We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Nvidia remains the world's premier AI stock with an exceptional growth outlook
Shares of Nvidia are again building momentum after months of sideways action
I run screens and conduct research every day, looking for high-quality companies with strong growth profiles and reasonable valuations, and Nvidia ((NVDA - Free Report) ) 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.
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
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.
Image Source: TradingView
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Bull of the Day: Nvidia (NVDA)
Key Takeaways
I run screens and conduct research every day, looking for high-quality companies with strong growth profiles and reasonable valuations, and Nvidia ((NVDA - Free Report) ) 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.
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
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.
Image Source: TradingView
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.