Key Highlights
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Nvidia’s financial health is on an upward trajectory.
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The demand for the company’s GPUs is soaring among AI firms.
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If you’re contemplating whether to invest more in Nvidia now, consider dollar-cost averaging—essentially, making small, regular investments.
Nvidia (NASDAQ:NVDA) has wrapped up another successful year. The stock price has risen by 39% in 2025, buoyed by a recent earnings report revealing a 62% year-over-year revenue increase during the first three quarters of fiscal 2026, which ended on October 26, 2025. Gross profits rose by 48%, and net income grew by 52%.
There are high expectations for the upcoming year, especially following the company’s announcement of a $500 billion backlog anticipated by the end of 2026. However, Nvidia is currently trading at a high price-to-earnings ratio of 46. So, do you buy Nvidia stock now or hold off until a better opportunity arises?
How to Approach Nvidia Stock
Nvidia certainly shows promise as an investment. Its GPUs are clearly in demand among AI companies, driving substantial revenue growth. In the last quarter, data centers contributed 90% of Nvidia’s total revenue. This makes it an appealing choice for your portfolio, especially if you’re looking for top stocks in AI. While it’s natural to be cautious about high P/E ratios, remember that strong companies often come at a premium.
Yet, I find myself wondering about the potential for growth in light of a possible recession. Currently, Nvidia seems to maintain a reasonable valuation compared to many AI firms, particularly when you look at competitors like Advanced Micro Devices, which has a much higher P/E ratio of 106. In contrast, Nvidia could appear more attractive.
If investing a significant sum all at once feels daunting, adopting a dollar-cost averaging strategy might be a sensible option. This method involves purchasing a fixed amount of Nvidia stock on a routine basis, letting you buy, say, one or two shares per week, regardless of its market performance.
I’ve used this dollar-cost averaging approach with some tech stocks myself, including Nvidia. And even if prices dip, there’s always the option to buy the dip.
Is it Time to Buy Nvidia Stock?
Before making a decision on Nvidia stock, consider this:
According to the Motley Fool Stock Advisor, their analysts have identified other stocks they believe are more promising right now—and Nvidia doesn’t make that list. These selections could lead to impressive returns in the coming years.
Interestingly, if you had invested $1,000 in Netflix when it was recommended back on December 17, 2004, you would have seen that amount grow to about $490,703! In contrast, if you picked Nvidia from the recommendation made on April 15, 2005, that initial investment would have grown to about $1,157,689!
It’s essential to take note of the Stock Advisor, which boasts an impressive average return of 966%, especially when compared to the S&P 500’s 194%. It’s certainly worth being part of an investing community that’s formed by everyday investors for everyday investors.
