Nvidia shares rallied (again) today, but are still 10% off their all-time high. Is the stock still a buy?

Nvidia (NVDA 2.98%) has been on an epic roller coaster ride for the past few months. After taking a beating over the summer and losing more than a quarter of its value, the stock has staged an impressive recovery and is now about 10% off its all-time high (as of this writing).

Comments made by CEO Jensen Huang helped boost it today as the stock gained 3.1% as of 2pm ET.

Despite the volatility, investors should keep an eye on the prize.

Taking a step back

Nvidia has become a battleground in recent months, and both sides have valid points. Management’s latest forecast calls for sales growth of 80% for the current quarter. While that’s a deceleration from the triple-digit growth that grabbed headlines over the past year, it’s still impressive.

Bears also point to the company’s gross margin of 75.1% in the second fiscal quarter of 2025 (ended July 28), down from 78.4% in Q1. Given that it was a record-breaking performance, it’s best viewed in that context.

Management noted that gross margin declined sequentially due to product mix and inventory for next-generation Blackwell AI processors, which are scheduled to begin shipping in Q4. Historically, new products have had a higher margin profile, which could result in higher gross margins. Furthermore, in an interview yesterday, CEO Jensen Huang noted that demand for Blackwell processors has been “insane.”

Finally, the bears point to Nvidia’s high valuation, and at 58 times earnings, it’s easy to see their point. However, analysts’ consensus estimates call for Nvidia to generate earnings per share of $4.02 in fiscal 2026 (which starts in January). This works out to less than 30 times next year’s expected earnings, which is comparable to a price-to-earnings (P/E) ratio of 30 for S&P 500.

We are still at the beginning of the adoption of generative AI. Some experts estimate the market will be worth $1.3 trillion by 2032, according to Bloomberg Intelligence. As a company at the forefront of the AI ​​revolution, Nvidia still has many advantages ahead. Therefore, the stock is still a buy.