To The Moon

$NVIDIA(NVDA)$ 's stock has indeed experienced an unprecedented surge, making it one of the most valuable companies in the world.

While a forward Price-to-Earnings (P/E) ratio of 45x might appear expensive by traditional metrics, but demand for sovereign AI and a booming $250 billion robotics market support its long-term growth potential.

Many analysts and investors believe the boom might not end soon due to a confluence of unique factors. In this article I would like to discuss how these confluence of unique factors could support Nvidia stock boom continual.

Dominance in the AI Gold Rush

Unparalleled Market Share: Nvidia holds a near-monopoly in the high-end AI chip market, particularly for training large language models (LLMs) and other complex AI applications. Estimates suggest its market share in data center GPUs is as high as 92% in Q1 2025, and it commands over 80% of the overall discrete desktop GPU market. This dominance provides immense pricing power and strong profit margins (gross margin around 72% for Q2 FY 2026 outlook).

CUDA Ecosystem: Nvidia's proprietary CUDA (Compute Unified Device Architecture) platform is a critical differentiator. It's a comprehensive software stack that allows developers to efficiently program Nvidia's GPUs for parallel computing tasks, especially AI workloads. This creates a powerful "moat" around its hardware, making it difficult for competitors to easily poach customers who have invested heavily in building their AI applications on CUDA.

Continuous Innovation: Nvidia is not resting on its laurels. It's rapidly introducing new architectures like Blackwell (now in full production) and already announcing its successor, Vera Rubin. This continuous innovation ensures it stays ahead of the curve in a fast-evolving AI landscape.

AI Infrastructure Build-Out: The demand for AI infrastructure is exploding. Cloud service providers (hyperscalers like AWS, $Microsoft(MSFT)$ Azure, $Alphabet(GOOGL)$ Google Cloud) are rapidly deploying Nvidia's AI supercomputers, with one analyst noting they are ramping close to 1,000 racks every week. Beyond cloud, companies and even nations are building their own "sovereign AI" infrastructure, which fuels demand for Nvidia's chips. Jensen Huang, Nvidia's CEO, believes AI data center spending could top $1 trillion per year by 2028.

Diversified Growth Catalysts Beyond Data Centers

While data centers are the primary driver (accounting for nearly 89% of revenue in Q1 FY 2026), Nvidia has other significant growth avenues:

AI PC Revolution: The emergence of AI-capable PCs, which require powerful GPUs to run AI applications locally, presents a massive new market. Analysts project shipments of AI-capable PCs to grow at an annualized rate of 42% through 2028. Nvidia, as the leader in PC GPUs, is well-positioned to capitalize on this.

Automotive and Robotics: Nvidia's technology is crucial for autonomous driving and robotics. Its automotive revenue is expected to grow significantly, with CEO Jensen Huang forecasting a potential triple in fiscal 2026 to $5 billion. This segment leverages AI for sensing, perception, and decision-making in vehicles and robots.

Enterprise AI and Omniverse: Nvidia's AI Enterprise software suite helps companies develop, deploy, and manage AI. Its Omniverse platform, for 3D collaboration and real-time simulation, is gaining traction in industrial digitalization with integrations from major software providers. This signifies a move beyond just selling hardware to providing comprehensive AI solutions.

Strategic Investments: Nvidia is actively investing in over 80 AI startups, including early support for OpenAI and xAI. This strategy not only provides potential financial returns but also fosters the broader AI ecosystem, further cementing Nvidia's competitive edge and ensuring future demand for its products.

Exceptional Financial Performance and Future Outlook

Phenomenal Revenue Growth: Nvidia's revenue has consistently shown explosive growth. For fiscal year 2025, revenue was up 114% year-over-year to $130.5 billion. Q1 FY 2026 revenue was $44.1 billion, up 69% from a year ago. While this triple-digit growth might moderate, analysts still expect very strong growth, with revenue projected around $200 billion for FY 2026 (a 53% increase).

Strong Earnings Growth: EPS jumped 130% year-on-year in FY 2025. For the current fiscal year (FY2026), analysts expect EPS to increase by 43% to around $4.30 per share, with double-digit growth projected for years to come.

High Profitability: Nvidia boasts impressive profit margins, demonstrating its efficient operations and strong pricing power.

