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

Core Insights - NVIDIA Corporation (NVDA) has experienced a significant share price increase of 59.3% over the past three months, outperforming the broader Zacks Computer and Technology sector, which gained 22.7% during the same period [1][10] - The stock closed at $180.00 on August 4, approaching its 52-week high of $183.30 reached on July 31, indicating strong investor confidence in NVIDIA's future prospects [1][10] Performance Comparison - Over the last three months, NVDA has outperformed major semiconductor stocks such as Broadcom (AVGO), Marvell Technology (MRVL), and QUALCOMM (QCOM), which saw share price increases of 48.9%, 25.5%, and 5.5%, respectively [2] Data Center Business Growth - NVIDIA's Data Center business 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% [6][10] - The demand for AI is a significant factor driving this growth, with hyperscalers increasingly adopting NVIDIA's GPUs to support their expanding AI workloads [7] Technological Advancements - The introduction of the Hopper 200 and Blackwell GPU platforms is enhancing NVIDIA's competitive edge, with the Blackwell architecture promising up to 25 times better AI inference performance compared to the previous generation [8] - Upcoming platforms like Blackwell Ultra and Vera Rubin are expected to further strengthen NVIDIA's market position as global demand for AI computing accelerates [8] Financial Resilience - Despite geopolitical challenges, NVIDIA's financial performance remains 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% [11] - The company anticipates Q2 revenues of $45 billion, reflecting a 50% increase compared to the same quarter last year, despite an expected $8 billion revenue impact from export restrictions on its H20 chips in China [12][13] Valuation Considerations - NVIDIA's current valuation is considered high, with a forward 12-month Price/Earnings (P/E) ratio of 36.3X, exceeding the sector average of 27.68X [14] - Compared to other semiconductor companies, NVIDIA's P/E multiple is lower than Broadcom's 37.79X but higher than Marvell Technology's 24.03X and QUALCOMM's 12.47X [15][17] Investment Outlook - NVIDIA's strong fundamentals, dominant position in the AI sector, and impressive growth outlook support a hold position for investors, despite the high valuation [18]