Why Nvidia Stock Looks Like a Bargain Right Now
Nvidia's shares have stalled, while its business hasn't. Here's the case for buying the dip.
Nvidia (NVDA) stock has experienced a notable decline lately, with shares trading flat so far in 2026 and falling 22% from its all-time high. However, this appears to present a compelling investment opportunity for those willing to take a closer look. Despite a recent downturn, Nvidia reported remarkable revenue growth during its most recent quarter, with fiscal third-quarter earnings expected to surpass management's aggressive forecasts.
The company generated $96.2 billion in revenue in its fiscal second quarter, marking a 106% increase from the previous year. Data center revenue alone reached $89 billion, representing a 117% year-over-year growth. These impressive figures suggest that Nvidia's growth story remains robust despite the current stock price decline.
Management's expectations for the third quarter are even more impressive, with revenue forecasted to reach approximately $108 billion, marking another 12% sequential increase. Additionally, Nvidia anticipates maintaining a non-GAAP gross margin of 74%, indicating its ability to sustain exceptional pricing power despite its large sales volume.
Recent demand for Nvidia's AI accelerators is strong, as evident by SK Hynix's indication that advanced memory capacity is effectively sold out for years. This demand is further supported by Nvidia's Vera Rubin platform, which is already in full production and being deployed by major cloud providers and AI infrastructure companies.
The latest weakness in Nvidia stock could be attributed to concerns about the high cost of AI infrastructure and the potential impact of political opposition on data center construction. However, it's important to note that delays in building data centers do not necessarily equate to a collapse in demand for AI computing, a sector Nvidia has already proven capable of servicing.
As investors consider Nvidia stock, it's essential to recognize that a 24% decline doesn't automatically make any stock cheap. Nevertheless, with Nvidia demonstrating the ability to sell increasingly sophisticated chips while maintaining exceptional margins, there are strong reasons to believe that the business is stronger than the stock's recent performance suggests.
The upcoming earnings report will provide further insight into whether demand remains robust. While there are risks associated with customer spending cuts, competing chips, and restrictions on AI infrastructure development, Nvidia's track record suggests that investors may be overlooking a truly compelling opportunity.
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