Nvidia’s meteoric rise continues to dominate Wall Street headlines, with the chipmaker’s stock (NVDA) recently brushing up against all-time highs. But as the AI gold rush accelerates, some analysts warn that the company’s sky-high valuation could make it vulnerable to even the slightest stumble.
Nvidia’s Latest Earnings: Record Revenue, Soaring Demand
Nvidia’s most recent financial results for the second quarter of fiscal 2026 stunned even bullish investors. The company reported
revenue of $46.7 billion, up
6% from the previous quarter and a staggering
56% year-over-year jump. The real star? Nvidia’s Blackwell Data Center segment, which saw revenue surge
17% sequentially as demand for AI infrastructure reached fever pitch.
CEO Jensen Huang didn’t mince words:
“Blackwell is the AI platform the world has been waiting for, delivering an exceptional generational leap… The AI race is on, and Blackwell is the platform at its center.”Nvidia’s gross margins remain eye-popping, with non-GAAP margins at
72.7%. Earnings per share hit
$1.05, up from
$0.68 a year ago, and the company announced its next quarterly dividend of
$0.01 per share, payable October 2, 2025.
NVDA Stock: Near Record Highs, But Bubble Fears Emerge
NVDA shares have been on a tear, closing at
$186.26 on October 24, 2025—just shy of their all-time high of
$183.16 set in August. The stock is up
39% over the past year and
34% year-to-date, far outpacing the S&P 500’s gains.
But with NVDA now trading at nearly
42 times forward earnings, some on Wall Street are sounding the alarm. Louis Navellier of Navellier & Associates cautions that the downside risk of an earnings miss is “probably greater than the upside of an even stronger outlook that is already priced into the world’s most valuable stock.”
Recent months have seen increased volatility, with the stock still recovering from the “DeepSeek revelation” in January and new U.S. tariffs on Chinese tech announced in April.
What’s Fueling the Frenzy?
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AI Infrastructure Boom: Nvidia’s chips are the backbone of generative AI, powering everything from ChatGPT to self-driving cars.
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Blackwell Platform: The new Blackwell architecture is driving a generational leap in AI performance, with demand outstripping supply.
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Global Expansion: Despite U.S. export restrictions to China, Nvidia found new buyers for its H20 chips, releasing
$180 million in previously reserved inventory.
Is a Correction Coming?
While Nvidia’s fundamentals remain strong, some analysts warn that the stock’s valuation leaves little room for error. Short interest has ticked up
4.27% in the past month, suggesting some investors are betting on a pullback.
Still, sentiment remains broadly positive, with news coverage and analyst forecasts overwhelmingly bullish. MarketBeat’s news sentiment score for Nvidia is 1.09, well above the sector average.
Key Takeaways for Investors
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Nvidia is riding the AI wave like no other company, but expectations are sky-high.-
Any earnings miss or regulatory shock could trigger a sharp correction.-
Long-term bulls see Nvidia as the backbone of the AI revolution, with some predicting the stock could reach $1,300–$2,125 within five years.For now, Nvidia remains the undisputed king of AI chips—but as history shows, even kings can stumble when the stakes are this high.
Sources
1. NVIDIA Announces Financial Results for Second Quarter Fiscal 2026
2. Nvidia Earnings: Updates and Commentary August 2025 - Kiplinger
3. Top $NVDA Levels To Watch for October 27th, 2025 - YouTube
4. NVIDIA (NVDA) Stock Price, News & Analysis - MarketBeat
5. Nvidia Corporation (NVDA) Stock News Today - TipRanks.com
6. Prediction: Nvidia Stock Price Will Skyrocket to This Range in 5 Years
