As Iran Threatens Attacks on Nvidia, Should You Actually Sell NVDA Stock?
Suddenly, Nvidia (NVDA) has found itself in the middle of a geopolitical drama that feels awkward, even for seasoned investors. Headlines about Iran’s Islamic Revolutionary Guard Corps (IRGC) listing major U.S. tech firms as potential targets have added another layer of uncertainty to an already volatile market. It’s the kind of news event that can cause investors to have a knee-jerk reaction and, frankly, that’s exactly what investors are doing in this case.
But it is probably worth taking a step back for a moment. After all, the overall market has already had a tough start to 2026, with the S&P 500 ($SPX) beginning the year with a poor first quarter. The added spice of geopolitics only makes things even more volatile. But it’s worth remembering that markets have a way of overreacting to potential threats, especially when the business model itself has remained sound. That’s where Nvidia becomes especially interesting.
Based in Santa Clara, California, Nvidia is a leading semiconductor company that specializes in GPUs, AI infrastructure, and accelerated computing. With a market capitalization of about $4.3 trillion, Nvidia is no longer just a company — it’s a company at the heart of the global AI ecosystem, from hyperscaler data centers to enterprise AI.
NVDA stock has clearly performed well, but it’s still volatile. Shares have risen by more than 100% from the 52-week low but still trail the recent high of $212.19 by 20%. Year-to-date (YTD), Nvidia has also performed well and its recent short-term price movement has shown resilience — NVDA has risen by more than 3% in the last five days despite macro headwinds. Compared to the rest of the market, Nvidia stock still performs better structurally, even if its recent movement has seen it fall victim to investor sentiment.
In terms of valuations, Nvidia currently trades at 22.9 times forward earnings and has a PEG ratio of 0.59. While the stock is currently considered to be “expensive” by most analysts, these numbers tell a very different story. The reality is, with profit margins over 55% and a return on equity of 97%, Nvidia is currently operating at an efficiency level that very few companies in the world can match.
This is not an overpriced stock. This is a premium company trading at relatively fair value to its growth rate.
Nvidia’s most recent earnings release was frankly exceptional. The company reported revenue of $68.1 billion, an increase of 73% over the same period last year. Revenue from data centers was an astonishing $62.3 billion, an increase of 75% year-over-year (YOY). Finally, full-year revenue came in at $215.9 billion, an increase of 65% YOY.
These numbers tell nothing of slowing demand for Nvidia’s products. In terms of profitability, the firm also continues to operate at an elite level. Gross margins were over 75% for the fourth quarter while full-year margins were over 71%. The company also had Q4 EPS of $1.76 on a GAAP basis, up 98% YOY. Nvidia is not just growing, but growing profitably.
Going forward, management commentary points to ongoing momentum driven by AI adoption. The focus on “agentic AI” and inference workloads suggests a trend toward more persistent and recurring demand for compute infrastructure. Nvidia’s platforms are geared towards reducing cost per token while improving performance, thereby solidifying the company’s position.
There is also the capital return aspect, which must be factored in by investors. Nvidia paid out $41.1 billion in capital return through share repurchases and dividends in fiscal 2026, while still having $58.5 billion available in share repurchase authorization. This is certainly a unique combination of hypergrowth and capital return.
Analysts on Wall Street have an overwhelmingly positive view of NVDA stock with a “Strong Buy” consensus rating. The mean price target is currently at $268.80, suggesting potential upside of about 52% from current levels. The high-end target sits at $380, suggesting that NVDA could potentially go even higher based on the acceleration of AI technologies.
On the date of publication, Yiannis Zourmpanos had a position in: NVDA. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com