Is Nvidia Stock a Buy After Its Red-Hot 6-Day Win Streak?

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Nvidia (NVDA) — the poster child of Wall Street's artificial intelligence (AI) mania — is revered as the chip king powering the generative AI explosion, and its role has become bigger than ever. Last week, NVDA stock reminded everyone why.
Nvidia blazed through a red-hot six-day win streak, rallying more than 10% and notching fresh all-time highs. It reclaimed its throne as the world's most valuable company, edging past Microsoft (MSFT). Investors shrugged off China jitters, bolstered by CEO Jensen Huang's AI and robotics vision and optimism at the annual shareholder meeting.
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Loop Capital analyst Ananda Baruah helped reignite the rally, lifting the price target to a Street-high $250 and hailing Nvidia as the epicenter of a wave in AI spending. Meanwhile, Nvidia's new Blackwell chips and AI-fueled demand paint a bold path to a $6 trillion valuation. Sure, insiders have offloaded more than $1 billion in stock over the past one year, but investor confidence hasn't flinched.
So, after a fiery six-day surge and bullish upgrades, is NVDA stock still worth buying?
Nvidia hardly needs an introduction. It is the undisputed powerhouse behind the AI chip revolution. Boasting a market capitalization of $3.7 trillion, it earned its crown by building graphics processing units (GPUs), the brains of modern AI. Initially famed for fueling gaming and graphics, Nvidia rose to global prominence by pivoting early into AI, becoming the go-to supplier for Big Tech's data-center ambitions.
Now, CEO Jensen Huang has his sights on a new power play: sovereign AI. As countries push to build AI ecosystems free from Silicon Valley's grip, Nvidia is arming them with the tools — Blackwell GPUs, AI factories, and more. From Europe to the Middle East, billion-dollar deals are stacking up.
Nvidia kicked off 2025 with storm clouds overhead. China export curbs, rising tariffs, and geopolitical heat weighed heavily on investors' sentiment. CEO Jensen Huang warned about potential fallout from losing access to a $50 billion market, and for a while, NVDA stock faltered. But momentum flipped fast.
The AI chip king roared back, surging over 40% in just the past three months and climbing 14% over the past month. In fact, NVDA stock touched a fresh high of $158.71 on June 27. Loop Capital's Street-high price target lit the fuse, but Huang's talk of multi-trillion-dollar AI frontiers is what's keeping the bulls charged. Additionally, confidence is rising that China's export limits won't unseat Nvidia's AI dominance, especially as global demand for compute power continues to break records.
The Relative Strength Index (RSI) is now above 76, firmly in overbought territory. That signals red-hot momentum but simultaneously flashes a red flag that a breather may be near.
NVDA stock currently trades at 39 times forward earnings and 29 times forward sales, a premium to the sector median and hardly cheap on the surface. But it's a discount compared to its historical average.
Digging deeper, with earnings projected to grow by double digits this year and next and margins holding strong, NVDA stock's valuation looks more balanced than bloated. Its PEG ratio of 1.4 times even leans attractive.
Free cash flow (FCF) rose 75% annually, and management is utilizing it, spending over $14 billion on buybacks in Q1 alone. The dividend remains tiny with a 0.03% yield, but capital returns are clearly gaining steam. When you combine explosive AI demand, disciplined capital allocation, and a runway for growth, the premium feels less speculative and more like a calculated bet on long-term dominance.
On May 28, Nvidia reported its first-quarter fiscal 2026 earnings, and it was nothing short of impressive. Revenue surged to $44.1 billion, climbing 12% sequentially and 69% year-over-year (YOY), beating even the most bullish Street estimates. The firepower came from Nvidia's data center segment, which pulled $39.1 billion, a blistering 73% YOY surge. Data center revenue accounted for a dominant 88% of total revenue. Gaming wasn't asleep either, clocking a record $3.8 billion, up 48% sequentially and 42% YOY.
But it wasn't all clean lines and green candles. U.S. export restrictions on H20 AI chips to China delivered a $4.5 billion body blow, tied to excess inventory and purchase commitments. That charge dragged GAAP gross margin down to 60.5%, with non-GAAP settling at 61%. Strip out the charge, and Nvidia's non-GAAP gross margin hit a far healthier 71.3%. Non-GAAP EPS landed at $0.81, up 33% annually. That figure would have soared to $0.96 without the China hit.
Even so, the market gave its nod, and NVDA stock rose 3.3% on May 29, signaling investor confidence despite the headwinds. Looking ahead, management expects approximately $45 billion in Q2 revenue. That's with a potential $8 billion punch from H20 export curbs already factored in. With AI appetite surging worldwide, Nvidia's vision remains sharply focused, even if the road now includes navigating geopolitical turbulence alongside record-breaking growth.
Analysts monitoring Nvidia remain upbeat about the company's growth. For Q2, they expect profits to climb 43% YOY to $0.93 per share. Looking further ahead, fiscal 2026 EPS is forecast to rise 36% annually to $4, followed by another surge of 32% to $5.29 in fiscal 2027.
Loop Capital is betting big on Nvidia's future. Analyst Ananda Baruah recently boosted his NVDA price target to $250 from $175, reaffirming a 'Buy' rating. The analyst's bullish stance stems from what he calls a 'Golden Wave' of generative AI, with Nvidia sitting firmly at the center.
According to Loop, AI compute spending could skyrocket to $2 trillion by 2028, fueled by hyperscalers, sovereign AI initiatives, and the accelerating buildout of AI factories. Nvidia's upcoming Blackwell chips, designed for high-intensity reasoning models, are expected to hit full production by the October quarter, another growth catalyst. Despite Nvidia's massive rally, the analyst sees more runway ahead. In his view, Nvidia isn't peaking — it's just getting warmed up.
Meanwhile, Wedbush analyst Dan Ives is also bullish, calling Nvidia the backbone of the AI revolution. With sovereign AI investments ramping and chip demand hitting escape velocity, Ives sees Nvidia becoming the world's first $4 trillion company this year. Ives reaffirmed his 'Outperform' rating and a $175 price target on the AI chip stock.
Overall, analysts are optimistic about NVDA, giving the stock a 'Strong Buy' consensus rating. Of the 44 analysts covering the stock, 37 advise a 'Strong Buy' while three suggest a 'Moderate Buy,' three advise a 'Hold,' and one suggests a 'Strong Sell" rating.
The average analyst price target for NVDA stock is $176.62, indicating potential upside of more than 12%. Loop Capital's Street-high target price of $250 suggests that shares could rally as much as 59% from here.
Nvidia's six-day rally and soaring valuation may look like a victory lap, but this is not without warning signs. Wall Street remains enamored as price targets rise and bulls view sovereign AI as the next trillion-dollar goldmine. But insiders are quietly cashing out, and competitors are rewriting the rules, shifting AI's future from brute-force GPU scaling to leaner, smarter architectures. Meanwhile, China's market has effectively closed to the U.S. industry.
Sure, Nvidia still leads the charge. Its chips remain the backbone of AI infrastructure. But markets priced for perfection leave little room for detours. With valuation multiples high and forward growth tied to long-cycle plays, the path ahead demands more than just dominance. It demands reinvention. After this red-hot streak, the real question is not whether Nvidia is a giant. It's whether Nvidia's next leap will outpace the growing weight of its own story.
On the date of publication, Sristi Suman Jayaswal 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. This article was originally published on Barchart.com