Is it too late to buy Nvidia stock? Evidence is gathered that provides a convincing answer.

There’s no two ways about it: the dawn of the artificial intelligence (AI) revolution in early 2023 was an exception for the chipmaker. Nvidia (NVDA 1.63%). The company pioneered graphics processing units (GPUs) that have become the gold standard for a variety of use cases, providing the computing power needed to support video games, data centers, and even earlier versions of AI.

Generative AI went viral early last year, with Nvidia at the center of what many are calling the next industrial revolution. The results have been stunning: Nvidia stock is up more than 800% since the start of 2023 and sits less than 2% from an all-time high (as of this writing) — but it’s been a bumpy ride. Nvidia shares lost as much as 27% in the four weeks since the start of July, but have bounced back strongly, gaining almost all of that over the past month.

The recent decline has fueled fears that demand for AI may decline, and much of the future growth has already been priced into the stock. That said, there is mounting evidence to answer the question: Is it too late to buy Nvidia stock?

Image source: Getty Images.

Weak demand or the calm before the storm?

What sets generative AI apart from its predecessors is the need not only for massive amounts of data, but also for the corresponding computing power required to analyze the data. When it comes to AI-centric processors, Nvidia is second to none, controlling about 98 percent of the market in 2023, similar to its share in 2022, according to semiconductor analyst firm TechInsights. This dominance put Nvidia in pole position when generative AI burst onto the scene.

The unprecedented demand has fueled triple-digit revenue and profit growth for Nvidia for five straight quarters. So when the company forecast growth of just 79% for the third fiscal quarter of 2025 (which ends at the end of October), some investors saw the writing on the wall. They concluded that demand was falling and headed for the exits, but that move was likely premature—and costly. Evidence is mounting that demand for AI continues unabated.

Super Micro Computercommonly called Supermicro, offered only one piece to the demand puzzle on Monday. In a press release, the company revealed that it has shipped more than 2,000 direct liquid-cooled (DLC) rack systems since June and is currently shipping more than 100,000 GPUs per quarter. Shipments of this magnitude suggest that demand for Nvidia GPUs remains robust.

Nvidia CEO Jensen Huang also offered some commentary on the boots. In an interview late last week, the chief executive said demand for Blackwell — the company’s next-generation AI platform — is “crazy.” He called it the “first wave of AI,” which began with a $1 trillion modernization of existing data centers, retrofitting them with chips capable of processing generative AI. Huang went on to say that the next phase — “the biggest wave of AI” — will involve “companies using AI to be more productive.” These comments suggest that the AI ​​boom has only just begun.

In addition, Nvidia recently expanded its partnership with a global IT consulting company Accenture to help companies “rapidly scale their adoption of AI.” To that end, Accenture launched the new Accenture Nvidia Business Group, which will be staffed by 30,000 business professionals to help clients with “process reinvention, AI-driven simulation and sovereign AI.” Accenture noted in the press release that generative AI generated $3 billion in bookings in the recently ended fiscal year and shows no signs of slowing down.

Finally, the data provided on Wednesday by Taiwan Semiconductor Manufacturingcommonly called TSMC, left no doubt about the continued demand for AI. The company released its September earnings report, which reported quarterly revenue of 759.7 billion New Taiwan dollars ($24.6 billion), up 39 percent year-over-year and beating the Wall Street consensus estimate of 748 NT dollars. Nvidia is one of TSMC’s biggest customers, accounting for about 11 percent of sales last year. This suggests that AI-related demand remains strong for Nvidia as well.

The evidence is clear

Nvidia investors have been on a non-stop ride since the beginning of last year. The company’s fiscal 2025 second quarter results help illustrate its success. For the second quarter of 2025 (ended July 28), Nvidia reported record revenue that rose 122% year-over-year to $30 billion, fueled by record data center revenue of $26.3 billion of dollars, up 154%. Profits also rose as diluted earnings per share (EPS) of $0.67 rose 168%.

Nvidia won’t report fiscal third-quarter results until late November, so we won’t know for sure until then. However, if the latest developments are any indication, Nvidia should have another strong demo in the works.

The company’s forecast calls for revenue of $32.5 billion, which would represent 79% year-over-year growth, with a corresponding increase in profitability. While that’s slower than triple-digit growth investors are used to, it’s still remarkable.

Then there’s the matter of Nvidia’s valuation. At 62 times earnings, it certainly looks expensive – at least at first glance. However, Wall Street is forecasting EPS of $4.02 for Nvidia’s fiscal year that starts in January. This results in a forward price-to-earnings (P/E) ratio of 33, which is only slightly higher than the multiple of 30 for S&P 500.

To me, the evidence is clear: Nvidia stock is still a buy.