3 Reasons to Buy Nvidia in the Fall

There's only one stock with a market cap north of $5 trillion: Nvidia (NASDAQ: NVDA). The leader of the AI revolution remains the most valuable publicly traded company, but interest has cooled this year. Nvidia's 19% rise in 2026 may be comfortably ahead of the market, but its performance has lagged that of smaller AI players and memory stocks riding its coattails.

Can Nvidia resume its role as the market leader for AI investors? With summer handing the seasonal baton to autumn this week, let's go over three reasons this could be a great time to buy shares of Nvidia.

Image source: Getty Images.

1. Growth continues to accelerate

When investors rotate out of sectors -- or in this case, a particular lead horse in an industry -- the logical conclusion is that the party is over. Growth is decelerating, if not outright declining. There are typically other market opportunities with the pedal to the metal, but that's not an accurate knock with Nvidia. Growth has only picked up the pace in recent quarters.

• Q2 FY 2026: 56%
• Q3 FY 2026: 63%
• Q4 FY 2026: 73%
• Q1 FY 2027: 85%
• Q2 FY 2027: 106%

The acceleration isn't sustainable. The country's most valuable company can't continue to more than double its revenue the way it did in last month's fiscal second quarter. Nvidia's own guidance for $108 billion in revenue for the current quarter, which it will report in mid-November, represents an 89% year-over-year increase. Nvidia forecasts have been conservative in the past, but it would take a significant beat to exceed its previous quarter's 106% jump. But even with its foot off the accelerator, it should continue to be another period of stellar revenue growth.

2. China is a tailwind, not a headwind

Nvidia's growth over the past year has happened without sales into the world's second largest economy. The trade war between the U.S. and China has imposed strict restrictions, essentially blocking Nvidia from that major market.

Even in last month's report, Nvidia points out that its guidance doesn't include any data center compute revenue from China in its guidance. In short, it's already on the floor on that front. Things can only get better from here.

CEO Jensen Huang is expected to attend a state dinner at the White House this week, along with President Trump and Chinese President Xi Jinping. The stakes are high, but it's also important to have realistic expectations. Huang, Trump, and Xi also attended a state dinner four months ago, in Beijing, and it didn't culminate in the easing of trade restrictions. If and when China opens up to Nvidia data center chip shipments, it should result in incremental revenue for a company that's already growing at a healthy pace.

3. Nvidia keeps getting cheaper

If you think a stock that has risen nearly 20% this year can't be cheaper, try Nvidia on for size. The only thing growing faster than Nvidia stock is its fundamentals. When this calendar year started, Analysts were expecting it to earn about $6.50 per share in the current fiscal year, which ends in January, and $8.50 per share in the following year.

Several quarters of "beat and raise" performances later, those goalposts have been bumped substantially higher. Wall Street pros are now modeling earnings per share of $9.31 and $15.68 in these two years, respectively. This is a 43% increase for the current fiscal 2027, and an even more ambitious 85% boost for next year. Suddenly, the stock's 20% increase seems to be underselling the rosier reality.

How cheap is Nvidia? Well, you can now buy the stock for just 14 times next year's projected earnings. If recent momentum is an indicator, the multiple would be even lower if we get another year of quarterly guidance boosts.

There are a few things that can go wrong this fall. Growing local backlash for data center build-outs and AI safety concerns can slow, if not derail, the revolution. Nvidia's current margins -- 75% gross and 56% net -- don't seem sustainable. However, when a stock is this cheap, with a potential breakthrough in China and trading at a year-ahead earnings multiple in the low teens, you don't look a gift AI stock in the mouth.

Rick Munarriz has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.