Bull of the Day: Nvidia (NVDA)

I run screens and conduct research every day, looking for high-quality companies with strong growth profiles and reasonable valuations, and Nvidia (NVDA) consistently stands out. Few companies sit as squarely at the center of today’s most important secular trend.

Demand for Nvidia’s GPUs appears either secular or, if cyclical, still early enough that a downturn is not yet a concern. Roughly half a trillion dollars is expected to flow into AI-related capital spending next year, and Nvidia’s chips are estimated to account for roughly 20% of that investment. That scale underscores both the company’s dominance and the durability of its demand backdrop.

After several months of consolidation, Nvidia shares have begun to reaccelerate, recently breaking out from a well-defined technical pattern. At the same time, analysts have continued to raise earnings estimates, earning the stock a Zacks Rank #1 (Strong Buy). Improving clarity around US–China semiconductor trade policies has also removed a near-term overhang, reopening a source of demand that had previously been constrained.

Below, we outline the outlook for the world’s largest publicly traded company and explain why Nvidia remains well positioned to continue leading the market going forward.

Nvidia Shares Bolstered by Strong Growth Forecasts

Growth expectations for Nvidia remain exceptional. Sales are projected to rise roughly 63% next year and another 43% in 2027, reflecting an incredible $100 billion jump from one year to the next. On the bottom line, earnings are expected to climb 55.5% next year and 53% the following year, underscoring the company’s powerful operating leverage.

What also makes this growth profile compelling is valuation. Despite its dominance and momentum, Nvidia trades at about 39.5x forward earnings. With consensus estimates calling for 46.3% annual EPS growth over the next three to five years, the stock carries a PEG ratio of roughly 0.85, a level typically associated with undervalued growth stocks, not the world’s most important AI supplier.

In other words, investors are not paying a premium commensurate with Nvidia’s growth trajectory. If current forecasts hold, valuation support alone provides a cushion, while continued execution on revenue, margins, and ecosystem expansion offers meaningful upside.

Nvidia Stock Breaks Out

Nvidia shares staged a decisive breakout this week, resolving higher from a well-defined descending bullish wedge, a pattern that typically signals trend continuation. After several months of consolidation, the stock has clearly regained momentum, suggesting selling pressure has been absorbed and buyers are regaining control.

With the breakout now confirmed, the technical setup points to a renewed push higher, and a retest of record highs in the near term would not be surprising. Importantly, this move is occurring alongside rising earnings estimates and improving fundamental visibility, reinforcing the signal and increasing the likelihood that the breakout proves durable.

Can Investors Buy Shares in NVDA?

Given the combination of accelerating earnings growth, reasonable valuation relative to its growth profile, and a confirmed technical breakout, Nvidia remains an attractive buy for investors with a medium- to long-term horizon. The stock has spent several months consolidating prior gains, allowing fundamentals to catch up to price, and that process now appears complete.

While near-term volatility is always possible, particularly in a stock that has already delivered outsized returns, the underlying setup argues that pullbacks are more likely to be opportunities rather than warning signs. With earnings estimates still moving higher, demand visibility extending well into next year, and technical momentum turning decisively positive, Nvidia continues to justify its leadership position in the market and remains the core holding in the AI theme.

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

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