NVIDIA Stock Soars 19% in a Month: Time to Hold or Book Profits?
NVIDIA Corporation NVDA has seen its share price soar 18.7% over the past month. This surge has significantly outperformed the broader Zacks Computer and Technology sector, which gained 6.9% during the same period.
This outperformance raises the question: Is it time to take profits, or should investors continue holding NVDA as the rally extends?
Trade Truce Fuels Rally in NVIDIA Shares
NVIDIA's recent surge has been driven in part by improving sentiment around U.S.-China trade. The two countries have rolled back tariffs, with the United States reducing tariffs on Chinese imports to 30% from 145%, while China cut duties on U.S. goods from 125% to 10%. These new terms will be in place for 90 days.
This 90-day reprieve has eased concerns about prolonged trade disruptions, improving market sentiment and lifting stocks across sectors, especially tech and semiconductors. This broader rally has also powered gains in major semiconductor players, including Advanced Micro Devices AMD, Micron Technology MU and Broadcom AVGO. Over the past month, shares of Advanced Micro Devices, Micron and Broadcom have risen 10%, 17.4% and 20.6%, respectively.
For NVIDIA, this trade relief was just the catalyst needed to reignite buying interest in a stock already backed by strong fundamentals. Given its solid footing in AI and chip innovation, this rebound has legs, suggesting that holding the stock may still be the better call.
Data Center Demand Keeps NVIDIA on Top
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 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 its position further as global demand for AI computing accelerates.
NVIDIA's Resilient Financials 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% in fiscal 2026 and 24% in 2027, with earnings growth of 40% and 32%, respectively. These numbers reinforce NVIDIA's position as a long-term growth story, one that remains intact despite near-term geopolitical hurdles.
NVIDIA's Premium Price Tag Signals Short-Term 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 29.13X, higher than the sector's 25.52X.
Compared with other major semiconductor players, NVIDIA is trading at a lower P/E multiple than Broadcom while at a higher multiple than Advanced Micro Devices and Micron Technology. At present, Broadcom, Advanced Micro Devices and Micron Technology are trading at P/E multiples of 32.91X, 23.49X and 9.61X, respectively.
Conclusion: Hold NVIDIA Stock for Now
NVIDIA's strong fundamentals, dominant position in AI and impressive growth outlook make a compelling case for staying invested. While valuation is on the higher side, the company's momentum, both operationally and financially, supports holding the stock.
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.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
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