Nvidia (NVDA) shares hit a seven-month low on Monday and were below a key support level of $170 a share to start the week. It was looking bleak for the AI behemoth but after a late week surge the stock is back above $176 a share. The question is, has the stock bottomed as good news surrounds the company?

Nvidia remains the undisputed bellwether of the artificial intelligence trade, but as its market capitalization pushes deeper into the multi trillion dollar range, the debate around NVDA stock is no longer about whether the company is executing, it is about how much perfection is already priced in. The company’s most recent earnings report underscores both sides of that equation.

Last Quarter, Nvidia reported fiscal 4Q 2026 results that again exceeded Wall Street expectations, delivering record revenue of $68.1 billion, up 73% year over year, and adjusted EPS of $1.62, up 82% from a year earlier. The company’s Data Center segment generated $62.3 billion, representing 75% year-over-year growth, as hyperscalers and enterprises continued to invest aggressively in AI infrastructure. Free cash flow for the quarter came in at $34.9 billion, highlighting the company’s ability to convert revenue growth into real cash generation. All the CapEx spending from the tech sector has benefitted Nvidia greatly.

Bulls point to Nvidia’s evolution from a chip supplier into a full stack AI infrastructure provider. Networking revenue surged more than 260% year over year in 4Q, reflecting the importance of NVLink and high speed interconnects in large scale AI clusters. This deeper integration makes Nvidia harder to displace and raises switching costs for customers.

Valuation has come in from elevated levels with the stock now trading with a forward P/E of just 21x, indicating that the market is pricing the stock based on significant expected earnings growth, with the valuation becoming more attractive relative to its historical averages. This is just above the forward P/E of the S&P 500, which doesn’t have close to the growth that Nvidia does.

While fundamentals remain extraordinary, the bear case centers on expectations, concentration risk, and macro sensitivity. The valuation level assumes continued hypergrowth well into the future. Any sign of slowing AI spending or even a moderation rather than a decline could compress multiples quickly. Management itself has acknowledged that capacity constraints and supply chain complexity remain ongoing challenges, particularly as the company ramps newer architectures, including Blackwell and Rubin Chips.

How long will the demand remain for Nvidia, and is there a peak spend on the horizon? Despite blowout earnings, NVDA shares have at times struggled in 2026 amid broader risk off sentiment, elevated volatility, and geopolitical uncertainty. Despite the great fundamentals and earnings, even Nvidia is not immune from macro and market risks.

Nvidia’s latest earnings confirm that the company is executing at an almost unprecedented level. However, the stock now represents not just confidence in AI, but confidence in near flawless execution looking forward. It’s the biggest component in the S&P 500 and the Nasdaq-100 (NDX).

For long term investors, NVDA may be a quality way to express conviction in the AI trade. Although the stock is down 5% this year and off 16% from its all-time high, you have to look at a longer term view of the stock as to why we have seen consolidation over the last several months. Nvidia shares are up over 570% over the last three years, so it has had a spectacular run. The question for investors is: have the shares hit a near-term bottom and can the stock get back to its recent resistance level around $195?

Tune in live from 8 a.m. to 5 p.m. ET, or anytime, anywhere, on‑demand.

Or stream it via thinkorswim® and thinkorswim Mobile, available through our broker-dealer affiliate, Charles Schwab & Co., Inc

Please do not reply to this email. Replies are not delivered to Schwab Network. For inquiries or comments, please email [email protected].

See how your information is protected with our privacy statement.  

This material is intended for informational purposes only and should not be considered a personalized recommendation or investment advice. Investors should review investment strategies for their own particular situations before making any decisions.

Schwab Network is brought to you by Charles Schwab Media Productions Company (“CSMPC”). CSMPC is a subsidiary of The Charles Schwab Corporation and is not a financial advisor, registered investment advisor, broker-dealer, or futures commission merchant.

Charles Schwab Media Productions Company and all third parties mentioned are separate and unaffiliated, and are not responsible for one another's policies, services or opinions.

Data contained herein is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. All events and times listed are subject to change without notice.