Is NVIDIA Stock Outperforming the S&P 500?

Santa Clara, California-based NVIDIA Corporation (NVDA) is a key innovator of computer graphics and AI technology. The company provides graphics and compute and networking solutions. With a market cap of $5.1 trillion, NVDA develops a platform for scientific computing, AI, data science, autonomous vehicles, robotics, metaverse, and 3D internet applications.

Companies worth $200 billion or more are generally described as “mega-cap stocks,” and NVDA definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the semiconductors industry. NVDA is a trailblazer in GPU-accelerated computing, focusing on creating innovative products and platforms for gaming, professional visualization, data center, and automotive industries.

Despite its notable strength, NVDA shares slipped 10.1% from their 52-week high of $236.54, achieved on May 14. Over the past three months, NVDA stock has gained 20%, outperforming the S&P 500 Index’s ($SPX) 9.3% gains during the same time frame.

Shares of NVDA rose 14% on a YTD basis and climbed 56.9% over the past 52 weeks, outperforming SPX’s YTD gains of 9.9% and 27% returns over the last year.

To confirm the bullish trend, NVDA is trading above its 200-day moving average over the past year, with slight fluctuations. It has been trading above its 50-day moving average since early April.

NVDA beat on strong AI infra and data center demand, though the stock dipped 1.8% post-release. Blackwell adoption drove revenue and margins, with Huang calling it the “fastest ramp in our history.” Guidance assumes continued AI build-outs and Vera/VeraRubin CPU launches. The company split Data Center into Hyperscale and ACIE, with sovereign revenue up about 80% year over year across 40 countries. 

Its networking revenue nearly tripled on Spectrum-X demand, and NVDA committed $145 billion to secure supply. NVDA also rallied on “Ising,” quantum AI models that cut calibration from days to hours and beat pyMatching on speed/accuracy. Adoption by IonQ, Inc. (IONQ) and Rigetti Computing, Inc. (RGTI) positions NVDA as the quantum software standard, expanding its moat.

On May 20, NVDA shares closed up by 1.3% after reporting its Q1 results. Its adjusted EPS of $1.87 exceeded Wall Street expectations of $1.77. The company’s revenue was $81.6 billion, topping Wall Street forecasts of $78.8 billion.

NVIDIA’s rival, Advanced Micro Devices, Inc. (AMD) shares has taken the lead over the stock, with a 332.6% uptick over the past 52 weeks and a 131.4% gain on a YTD basis.

Wall Street analysts are bullish on NVDA’s prospects. The stock has a consensus “Strong Buy” rating from the 49 analysts covering it, and the mean price target of $297.11 suggests a potential upside of 39.8% from current price levels.

On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.