After a shaky beginning to 2025, Nvidia stock has staged one of the most spectacular comeback rallies anyone can remember. With a rocketing 69% from its April 52-week low to an all-time high $4 trillion market cap, it became the first-ever company to do so. While this may appear to be the suitable moment to take profits, investors are now wondering whether this trend is sustainable, and is Nvidia stock still a buy.
Increased Valuation
Nvidia’s recent rally has been noticed in valuation metrics. After having traded at a relative discount in April, with a trailing P/E in the low 30s and a forward P/E less than 25, the stock has again moved into premium range. To put that into perspective, it had been lower than the Nasdaq-100 average earnings multiple of 32 back then. Those who acted at that time are reaping humongous returns now.
Though, just because a valuation is rich doesn’t always mean it’s overpriced, particularly not in Nvidia’s scenario. In contrast to many growth stocks which are trading on promises and theories, Nvidia is firing in several high-growth markets. From AI chips and accelerated computing to cloud gaming and enterprise software, the company is embedded in multibillion-dollar markets with real demand and momentum.
Nvidia’s Data Centers
One of the key drivers of Nvidia’s expansion is its data center business, which accounted for 88% of total revenue in the last quarter. It is estimated that this area is expanding to $180 billion in revenue during fiscal 2026, which is a 56% increase from the same period last year. The reason for this boom is the heavy demand for AI GPUs, which are key hardware for training and executing large-scale AI models.
Bank of America estimates that Nvidia embraces an 80%-85% portion of the AI chip market. Analyst Vivek Arya attributes this domination to Nvidia’s end-to-end ownership of its ecosystem, from the designing of chips to supply chain logistics. Such control makes Nvidia to be best placed among any competitor to capitalize on the rising growth of AI infrastructure.
The potential here is huge. McKinsey projects that $6.7 trillion in expenditures will be spent on AI and non-AI data centers by 2030. 60% of that, which is nearly $4 trillion, will go to chipmakers and hardware companies. Even if Nvidia drops some of that share to competitors, the sheer market size may still transform to exponential returns.
Nvidia’s Enterprise AI
Nvidia’s hardware is great, but its enterprise AI software can become a big growth engine quietly. Early in 2025, the company said enterprise revenue had almost doubled annually, which indicated a robust industry-wide adoption. These offerings assist businesses in optimizing AI agents, keeping infrastructure in check, and enhancing model performance and security.
Nvidia’s generative AI platform is particularly promising, it’s already assisting clients with improving accuracy and lowering latency for LLM deployments. With the enterprise AI market expected to reach $104 billion by 2030, Nvidia’s software platform could be instrumental in determining how businesses deploy AI at scale.
Is Nvidia Stock a Buy?
Though Nvidia’s stock has already returned astonishing amounts in 2025, its long-term promise is even more persuasive. Price targets from analysts and short-term earnings multiples, might undervalue the magnitude of Nvidia’s opportunity. With leading positions in both AI software and hardware, and exposure to markets set to expand by trillions of dollars in the next five years, Nvidia has everything needed to keep surpassing the forecasts. Long-term investors may discover that the road to a $10 trillion valuation is no longer a dream but an achievable prospect. While other chipmakers mess around with innovation, Nvidia essentially builds the future.
If you’re holding out for Nvidia stock to cool off before investing, there is no benefit for that because it has already been transformed into a spaceship. The depth of Nvidia and the magnitude of its growth potential are nearly extraordinary. Although the way to a $10 trillion valuation may seem highly ambitious and difficult, so did $4 trillion a few months ago.
This is not a short-term hype, it’s a structural giant riding multiple technology trends at once. Whether it’s teaching the next generation of AI systems, powering cloud gaming, or creating enterprise AI platforms, Nvidia isn’t racing towards the future, rather it is the future.
