As demand for artificial intelligence infrastructure continues to accelerate across the semiconductor market, NVIDIA remains a focal point for bullish sentiment.
Even after reaching a record high and approaching a $5 trillion market capitalization, NVIDIA's stock may still have room to grow. Analysts believe the chipmaker's valuation could still appear inexpensive against the backdrop of robust AI demand.
NVIDIA is expected to report earnings after the market closes on May 20. This coincides with a visit to China by its CEO, Jensen Huang, who is accompanying former President Donald Trump. NVIDIA's earnings for the 2026 calendar year could potentially exceed $190 billion, a figure that would set a corporate profit record if achieved.
The stock's valuation is a key component of this thesis. NVIDIA's forward 12-month price-to-earnings ratio stands at approximately 24x. This is below its own historical premium and even lower than that of the Philadelphia Semiconductor Index, despite NVIDIA's faster growth rate.
The article also notes that since the start of 2025, NVIDIA's gains have trailed the semiconductor benchmark index by more than 70 percentage points, even as the broader chip rally has expanded into areas like CPUs and memory. Analysts suggest the critical question is whether the current demand for AI computing has peaked or is still in its early stages.
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