NVIDIA Stock Near 52-Week High: Time to Lock in Gains or Stay Put?
Year to date, shares of NVIDIA have gained 14.1% compared with the Zacks Computer and Technology sector's rise of 5.6%. Additionally, the company has outperformed major semiconductor stocks, including Intel Corporation INTC, Advanced Micro Devices, Inc. AMD and QUALCOMM Incorporated QCOM. Shares of Intel, Advanced Micro Devices and QUALCOMM have rallied 13.9%, 12.6% and 3.7%, respectively.
This outperformance shows investors are becoming increasingly confident in NVIDIA's long-term story, even in a volatile market shaped by trade conflicts and geopolitical risks. We believe this momentum is grounded in strong fundamentals, and NVDA's long-term outlook justifies a hold position for now.
YTD Price Return Performance
AI Demand Keeps Driving NVIDIA's Growth Story
NVIDIA's most powerful growth engine continues to be its Data Center business. In the first quarter of fiscal 2026, the segment brought in $39.1 billion in revenues, a staggering 89% of total company sales. This represents 73% year-over-year growth and a 10% sequential rise, primarily fueled by the explosive demand for AI.
The company's cutting-edge Hopper 200 and Blackwell GPU platforms are being rapidly adopted, as cloud and enterprise customers race to scale up AI infrastructure. A large chunk of this growth is coming from hyperscalers, who are betting big on NVIDIA's GPUs to support their expanding AI workloads.
With the Blackwell architecture promising up to 25x better AI inference performance than Hopper 100, NVIDIA continues to raise the bar. The upcoming Blackwell Ultra and Vera Rubin platforms are likely to strengthen the company's position further as global demand for AI computing accelerates.
NVIDIA's Financials Stay Strong Despite China Headwinds
Despite some geopolitical setbacks, NVIDIA's financials remain rock solid. In the first quarter of fiscal 2026, revenues jumped 69% from the year-ago quarter, while non-GAAP earnings per share rose 33%.
Even with an $8 billion expected revenue hit in the second quarter due to export restrictions on its H20 chips in China (after a $2.5 billion revenue loss in the first quarter), NVIDIA remains confident in its momentum. Its second-quarter guidance of $45 billion in revenues marks a 50% jump from the same quarter last year.
Wall Street sees this trend continuing. The Zacks Consensus Estimate projects revenue growth of 51.4% in fiscal 2026 and 25.2% in 2027, with earnings growth of 41.8% and 31.8%, respectively. These numbers reinforce NVIDIA's position as a long-term growth story, one that remains intact despite near-term geopolitical hurdles.
NVIDIA's High Valuation Warrants a Caution
Valuation-wise, NVIDIA is overvalued, as suggested by the Zacks Value Score of D.
In terms of forward 12-month Price/Earnings (P/E), NVDA shares are trading at 31.91X, higher than the sector's 26.7X.
Compared with other major semiconductor players, NVIDIA is trading at a lower P/E multiple than Intel while at a higher multiple than Advanced Micro Devices and QUALCOMM. At present, Intel, Advanced Micro Devices and QUALCOMM are trading at P/E multiples of 44.84X, 28.53X and 13.52X, respectively.
Final Thoughts: Stick to NVDA Stock
NVIDIA's dominance in AI chips, robust growth in its data center segment and strong financials make a good case for holding the stock. The valuation looks high, but when a company's growth engine is so powerful, sometimes the premium is worth paying.
NVIDIA carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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