Should You Buy Nvidia Stock Right Now? A Compelling Answer Is Hiding in Plain Sight.

Ask investors about the most influential stock of the past several years, and many would respond with Nvidia (NASDAQ: NVDA). The company's state-of-the-art processors have taken artificial intelligence (AI) to the next level, propelling its revenue and profits into the stratosphere. Consider this: Since the AI revolution kicked off in earnest in early 2023, Nvidia's revenue has surged 1,250%, driving its net income up over 4,000%. The company's incredible financial results have driven its share price up 1,280% -- and many experts believe that there's more upside ahead.

However, the specter of uncertainty regarding AI adoption, rising competition, and concerns about valuations in general have weighed on AI stocks, and Nvidia is no different. The stock is currently down 14% from its recent highs and trailing both the S&P 500 and the Nasdaq Composite (as I write this) in 2026.

With that as a backdrop, should investors buy Nvidia stock? A review of the available evidence provides a compelling answer.

Image source: Getty IMages.

Show me the money

The company's financial results provide the first indication regarding Nvidia's prospects. For its fiscal 2027 first quarter (ended April 26), the company generated record revenue that surged 85% year over year and 20% quarter over quarter to $81.6 billion. Nvidia's gross profit margin remains near a record high at 74.9%. This drove adjusted earnings per share (EPS) that soared 140% to $1.87. This marked the 14 consecutive quarter of sequential revenue growth.

If that wasn't enough, management is guiding for Q2 revenue of $91 billion, which would represent year-over-year growth of 95%.

Its financial results suggest Nvidia is a buy.

The future looks bright

Beyond the coming quarter, the future looks bright for Nvidia. Don't take my word for it. CEO Jensen Huang has released an astonishing forecast for this year and next:

We have $500 billion dollars' worth of visibility. And at this point, at this point, with another 21 more months to go to the end of (calendar) 2027, we already have high confidence, high confidence visibility of $1 trillion plus of Blackwell and Rubin, not anything else, just Blackwell and Rubin.

If Huang's forecast for Nvidia's AI-centric Blackwell and Rubin platforms is even close to reality -- and we have no reason to believe otherwise -- it suggests that the company's momentous growth is poised to continue through at least the end of 2027, and likely much longer.

The company's future prospects also suggest the stock is a buy.

Show me the money (part 2)

As highlighted above, Nvidia's performance over the past several years has been nothing short of spectacular. Gains of that magnitude are rare, but shareholders are bracing for yet another windfall from Nvidia. The chipmaker recently increased its quarterly dividend 25-fold, from $0.01 to $0.25 per share, payable on June 26 to shareholders of record as of June 4. Its dividend yield is currently 0.5%, and with a payout ratio of about 10%, there's still plenty more where that came from.

In fact, Huang recently made a stunning pronouncement, saying the company plans to return "50% or more of free cash flow to our shareholders this year, next year, and beyond. "

That signals Nvidia's plans to return substantial capital to shareholders through dividends and share buybacks -- yet another positive signal.

Wall Street's unequivocal endorsement

Wall Street analysts are known for their diverse opinions, so when they agree on something, it's noteworthy. To wit, of the 62 analysts who issued an opinion in June, 95% rate Nvidia a buy or strong buy, and none recommend selling. Furthermore, the average price target on the stock is $299, suggesting 48% upside (as I write this).

Baird analyst Tristan Gerra is much more bullish than her Wall Street colleagues, with a price target of $500 -- suggesting potential upside of 147%. The analyst notes that Nvidia is "gaining market share in inferencing and at hyperscalers," while suggesting that sales of Vera Rubin chips could outperform those of the highly successful Blackwell processor. He also sees Nvidia's entry into the CPU market as a $200 billion opportunity that isn't factored into Wall Street's current models.

Wall Street seems to concur that Nvidia has further to run.

Is the stock a buy?

The final piece of evidence is its valuation. Nvidia stock is currently selling for 31 times earnings and 23 times forward earnings. That's an incredibly compelling valuation for a company executing at such a high level and positioned at the forefront of the AI revolution.

Add to that the company's accelerating sales, robust forecast, increasing capital returns, and a bullish endorsement from Wall Street, and the evidence is clear.

Nvidia stock is a buy.

Danny Vena, CPA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.