Nvidia shares closed at €184.60 on Friday, capping a week that saw a 7.34% advance. The rally, partly fueled by the record-breaking $26.5 billion US initial public offering of memory chip maker SK Hynix on July 10, 2026, has pushed the stock back into the spotlight. Yet the company now trades at a forward price-to-earnings ratio of 18 to 19 – the cheapest valuation since early 2019, according to analysts at Bank of America and Citi. That is a striking contrast with competitors: AMD commands a P/E of 73 and Intel of 136, both growing far slower than Nvidia.
The stock remains 8.84% below its 52-week high of €202.50, set on May 14, 2026, after a roughly 16% pullback. Despite that, the long-term trend line remains intact. Nvidia now sits 12.02% above its 200-day moving average of €164.78 and has climbed back above its 50-day average of €181.22. The relative strength index of 58.6 signals room to run before becoming overbought.
What’s Driving the Rally
Three factors converged over the past week to reignite buying interest. A $6 billion deal involving Reflection AI and SpaceX lifted sentiment across the tech space. Dell and Super Micro continue to expand their server platforms with Nvidia’s Vera Rubin and NVL4 architectures. And both Bank of America and Citi reaffirmed “Buy” ratings, with price targets of $350 and $300 respectively, citing a product roadmap that remains on schedule – including the next-generation Kyber chip.
Nvidia itself is returning cash to shareholders aggressively. An $80 billion buyback program has been confirmed, and the quarterly dividend has been raised to $0.25 per share, with the company targeting a 50% payout of free cash flow.
Revenue Growth That Defies a Bargain Valuation
In the first quarter of fiscal 2027, Nvidia’s revenue surged 85.2%. Analysts see data-center segment revenue reaching $203 billion in the second half of the fiscal year, roughly 20% above the current consensus. For the upcoming quarter ending August 26, the market expects sales of $91.73 billion and earnings per share of $2.08. The company’s own guidance of around $91 billion for the second quarter leaves room for upside if hyperscaler investments – expected to total $700 billion in 2026 alone – continue to flow into Blackwell architecture and networking gear.
Should investors sell immediately? Or is it worth buying Nvidia?
The SK Hynix IPO is a further vote of confidence in the AI supply chain. It was the largest US listing by a foreign company ever, signaling that the ecosystem is scaling capacity to meet Nvidia’s demand. Hynix, however, is a memory manufacturer; traders were placing bets more on Nvidia’s platform dominance, anchored by the CUDA ecosystem with over 4 million developers, than on cyclical memory stocks.
Bearish Headwinds Remain
Despite the bullish catalysts, analysts at Jefferies have flagged potential delays for the Kyber backplane circuit board, a critical component for the next system generation. Production may slip from 2027 to 2028, pushing high-margin infrastructure projects later than the market expects. Separately, reports of RTX 50-series consumer GPUs hitting hot spots of 107 degrees Celsius, forcing thermal throttling, add technical uncertainty.
Broader macro risks also cloud the outlook. Some institutional investors are rotating into value sectors, while US export controls on China and tensions in the Middle East weigh on the entire semiconductor space. Nvidia’s guidance for the coming quarter deliberately excludes any China-related AI revenue, giving it a buffer against further restrictions. Yet a slowdown in hyperscaler capital spending, combined with these geopolitical pressures, could put pressure on Nvidia’s market capitalization of €4.327 trillion. A retreat to the 50-day moving average around €181.22 would be a realistic scenario.
What to Watch Next
The immediate catalyst is the quarterly report on August 26, 2026. If Blackwell production stays on track and the Kyber rumors remain unconfirmed, the technical setup supports another test of the 52-week high at €202.50. A break below the 50-day average, however, would likely reverse the short-term momentum. The average analyst price target of €264.16 implies significant upside, but achieving it depends on the $203 billion data-center revenue forecast materializing.
For now, Nvidia presents a rare puzzle: a company with a historic valuation discount, accelerating revenue, and a dominant product cycle, yet facing tangible supply-chain and geopolitical risks. The coming weeks will reveal whether the market fills the gap between price and earnings power – or delivers another setback.
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