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NVIDIA Soars 17% in Three Months: Should Investors Buy the Stock?
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Key Takeaways
NVIDIA shares rose 17.2% in three months as Q2 revenue jumped 106% year over year to $96.22 billion.
Blackwell demand remains strong, while Vera Rubin is expected to make up about 20% of Q3 Data Center revenue.
NVIDIA generated $21.34 billion in Q2 free cash flow and trades at a forward P/E of 17.18.
NVIDIA Corporation (NVDA - Free Report) has delivered a strong performance over the past three months, with shares gaining 17.2%. This compares favorably with the 5.8% rise of the broader Zacks Computer and Technology sector.
NVIDIA has also outperformed several major semiconductor peers such as Intel Corporation (INTC - Free Report) , Broadcom Inc. (AVGO - Free Report) and Marvell Technology, Inc. (MRVL - Free Report) . Over the past three months, Marvell Technology stock has risen 7.7%, while shares of Broadcom and Intel have fallen 2.6% and 0.1%, respectively.
NVIDIA Three-Month Price Return Performance
Image Source: Zacks Investment Research
The rally is supported by more than just investor enthusiasm around artificial intelligence (AI). NVIDIA continues to post exceptional financial results, while demand for AI infrastructure remains strong. Its expanding product portfolio, rising customer base and strong cash generation also provide additional support for the long-term story.
The bigger question now is whether the stock still offers enough upside after its recent gains.
Strong Q2 Results Keep NVIDIA’s AI Growth Story on Track
NVIDIA's second-quarter fiscal 2027 results provide a strong reason for investors to remain optimistic. Revenues jumped 106% year over year and 18% sequentially to $96.22 billion. Data Center revenues were the key driver, surging 117% year over year and 18% sequentially to $89.02 billion.
The Blackwell platform continues to see strong demand from hyperscalers and other AI customers. At the same time, NVIDIA's profitability remains exceptional. Non-GAAP gross margin rose to 75% from 72.5% a year earlier, while non-GAAP operating income increased 124% to $63.96 billion.
Non-GAAP net income climbed 118% to $53.95 billion, pushing earnings per share up 120% to $2.22.
NVIDIA Corporation Price, Consensus and EPS Surprise
The near-term outlook also remains strong. NVIDIA expects fiscal third-quarter revenues of $108 billion, plus or minus 2%. This outlook excludes Data Center compute revenues from China, suggesting current expectations do not depend on a recovery in that market.
Blackwell and Vera Rubin Add More Fuel to NVDA’s Growth
NVIDIA's product transition provides another important growth driver. Blackwell is already contributing heavily to revenues, while the newer Vera Rubin platform is beginning to ramp up.
NVIDIA started shipping Vera Rubin in August and expects the platform to account for about 20% of Data Center revenues in the third quarter. The company estimates that revenue opportunity per gigawatt of AI infrastructure has increased from approximately $18 billion with Hopper to $25 billion with Blackwell and $40 billion with Vera Rubin.
This is important because NVIDIA is increasingly selling a complete AI infrastructure platform rather than relying solely on GPUs (Graphics Processing Units). CPUs (Central Processing Units), networking, software and complete AI factory systems are becoming larger parts of its opportunity.
Customer diversification is another upside. Hyperscale revenues increased 117% year over year to $48.71 billion in the second quarter, while ACIE revenues, which include AI clouds, industrial and enterprise customers, jumped 138% to $40.31 billion.
Amazon Web Services' plan to deploy another 2 million NVIDIA GPUs through the second quarter of fiscal 2029 also highlights the potential durability of cloud demand.
NVIDIA's growth is also translating into substantial cash flow. The company generated $24.08 billion in operating cash flow and $21.34 billion in free cash flow during the second quarter.
This financial strength allows NVIDIA to invest aggressively in supply, product development and its broader AI ecosystem while also returning capital to shareholders.
