Nvidia Stock Sees September Weakness Despite Strong Fundamentals

Nvidia's impressive second-quarter results have investors wondering if the company's stock will continue to soar in September. The chipmaker reported a 106% year-over-year revenue gain and 128% increase in diluted earnings per share, exceeding Wall Street estimates.

While Nvidia remains the dominant player in the artificial intelligence (AI) enterprise, its stock has historically performed poorly in September, with an average decline of 0.8% over the past decade.

However, the company's fundamentals remain strong, and sell-side analysts project a 58% yearly revenue growth rate between fiscal 2026 and 2029. Nvidia's net profit margin also reached 62% in the second quarter, supported by a supply-and-demand imbalance that gives it sustained pricing power.

The stock's valuation is attractive, with a forward price-to-earnings (P/E) ratio of 23.9, only 14% higher than the S&P 500 index. However, there are risks associated with the durability of the AI infrastructure build-out, which could slow down sooner than expected.