NVIDIA Stock Soars 19% in a Month: Time to Hold or Book Profits?

Group 1: Stock Performance and Market Sentiment - NVIDIA Corporation (NVDA) has experienced an 18.7% increase in share price over the past month, significantly outperforming the Zacks Computer and Technology sector, which gained 6.9% during the same period [1] - The surge in NVIDIA's shares is partly attributed to improved sentiment surrounding U.S.-China trade relations, with the U.S. reducing tariffs on Chinese imports from 145% to 30% and China cutting duties on U.S. goods from 125% to 10% for a 90-day period [2][3] - This trade relief has alleviated concerns about prolonged disruptions, boosting market sentiment and benefiting stocks across various sectors, particularly technology and semiconductors [3] Group 2: Data Center Business Growth - NVIDIA's Data Center segment remains its primary growth driver, generating $39.1 billion in revenues in the first quarter of fiscal 2026, accounting for 89% of total company sales, with a year-over-year growth of 73% and a sequential rise of 10% [5][7] - The demand for AI infrastructure is a significant factor fueling this growth, with hyperscalers increasingly adopting NVIDIA's GPUs to support their expanding AI workloads [8] Group 3: Financial Performance and Guidance - Despite geopolitical challenges, NVIDIA's financials are robust, with revenues increasing by 69% year-over-year in the first quarter of fiscal 2026 and non-GAAP earnings per share rising by 33% [10] - The company anticipates a revenue hit of $8 billion in the second quarter due to export restrictions on its H20 chips in China, yet maintains a strong second-quarter revenue guidance of $45 billion, reflecting a 50% increase from the same quarter last year [11][12] Group 4: Valuation and Investment Outlook - NVIDIA's current valuation is considered high, with a forward 12-month Price/Earnings (P/E) ratio of 29.13X, exceeding the sector's average of 25.52X [13] - Compared to other semiconductor companies, NVIDIA's P/E multiple is lower than Broadcom's 32.91X but higher than Advanced Micro Devices' 23.49X and Micron Technology's 9.61X [16] - The strong fundamentals, dominant position in AI, and positive growth outlook suggest that holding NVIDIA stock may be advisable despite its high valuation [17]