The company returned approximately $25.78 billion through share repurchases and dividends in the quarter. In late September 2026, NVIDIA also increased its share repurchase authorization by $150 billion, leaving a total of $235 billion available for future buybacks.
At the same time, NVIDIA is committing significant resources to secure supply. Supplier commitments reached $279 billion at the end of the second quarter, largely tied to memory procurement.
These commitments show that management expects AI demand to remain strong, although they also increase the importance of execution and supply-chain management.
NVIDIA’s Growth Story Remains Broad-Based
NVIDIA's long-term opportunity increasingly depends on more than hyperscaler spending. AI adoption is spreading across cloud providers, enterprises, industrial applications and AI-focused infrastructure companies.
Management expects fiscal 2028 revenues to grow approximately 70%. It also described this expectation as supply-constrained, suggesting that the company's current revenue outlook is based partly on available supply rather than a lack of customer demand.
This creates a significant potential upside if NVIDIA can continue expanding production while maintaining its technology lead.
NVIDIA’s Valuation Is Still Reasonable
Despite its recent rally, NVIDIA's valuation remains attractive relative to its growth potential.
The stock currently trades at a forward 12-month price-to-earnings (P/E) ratio of 17.18, below the Zacks Computer and Technology sector average of 21.09.
NVIDIA Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
It also trades at a much lower valuation than several semiconductor peers. Intel carries a forward P/E of 65.06, Marvell Technology trades at 45.48, while Broadcom is valued at 19.04.
Given NVIDIA's superior revenue growth, industry-leading margins, dominant AI position and exceptional cash generation, its current valuation appears far from excessive.
Final Verdict: Buy NVDA Stock for Now
NVIDIA's 17% three-month gain reflects continued confidence in its AI leadership, and the company's latest financial results suggest that the rally is backed by strong operating performance.
Blackwell is driving substantial revenues, Vera Rubin is opening another growth cycle, and demand is broadening beyond traditional hyperscalers. At the same time, strong free cash flow provides financial flexibility to support multi-billion supplier commitments, investment in growth initiatives and execute a large share buyback plan. The company’s reasonable P/E valuation multiple is another positive factor for investing in NVDA stock.
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NVIDIA Soars 17% in Three Months: Should Investors Buy the Stock?
Key Takeaways
NVIDIA Corporation (NVDA - Free Report) has delivered a strong performance over the past three months, with shares gaining 17.2%. This compares favorably with the 5.8% rise of the broader Zacks Computer and Technology sector.
NVIDIA has also outperformed several major semiconductor peers such as Intel Corporation (INTC - Free Report) , Broadcom Inc. (AVGO - Free Report) and Marvell Technology, Inc. (MRVL - Free Report) . Over the past three months, Marvell Technology stock has risen 7.7%, while shares of Broadcom and Intel have fallen 2.6% and 0.1%, respectively.
NVIDIA Three-Month Price Return Performance
Image Source: Zacks Investment Research
The rally is supported by more than just investor enthusiasm around artificial intelligence (AI). NVIDIA continues to post exceptional financial results, while demand for AI infrastructure remains strong. Its expanding product portfolio, rising customer base and strong cash generation also provide additional support for the long-term story.
The bigger question now is whether the stock still offers enough upside after its recent gains.
Strong Q2 Results Keep NVIDIA’s AI Growth Story on Track
NVIDIA's second-quarter fiscal 2027 results provide a strong reason for investors to remain optimistic. Revenues jumped 106% year over year and 18% sequentially to $96.22 billion. Data Center revenues were the key driver, surging 117% year over year and 18% sequentially to $89.02 billion.
The Blackwell platform continues to see strong demand from hyperscalers and other AI customers. At the same time, NVIDIA's profitability remains exceptional. Non-GAAP gross margin rose to 75% from 72.5% a year earlier, while non-GAAP operating income increased 124% to $63.96 billion.
