After a rough start to 2026, shares of AI (artificial intelligence) chipmaker Nvidia (NVDA +1.80%) have come roaring back. The stock has soared about 19% over the last 30 days, and at one point in late April completed more than a 32% rally off a late-March low. With the stock trading close to $212 as of this writing, they’re just shy of their April 27 all-time closing high of $216.61.
That kind of run might give some investors pause, especially heading into the company’s fiscal first-quarter results on May 20. Has the easy money already been made? Or could shares keep climbing as the AI build-out rolls on? The answer comes down to how durable hyperscaler spending really is, and whether Nvidia’s pricing power can hold up as more customers begin developing their own chips.
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Growth that keeps accelerating
The recent rally has roots in financial results that look almost too good (is that a thing?). When Nvidia reported its fiscal fourth quarter of 2026 (the period ended Jan. 25, 2026) in late February, revenue rose 73% year over year to $68.1 billion. The impressive rate was an acceleration from the prior quarter, when revenue rose 62%. For a company with a market capitalization measured in the trillions, this sort of growth is unprecedented.
Almost all of the growth came from Nvidia’s data center business. Revenue from the segment hit a record $62.3 billion in fiscal Q4 — up 75% year over year and accounting for more than 91% of total sales. For the full year, data center revenue rose 68% to $193.7 billion. Profitability moved in the right direction, too. The company’s non-GAAP (adjusted) gross margin expanded to 75.2% in fiscal Q4, up from 73.6% in the prior quarter.
Perhaps more notable than the results themselves is Nvidia’s guidance. Management forecasts fiscal first-quarter revenue of $78 billion, plus or minus 2% — which would mark another acceleration, to about 77% year-over-year growth. And that outlook explicitly excludes any data center compute revenue from China.
“Demand for AI infrastructure continues to exceed our expectations,” said chief financial officer Colette Kress during Nvidia’s fiscal fourth-quarter earnings call. In addition, Kress signaled that the company expects sequential revenue growth throughout calendar 2026, surpassing the $500 billion Blackwell and Rubin revenue opportunity that Nvidia previously outlined.
Suffice it to say, the business is firing on all cylinders headed into its fiscal first-quarter earnings call this month.
A reasonable price for an unreasonable business
Given the recent surge in shares, you might assume the stock looks expensive. Yet its price-to-earnings ratio of about 43 sits well below Nvidia’s 10-year average. Additionally, for a business growing revenue near 75% and posting a net profit margin above 55%, that multiple is arguably undemanding.
That doesn’t make Nvidia a low-risk stock, however. The risks here are real, and they come from more than one direction.
Some of Nvidia’s biggest customers are quietly developing their own chips. Amazon‘s silicon business recently hit a combined annual revenue run rate of more than $20 billion last year. Alphabet‘s TPUs (tensor processing units) are winning investment from AI specialist Anthropic. And Meta has been cozying up with Alphabet as well. None of this, of course, is enough to dethrone Nvidia today, but the long-term direction is worth watching.
The China question hasn’t gone away, either. Even with the Trump administration approving sales of H200 chips to certain Chinese customers, Nvidia’s own fiscal first-quarter outlook assumes nothing from Chinese data center compute revenue — a clear acknowledgment of the uncertainty regarding trade policies the company faces in the important market.
And then there’s the broader question of whether AI infrastructure spending sustains itself. Hyperscalers continue to raise their budgets — Microsoft outlined about $190 billion in planned capital expenditures for 2026, and Meta lifted the high end of its range to $145 billion — but a digestion phase at some point would not be shocking.
So, what should investors do?
With strong momentum behind the stock and a valuation that looks reasonable relative to growth, a small position could make sense for those who believe the AI build-out still has years to run. But tread carefully: there’s significant uncertainty surrounding what the shape of this AI boom will really look like. For investors willing to accept that uncertainty, though, owning a little Nvidia today may still pay off if we are truly in the early innings of this AI cycle.