Down 17% From Recent Highs, Is Nvidia Stock a Buy?

Core Viewpoint - Nvidia's stock has recently declined by approximately 17% from its 52-week high, raising questions about whether this presents a buying opportunity amid fluctuating investor sentiment towards AI [1][2]. Financial Performance - Nvidia's fiscal third-quarter revenue increased by 62% year over year to $57.0 billion, surpassing the 56% growth reported in the previous quarter, indicating a return to accelerating growth [5]. - The data center segment, which is crucial for AI hardware demand, saw a revenue growth of 66% year over year, reaching $51.2 billion in fiscal Q3, up from 56% growth in the prior quarter [6]. - Operating income for fiscal Q3 rose by 65% year over year to $36.0 billion, while earnings per share increased by 67% to $1.30 [6]. Future Guidance - Nvidia has provided guidance for fourth-quarter fiscal 2026 revenue of $65.0 billion, which suggests about 14% sequential growth and approximately 65% year-over-year growth [7]. Market Position and Risks - Despite the recent stock pullback making shares more appealing, the high valuation at around 43 times earnings poses risks if Nvidia cannot sustain its rapid growth or maintain high gross margins [9][13]. - The semiconductor industry is cyclical, and there are concerns that the AI buildout may slow down, which could negatively impact Nvidia's stock [10]. - Increased competition from tech giants like Alphabet and Amazon, which are developing their own chips, poses a potential threat to Nvidia's market share [10]. - Regulatory and geopolitical issues regarding AI chip sales to China add uncertainty to Nvidia's growth prospects in that market [11].