By Adria Cimino – Apr 27, 2026 at 7:10PM EST
Key Points
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Nvidia stock sank in the first quarter of the year amid various headwinds.
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In recent weeks, though, the stock has rebounded.
Nvidia’s path from $2 to $200
First, a quick note about why Nvidia, a company that’s been around for more than 30 years, has attracted such attention over the past few years. After all, during most of the company’s history, the stock traded for less than $2 a . (Today it trades for more than $200.) During that long history, Nvidia primarily served the video gaming industry with its graphics processing units (GPUs) — an industry that helped the company progressively grow but didn’t necessarily represent a game-changing opportunity.
When Nvidia entered the AI market, though, — as the first to offer GPUs to power AI development — investors recognized the potential and watched as revenue exploded higher.
Importantly, this wasn’t just a one-time deal. Nvidia’s GPUs are crucial tools driving tasks throughout the AI story, from the training of models to the actual thinking process that happens as models work on a particular problem. And GPUs are set to play the key role in the operation of future AI products, too, such as humanoid robots.
Meanwhile, the fact that Nvidia got in on this market ahead of rivals and made innovation its priority put it on track to stay in the driver’s seat.
Expand
NASDAQ: NVDA
Nvidia
Today’s Change
(3.97%) $8.27
Current Price
$216.54
Key Data Points
Market Cap
$5.1T
Day’s Range
$207.40 – $216.82
52wk Range
$104.08 – $216.82
Volume
6.7M
Avg Vol
174M
Gross Margin
71.07%
Dividend Yield
0.02%
A peak in valuation
The stock roared higher, reaching a valuation of more than 48x forward earnings estimates early last year .
Now, here are my thoughts about Nvidia’s stock today — after its decline earlier this year and its recent recovery.
First of all, pressures from the first quarter have lifted, at least somewhat. Soaring demand for AI, as noted by many companies, supports the idea of strong long-term revenue prospects. And a ceasefire in Iran spurred optimism about a possible peace agreement.
Beyond this, though, I think investors are excited about two things. First, the very recent comments about AI demand from players, including Taiwan Semiconductor Manufacturing and Intel, suggest that Nvidia will deliver yet another blowout earnings report when it announces figures in May.
Clues from TSMC and Intel
TSMC is the maker of Nvidia chips, and those of other leaders, and the company is in close communication with these customers and their customers. Intel’s comments are also bright for Nvidia as the company spoke of high AI demand for Intel’s central processing units (CPUs) — it’s important to remember that the two companies struck a deal last year that involves Intel building custom CPUs for Nvidia data center products. So Intel’s comments regarding AI demand for CPUs may translate into strength for Nvidia, too.
Second, considering this potential for another fantastic earnings report from Nvidia, investors may see real opportunity in the company’s valuation right now. The stock trades at about 24x forward earnings estimates, which looks dirt cheap considering earnings performance so far and the enormous growth potential moving forward.
So here’s what’s happening with Nvidia stock: Investors are once again confident about Nvidia’s AI story, thanks to the clues mentioned above, and with more optimism regarding the general market environment, they’re ready to rotate back into growth stocks — particularly at bargain prices. And now, with Nvidia’s earnings report on May 20 as a possible catalyst, growth investors are buying the stock hand over fist. All of this suggests that this isn’t just a temporary rebound, and this positive momentum may be set to last.
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About the Author
Adria Cimino is a contributing Motley Fool stock market analyst covering healthcare, technology, and consumer goods sectors. Prior to The Motley Fool, Adria covered the European stock market and U.S. stocks pre-market trading for Bloomberg News, Bloomberg TV, and Bloomberg Radio for more than a decade. Earlier in her career, she wrote about biotech, medtech, and technology companies in Boston for Mass High Tech, an American City Business Journals publication. She holds a bachelor’s degree in mass communications from the University of South Florida.
Stocks Mentioned
Nvidia
NASDAQ: NVDA
$216.54
(+3.97%)+$8.27
Intel
NASDAQ: INTC
$84.96
(+2.93%)+$2.42
Taiwan Semiconductor Manufacturing
NYSE: TSM
$404.98
(+0.63%)+$2.52
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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