NVIDIA Stock Jumps 59% in Three Months: Time to Hold or Exit?

NVIDIA Corporation NVDA has seen its share price soar 59.3% over the past three months. This surge has significantly outperformed the broader Zacks Computer and Technology sector, which gained 22.7% during the same period.

The stock closed at $180.00 on Aug. 4, shy of its recently hit 52-week high of $183.30 on July 31, reflecting strong investor confidence in NVIDIA’s prospects.

Over the past three months, NVDA has outperformed major semiconductor stocks, including Broadcom AVGO, Marvell Technology MRVL and QUALCOMM QCOM. Shares of Broadcom, Marvell Technology and QUALCOMM have rallied 48.9%, 25.5% and 5.5%, respectively.

3-Month Price Return Performance

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.

AI Boom Keeps Aiding NVIDIA’s Data Center Business

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 Resilient Financials Despite Geopolitical 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 52% in fiscal 2026 and 25.9% in fiscal 2027, with earnings growth of 42.5% and 32.2%, 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 Valuation Warrants 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 36.3X, higher than the sector’s 27.68X.

Compared with other major semiconductor players, NVIDIA is trading at a lower P/E multiple than Broadcom, while at a higher multiple than Marvell Technology and QUALCOMM. At present, Broadcom, Marvell Technology and QUALCOMM are trading at P/E multiples of 37.79X, 24.03X and 12.47X, respectively.

Final Thoughts: 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.

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This article originally published on Zacks Investment Research (zacks.com).

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