NVIDIA’s stock has been on fire lately. In just one month, its price surged by 18.7%, leaving the rest of the tech world, which grew only 6.9%, far behind. This impressive run has investors asking: Should I take my profits now, or is there more upside ahead?

Trade Truce Sparks Market Optimism

Trade-related conflicts have historically impeded both the Chinese and American tech sectors in the long run. The goods tariffs were really high; a whopping 145% for U.S. tariffs on Chinese imports, while 125% was for the Chinese tariffs on imports from the U.S. Such exorbitant tariffs had heightened fears that the long disruptions would affect supply chains and earnings for most companies significantly.

Recently, the two countries agreed to a massive cut in tariffs for 90 days. The U.S. slashed tariffs on Chinese imports to 30 percent, while China dropped duties on U.S. goods to 10 percent. Easing the trade tensions temporarily has helped calm market fears, as evidenced by a rally in the stocks, particularly in technology and semiconductors. 

Major semiconductor companies whose stocks rose over 10% include Advanced Micro Devices (AMD), Micron Technology (MU), and Broadcom (AVGO), whose Chinese counterparts recorded increases of 10, 17.4 and 20.6% in a month. It was indeed such a reason that placed NVIDIA quite well to be a gainer of this temporary halt in trade aggression. The excitement surrounding the announcement of artificial intelligence within an already solid, organic business brought even more buyers into the fold.

Data Center Business Remains the Core Growth Engine

NVIDIA’s stock is being propelled by the essential Data Center business, which is the primary revenue generator for the company. The segment generated $39.1 billion in Q1 of fiscal 2026, an amazing 89% of total sales for the company. Revenue reflects a 73% growth Year on Year from the same quarter last year and a rise of 10% from the previous quarter, in large part due to booming demand for AI applications. 

NVIDIA’s latest GPU platforms, Hopper 200 and Blackwell, are being adopted at tremendous speed by cloud providers and enterprises in the race to set up AI infrastructure. Hyperscalers, which are large cloud establishments, are NVIDIA’s most significant customers and heavily depend on their GPUs to manage increasing AI workloads. 

From the look of things, the latest Blackwell is predicted to give up to 25 times AI inference performance as compared to Hopper 100, cementing even further NVIDIA’s leadership in AI hardware. These products, including Blackwell Ultra and Vera Rubin, promise to bridge the momentum as worldwide demand for AI computing power rises.

Solid Financial Performance Despite Export Challenges

NVIDIA’s financial results have been quite robust despite some challenges, particularly emerging from the China export restrictions. Revenues for the first quarter of fiscal 2026 saw a 69% year-over-year growth while non-GAAP earnings per share increased by 33%. However, on account of the restriction on exports of its H20 chips in China, the company is bracing for a revenue impact of $8 billion in the second quarter and a loss of $2.5 billion in the first quarter. 

Nonetheless, NVIDIA continues to be optimistic about its growth projection. In fact, the company is looking to revenues of $45 billion for the second quarter, which goes a long way to mark a 50% increase when compared to the same quarter from last year.

Revenues are expected to grow at 51% for the fiscal year 2026 by analysts, while they are indicated to grow at 24% for 2027, with earnings growth projected at 40% and 32%, respectively, thereby continuing to affirm NVIDIA’s long-term promise in the face of short-term geopolitical challenges.

Valuation Signals the Need for Caution

No matter how good the fundamentals of NVIDIA are, its present valuation calls for some caution. It is trading at a forward Price Earnings (P/E) ratio of 29.13X, above the industry average of 25.52X. Among semiconductors, NVIDIA scores lower in P/E with Broadcom at 32.91X but higher than AMD and Micron Technology with 23.49X and 9.61X, respectively. Indeed, the lofty valuation suggests that a lot of growth potential from further expansion is already captured in the stock of NVIDIA. Thus, price volatility in the short term should be expected.

Looking Ahead: What Investors Should Consider

This soaring stock comes from easing trade tensions, high demand for AI computing, and very strong financial performance. The company’s strength in AI chip technology presents a significant opportunity for substantial growth. NVIDIA will keep its competition ahead with the anticipated new products and architectures, Blackwell Ultra and Vera Rubin, as demand for AI rapidly accelerates across the world.  Other geopolitical factors and a high valuation pose short-term risks. Still, NVIDIA has a strong outlook for the long term. Investors holding the stock should weigh their risk tolerance against goals: those in it for long-term growth may wish to hold, while more conservative investors can consider taking profits following recent gains.

Final Thoughts

NVIDIA has become an important leader in the fast-growing AI and semiconductor markets. Its recent rise in stock price is backed by strong business performance and better overall economic conditions. Even though the stock is priced high, which means it might go up and down more, NVIDIA’s solid business and new technology make it likely to keep growing. If you follow technology stocks, NVIDIA’s progress in the next few months will be very interesting to watch.