By Keithen Drury
Publication Date: 2026-05-04 15:54:00
Nvidia (NVDA 1.07%) is in some ways a seemingly predictable stock. Every year, the market assumes that this will be the year that the company’s revenue growth will slow down and the stock will come back down to Earth. As a result, the stock looks a bit undervalued at the start of the year and delivers ho-hum returns. But then, artificial intelligence investing fever tends to make an appearance around the start of the Q1 earnings season, and Nvidia’s stock booms as a result.
Last year, it rose 20% in May. In 2024, it rose 32% in May. This year, it had a strong April, rising by around 20%. However, if history is any guide, Nvidia stock could continue its run well into May.
Image source: Getty Images.
Nvidia’s stock is still trending below its historical valuation norms
When assessing Nvidia’s stock, I think it’s best to use the forward price-to-earnings ratio. The reason for that is simple: Nvidia’s expected top- and bottom-line numbers in the years ahead are very different from those it has delivered in its recent past. While you can argue for measuring a company based on its trailing earnings when that company isn’t growing incredibly fast (say between 10% and 20% year over year), Nvidia’s fourth-quarter growth rate was 73% year over year. Management also guided for 77% growth in Q1.
With that sort of rapid growth, the trailing earnings metric isn’t a great reflection of the company’s value.
Today’s Change
(-1.07%) $-2.13
Current Price
$196.32
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