Forward-Looking Valuation: While 45x trailing earnings might seem high, investors are valuing Nvidia based on its future growth potential. The forward P/E, considering analyst forecasts for significant earnings growth, becomes more palatable (e.g., a forward P/E of around 33.5x based on FY2026 EPS forecasts). Some analysts even classify Nvidia as a "value stock" based on its Price-to-Earnings-to-Growth (PEG) ratio being under one, suggesting it's cheaper than the overall S&P 500 when factoring in its growth rate.

Limited Competition (for now)

While competitors like $Advanced Micro Devices(AMD)$ and $Intel(INTC)$ are trying to catch up in the AI chip space, Nvidia's lead in performance, its robust software ecosystem (CUDA), and its established relationships with hyperscalers create a formidable barrier to entry. It will take significant time and investment for rivals to replicate Nvidia's comprehensive offering.

Nvidia’s stock boom might still have legs—even at a seemingly steep 45x earnings—because its valuation is being redefined by unprecedented AI-driven demand and exceptional earnings momentum.

Why the Rally Might Continue

Explosive Revenue Growth: Nvidia reported 69% year-over-year revenue growth in its latest quarter, smashing Wall Street expectations. That kind of acceleration justifies a premium multiple—especially when most of Big Tech is growing at a fraction of that pace.

AI Infrastructure Dominance: Nvidia isn’t just riding the AI wave—it’s building the surfboard. Its chips power the data centers of Microsoft, Meta, Google, and Amazon, which together account for over 40% of its revenue. As the AI arms race intensifies, so does demand for Nvidia’s hardware and software stack.

Valuation in Context: While 45x earnings sounds rich, Nvidia’s PEG ratio is under 1, meaning its price is still reasonable relative to its growth. In fact, it trades at 31.5x forward earnings, below its 10-year average and not far from the Nasdaq 100’s multiple.

Under-Ownership by Institutions: Despite its size, Nvidia is still owned by only 74% of long-only funds—compared to 91% for Microsoft. That leaves room for more institutional buying.

Strategic Tailwinds: The rollback of U.S. export restrictions and Nvidia’s push into sovereign AI partnerships have opened up new markets and revenue streams.

So while valuation concerns are valid, they may be outweighed by Nvidia’s rare combination of scale, growth, and strategic positioning.

So for a pragmatic investor like myself, it is less about the P/E in isolation and more about whether the company is still outpacing expectations.

Now I shall share technical analysis on how Nvidia is managing its resistance level and also whether the bulls are having strength to continue to build an uptrend, or even an uptrend continual.

Technical Analysis – Resistance and EMA Weekly Timeframe

Nvidia has a brand-new all-time high and they finally did that, and we were talking about the resistance range around the $143.44 level. The bulls were hugging it but it seems like they were hugging it very closely and the bias was bullish.

if we looked at the weekly time frames, we can see that it is forming a very nice and strong momentum, and we can see a short gap up, but we did not know whether or not the bulls were going to break this uptrend.

The chart below indicate that the bulls will make a second attempt well, but they might chose to hug the resistance level or we might see another level open up if the trade condition permits.

There are two trade conditions for back testing the resistance for a long into the target or we could do a breakout retest and run as well.

How I Might Trade Nvidia (NVDA) For A Swing Trade

I will see if I can get any trade opportunity, which could be anything that is above 142 level, we understand that investors are probably looking for a retest, so we could do a long opportunity.

Then we can place the sell target at around 160-170 level, so the bulls are looking pretty good for an uptrend expansion right there using weekly timeframe.

I foresee that the bulls will make a second attempt for a weekly uptrend continuation which is the first one that might drive them to hug the resistance level, if they were to be successful in their second attempt, we could see the bulls make a smash right through if the trade condition align.

But based on previous pattern we might see a slowing down, I would not want that to happen as I would rather NVDA attempt a new highs around the 160s then the 170s.

This might be one or two situations. I think to start a swing trade now, might be a potential, but that would be the start of multiple swing trades into probably next week.

Summary

If you have been following Nvidia share price, we would understand that investors are paying a premium for Nvidia because they believe it is at the heart of a transformative technological revolution (AI) and possesses a unique combination of market dominance, technological leadership, and diversified growth opportunities that will allow it to continue delivering exceptional financial results for the foreseeable future.

The "expensive" valuation reflects the market's conviction in its long-term growth trajectory and its pivotal role in shaping the AI era.

Appreciate if you could share your thoughts in the comment section whether you think Nvidia stock would continue to make new highs despite concern of being expensive.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.