Essential Highlights

Nvidia shares have declined over the past month even as earnings estimates continue rising.
Obstacles are present but Nvidia has prospered despite unwarranted concerns previously.
The stock has risen 380 percent over three years yet trades near lows in its forward earnings multiple.

The artificial intelligence movement has shifted course in recent weeks. Nvidia the firm that ignited the trend has slipped this summer after reaching a peak in May. For the first time in months Nvidia no longer leads in market capitalization.

Apple gains this week paired with Nvidia ten-week drop leave the Cupertino standout alone atop the list of highest-valued firms by market cap. The exchange of positions creates a chance. Ark Invest co-founder and CEO Cathie Wood has purchased Nvidia shares across all five of Ark largest exchange-traded funds. Let us review whether you should consider the same step.

Image source: Getty Images.

You cannot spell GPU without P-U

Nvidia shares have fallen 17 percent from the mid-May record high. Some smaller AI names show steeper drops but this move stands out. Nvidia operations did not crest when its price chart did. A week later the company posted an 85 percent year-over-year revenue jump for its fiscal first quarter that closed in late April.

Revenue has sped up across three straight reports and the base was already strong. Nvidia quarterly sales gains stood at 55 percent 63 percent and 73 percent ahead of the late-May 85 percent surge. This marks the firm strongest top-line growth in a year and a half.

The market may evolve yet Nvidia currently supplies the leading high-performance GPUs and AI accelerators that data centers require for hyperscalers and other enterprise clients to build AI tools. Nvidia data center revenue climbed 92 percent in its fiscal first quarter and made up 92 percent of overall sales.

If Nvidia top-line results impress the path to the bottom line looks even better. Adjusted operating profit and earnings more than doubled for the quarter.

A strong value case for a powerful growth name

Nvidia did not unsettle investors by lowering its outlook or tightening spending two months ago. Projections have climbed instead. Nvidia also raised its dividend twenty-five times and approved 80 billion dollars in share repurchases.

Wood views Nvidia as undervalued at present and the company appears to agree. Valuation points become clearer when a stock falls while fundamentals improve. Nvidia matches that pattern. At Tuesday close the shares trade at 22 times this fiscal year expected earnings and just 15 times next year target.

Beyond cyclical memory and storage names few firms expanding at an 85 percent pace carry a year-ahead multiple in the mid-teens. Nvidia still faces issues including supply limits unease over circular financing arrangements and ongoing China trade limits. These headwinds are acknowledged yet supportive forces remain active.

Nvidia shares looked inexpensive earlier and appear even more so now. Not every Wood trade aligns with my view but this purchase stands out as reasonable.

Should you purchase Nvidia shares at this point?

Before buying Nvidia consider the following points. An investment research team has named ten stocks they view as top choices for investors now and Nvidia did not appear on that list. Those ten selections could deliver strong gains ahead.

Note that when certain past recommendations were made an investment of one thousand dollars grew substantially over time. The service overall average return reaches 899 percent far ahead of the 206 percent for the S and P 500. Review the latest top ten list through the service and join a community of individual investors.

Stock returns noted as of late July 2026. Rick Munarriz holds positions in Apple and Nvidia. The Motley Fool holds positions in and recommends Apple and Nvidia. The Motley Fool maintains a disclosure policy.

The views and opinions stated here belong to the author and may not reflect those of Nasdaq Inc.