NVIDIA Corporation NVDA has seen its stock tumble nearly 19.6% year to date (YTD), rattled by a broader market sell-off. Investor sentiment has soured amid escalating trade war concerns, with tariffs raising fears of increased costs and a possible global economic slowdown.

NVDA YTD Price Return Performance

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While the pullback has hit tech stocks particularly hard, including industry giants like Advanced Micro Devices AMD, Broadcom AVGO and Marvell Technology MRVL, the long-term outlook for NVDA remains undeniably strong. Shares of Advanced Micro Devices, Broadcom and Marvell Technology are down 14.9%, 28% and 44.5%, respectively, YTD.

Rather than being a red flag, the recent pullback in NVDA stock presents a rare opportunity to buy into one of the most dominant forces in the semiconductor industry at a meaningful discount.

NVIDIA’s Growth Engine Remains Unstoppable

Despite the recent market turbulence, NVIDIA’s core business fundamentals remain stronger than ever. The company is an undisputed leader in AI chips, data centers, gaming and autonomous vehicles. Its products are at the center of the ongoing AI revolution, driving demand from hyperscalers, enterprises and cutting-edge startups alike.

The data center segment continues to be a powerhouse for NVIDIA. AI-driven workloads, cloud computing expansion and increasing enterprise adoption of AI models have turned NVIDIA’s high-performance chips into a necessity rather than a luxury. With businesses aggressively investing in AI infrastructure, NVIDIA remains positioned at the heart of this technological transformation.

Financially, NVIDIA is firing on all cylinders. In the fourth quarter of fiscal 2025, revenues surged 78% year over year, while non-GAAP EPS climbed 71%. The company’s first-quarter fiscal 2026 guidance of $43 billion in revenues represents a staggering increase from $26.04 billion in the prior-year quarter.

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Analysts expect NVIDIA to maintain this momentum, forecasting fiscal 2026 and 2027 revenue growth of 52% and 23%, respectively. With earnings projected to rise 47% in fiscal 2026 and 24% in fiscal 2027, NVIDIA’s long-term investment case remains intact. The stock surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 7.9%.

AI Boom: A Multi-Year Tailwind for NVIDIA

NVIDIA’s latest earnings call underscored the company’s continued AI dominance. CEO Jensen Huang highlighted the increasing demand for next-generation AI models that require unprecedented computational power. The company’s Blackwell architecture, capable of delivering up to 25 times the token throughput of its predecessor, is expected to drive the next wave of AI adoption.

Further bolstering its leadership, NVIDIA is set to launch its Blackwell Ultra and Vera Rubin platforms, which could solidify its position as the go-to AI infrastructure provider. With governments, corporations and cloud providers ramping up AI investments, NVIDIA remains the key beneficiary of this seismic shift in computing.

NVIDIA’s Undervaluation: A Buying Opportunity

The recent decline in NVDA shares has created an attractive entry point for investors. The stock now trades at a trailing 12-month price-to-earnings (P/E) ratio of 23.65, below the Zacks Semiconductor – General industry average of 26.34.

NVDA Forward 12-Month P/E Ratio

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While NVIDIA still commands a premium over some major semiconductor companies, including Broadcom, Marvell Technology and Advanced Micro Devices, its valuation is justified, given its superior growth trajectory. By comparison, Broadcom trades at a forward P/E multiple of 23.06X, Marvell Technology at 21.35X and Advanced Micro Devices at 20.8X.

While these companies play crucial roles in the semiconductor industry, none match NVIDIA’s market leadership in AI and high-performance computing. Investors should recognize that NVIDIA’s premium valuation is backed by its unparalleled dominance in the fastest-growing tech sectors.

Conclusion: Buy NVDA Stock Now

Market corrections often create opportunities for long-term investors, and NVIDIA’s recent dip is no exception. The company remains at the forefront of AI-driven computing, with robust financials, groundbreaking technology and an expanding market presence.

With its stock now trading at an attractive valuation, this is an opportune moment to buy into a company that continues to shape the future of AI, cloud computing and data centers. Currently, NVIDIA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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