Non-GAAP net income climbed 118% to $53.95 billion, pushing earnings per share up 120% to $2.22.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote
The near-term outlook also remains strong. NVIDIA expects fiscal third-quarter revenues of $108 billion, plus or minus 2%. This outlook excludes Data Center compute revenues from China, suggesting current expectations do not depend on a recovery in that market.
Blackwell and Vera Rubin Add More Fuel to NVDA’s Growth
NVIDIA's product transition provides another important growth driver. Blackwell is already contributing heavily to revenues, while the newer Vera Rubin platform is beginning to ramp up.
NVIDIA started shipping Vera Rubin in August and expects the platform to account for about 20% of Data Center revenues in the third quarter. The company estimates that revenue opportunity per gigawatt of AI infrastructure has increased from approximately $18 billion with Hopper to $25 billion with Blackwell and $40 billion with Vera Rubin.
This is important because NVIDIA is increasingly selling a complete AI infrastructure platform rather than relying solely on GPUs (Graphics Processing Units). CPUs (Central Processing Units), networking, software and complete AI factory systems are becoming larger parts of its opportunity.
Customer diversification is another upside. Hyperscale revenues increased 117% year over year to $48.71 billion in the second quarter, while ACIE revenues, which include AI clouds, industrial and enterprise customers, jumped 138% to $40.31 billion.
Amazon Web Services' plan to deploy another 2 million NVIDIA GPUs through the second quarter of fiscal 2029 also highlights the potential durability of cloud demand.
Strong Cash Generation Supports NVIDIA’s Expansion
NVIDIA's growth is also translating into substantial cash flow. The company generated $24.08 billion in operating cash flow and $21.34 billion in free cash flow during the second quarter.
This financial strength allows NVIDIA to invest aggressively in supply, product development and its broader AI ecosystem while also returning capital to shareholders.
The company returned approximately $25.78 billion through share repurchases and dividends in the quarter. In late September 2026, NVIDIA also increased its share repurchase authorization by $150 billion, leaving a total of $235 billion available for future buybacks.
At the same time, NVIDIA is committing significant resources to secure supply. Supplier commitments reached $279 billion at the end of the second quarter, largely tied to memory procurement.
These commitments show that management expects AI demand to remain strong, although they also increase the importance of execution and supply-chain management.
NVIDIA’s Growth Story Remains Broad-Based
NVIDIA's long-term opportunity increasingly depends on more than hyperscaler spending. AI adoption is spreading across cloud providers, enterprises, industrial applications and AI-focused infrastructure companies.
Management expects fiscal 2028 revenues to grow approximately 70%. It also described this expectation as supply-constrained, suggesting that the company's current revenue outlook is based partly on available supply rather than a lack of customer demand.
This creates a significant potential upside if NVIDIA can continue expanding production while maintaining its technology lead.
NVIDIA’s Valuation Is Still Reasonable
Despite its recent rally, NVIDIA's valuation remains attractive relative to its growth potential.
The stock currently trades at a forward 12-month price-to-earnings (P/E) ratio of 17.18, below the Zacks Computer and Technology sector average of 21.09.
NVIDIA Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
It also trades at a much lower valuation than several semiconductor peers. Intel carries a forward P/E of 65.06, Marvell Technology trades at 45.48, while Broadcom is valued at 19.04.
Given NVIDIA's superior revenue growth, industry-leading margins, dominant AI position and exceptional cash generation, its current valuation appears far from excessive.
Final Verdict: Buy NVDA Stock for Now
NVIDIA's 17% three-month gain reflects continued confidence in its AI leadership, and the company's latest financial results suggest that the rally is backed by strong operating performance.
Blackwell is driving substantial revenues, Vera Rubin is opening another growth cycle, and demand is broadening beyond traditional hyperscalers. At the same time, strong free cash flow provides financial flexibility to support multi-billion supplier commitments, investment in growth initiatives and execute a large share buyback plan. The company’s reasonable P/E valuation multiple is another positive factor for investing in NVDA stock.
Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.