Buy, Sell or Hold: NVIDIA Stock At $195

Nvidia (NASDAQ:NVDA) remains the unrivaled leader in artificial intelligence (AI) chip technology, continuing to reshape the tech landscape with its graphics processing units (GPUs) driving innovations from immersive gaming to the neural networks powering ChatGPT. 

Shares of NVDA stock currently trade just below $176 per share, down less than 5% from its August intraday all-time high of $184.48 but reflecting a robust 31% year-to-date gain amid the AI boom. With a consensus “Moderate Buy” from 45 analysts and an average 12-month price target of $208, a 10% gain to $195 per share seemingly still gives room for additional profits, but is that just being greedy? 

As that would be a new high point, investors should ask if the AI chipmaker can keep living up to the high expectations that would be baked into its stock, or would it be time to take some profits off the table?

AI Dominance Fuels Unrelenting Growth

Nvidia isn’t merely capitalizing on the AI revolution — it’s defining it. In its second-quarter earnings report, the chipmaker reported a staggering $46.7 billion in revenue, up 56% year-over-year and 6% sequentially, propelled by its Data Center segment generating $41.1 billion for 87% of total sales. 

Demand for Hopper and Blackwell GPUs, critical for AI workloads, drove this surge, with Blackwell revenue alone climbing 17% quarter-over-quarter. CEO Jensen Huang described the momentum as “unprecedented,” reflecting the market’s voracious appetite for Nvidia’s technology.

The company’s dominance is formidable, commanding a 92% share of the discrete GPU market in Q1, according to Jon Peddie Research, and over 80% in AI accelerators. Its CUDA software platform creates a powerful moat, locking developers into Nvidia’s ecosystem. 

With $57 billion in cash against $8.5 billion in debt, NVIDIA’s financial strength supports aggressive R&D, paving the way for next-generation Rubin GPUs and AI factories projected to attract $3 trillion to $4 trillion in investment by 2030. Guidance for Q3 anticipates $54 billion in sales, signaling sustained growth.

Navigating Valuation and Market Risks

Yet at $195, Nvidia would have a forward P/E of 32x (based on 2025 earnings estimates of $3.55 per share,) exceeding the Nasdaq’s 25x average and reflecting a premium that assumes continued AI-driven growth. 

However, Nvidia is not without challenges. U.S. export restrictions on H20 chips to China reduced Q1 revenue by $8 billion, and though it regained an export license (in exchange for giving up 15% of advanced chip sales to the government), Beijing essentially just slammed the door shut and ordered TikTok parent ByteDance and Alibaba (NYSE:BABA) to cancel outstanding chip orders over supposed security concerns.

Broader challenges include potential AI hype fatigue if generative tools underdeliver on profitability, or a recession curbs Big Tech’s capital spending. 

Despite recent volatility — leading to the 5% pullback from August’s highs — analysts remain optimistic, with 40 rating NVDA a Buy or better, 4 Holds, and 1 outlier Sell call. Their price targets also range from  a high of $250 to HSBC‘s (NYSE:HSBC) low of $120 per share.

Still Making Strategic Maneuvers

While competitors like Advanced Micro Devices (NASDAQ:AMD) and Broadcom (NASDAQ:AVGO) might challenge Nvidia, they trail significantly. AMD, holds just 8% of the GPU market share Although it projects $5 billion in 2025 AI sales with its Instinct chips, that’s just a fraction of Nvidia’s $120 billion run rate. Broadcom is even further behind, though it has a much broader remit  and controls around 70% of the custom AI chip market, serving hyperscale clients. That’s a different segment than the general purpose AI chip market Nvidia dominates.

Yet, Nvidia’s $5 billion investment in Intel (NASDAQ:INTC) that it just announced yesterday, potentially strengthens its ecosystem while mitigating competitive threats. It should be first in line for Intel’s foundry output, gaining access to Intel’s next-gen capabilities, potentially powering its AI GPUs and new joint chip designs. 

CUDA’s dominance also ensures NVIDIA’s lead remains secure for the foreseeable future.

Key Takeaway

At $195 per share, Nvidia merits a bullish outlook. Its unmatched AI leadership and financial strength justify a premium valuation, but near-term risks from regaining access to China’s market to high expectations baked into its stock suggest prudence. 

Investors with a long-term horizon should consider accumulating shares on any dips, with an eye on Wall Street’s $208 per share target.

Those seeking more stability, however, might want to take some profits off the table now. Nvidia remains the cornerstone of the AI revolution, poised to capitalize on a multi-trillion-dollar opportunity over the next decade, but not necessarily at any price.