Whenever I look at Nvidia (NASDAQ: NVDA) shares, I ask myself the same question. Is this as good as it gets?
As a UK-focused investor, I only started to pay serious attention to the Nasdaq-listed tech star at the start of 2024, when it traded at around $50. When it hit $100 that summer, I thought I’d missed my chance.
As a contrarian investor, I’m always worried about jumping on momentum stocks just as the party stops. I feel such a chump for rocking up late. But a well-balanced SIPP cannot grow through value stocks alone, so I finally bought Nvidia in January last year, at $117 per share.
Can this stock go higher still?
At today’s price of $212 per share, I’m up 55%. I’m happy enough but I’ve also earned a hard lesson and now target US tech stocks at an earlier stage. But I’m still asking the same question about Nvidia. Is this as good as it gets?
So what’s the answer? To nobody’s surprise, Nvidia looks a little expensive with a trailing price-to-earnings ratio of 43.4. However, the forward P/E is a lot more reasonable at around 22.
Given that the Nvidia share price is up exactly 1,000% in the last five years, that’s remarkably modest. But then Nvidia’s earnings have been rocketing rapidly too. Check out recent full-year net revenue figures:
- 2026 – $215.94bn
- 2025 – £130.50bn
- 2024 – $60.92bn
- 2023 – $26.97bn
- 2022 – $26.91bn
Latest results (12 May) showed first-quarter revenue up a bumper 85% year on year to $81.6bn, beating expectations of $78.9bn. That’s forecast to hit $91bn in Q2. Unlike some companies in the AI space, Nvidia is making big profits today. Q1 underlying operating profit landed at $53.8bn, up 147%.
Free cash flow increased 85% to $48.6bn. Nvidia is using this to reward investors, increasing the dividend from 1 US cent to 25 cents, and adding $80bn to its ongoing share buyback programme. Nobody buys it for the dividends today. That might change.
Those growth figures are particularly astonishing given how big an operation it now is, with a $5trn market cap. Can it continue to plough on?
Is the tech hero still worth considering?
AI hyperscalers like Google, Microsoft, and Meta are ramping up their AI infrastructure budgets, so arguably Nvidia can grow. However, it will still be vulnerable if the AI bubble bursts, or even deflates a little. Expectations are dizzyingly high with markets pricing in breakneck growth. If sales continue to rise but the pace of growth slows, even slightly, Nvidia will be punished.
Rivals aren’t sitting still, with semiconductor competitors and cloud providers powering up. The blockbuster SpaceX IPO may light another rocket under US tech in the short run. But it might just signal the market top.
So is this as good as it gets? In a way, yes. Given Nvidia’s staggering performance and swaggering size, the biggest gains are behind us. But I think it’s still worth considering for investors who understand the risks as well as the rewards.
Should you invest £5,000 in Nvidia right now?
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Harvey Jones owns shares in Nvidia.
