacements [6] - Legacy Ampere-generation chips are still commanding premium rental prices from cloud providers, indicating robust demand across product generations [6]