Why Nvidia Stock Soared 17% in June

Nvidia (NASDAQ: NVDA) stock jumped 17% in June, according to data provided by S&P Global Market Intelligence. It reported a phenomenal earnings report at the end of May, and that boosted investor confidence through June.

An AI giant with no competition

Nvidia has exploded from its one-time focus on the gaming industry to become a serious force in the development of generative artificial intelligence (AI). It has as much as 95% of the AI semiconductor market, and the biggest names in the industry, like Amazon and Meta Platforms, rely on its premium products to drive their AI platforms.

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These were some of the highlights from the 2026 fiscal first quarter (ended April 27):

• Revenue increased 69% year over year, including a 73% increase in data center sales.
• Net income increased from $0.60 last year to $0.76 this year.
• It released two new AI technologies, Blackwell Ultra and Dynamo.

The data center opportunity is of particular importance. Data centers are the huge AI factories where companies train their large language models (LLMs). There were 100 Nvidia-powered data centers launched in the first quarter, double from last year, and they're also using double the amount of chips year over year. This segment should be a continued source of high growth for Nvidia.

However, investors shouldn't discount the company's other segments, which are also growing rapidly. It has robust gaming and auto segments, and although Nvidia became a household name because of AI, it has a diversified business that makes it stronger.

Reaching new highs

Nvidia stock had fallen earlier this year as fears about tariffs and competition worried the market. It appears, for now at least, that those worries are unfounded, and smart investors scooped up shares on the dip.

It's still reasonably priced relative to its growth prospects. Wall Street sees earnings per share (EPS) for this year growing from $2.99 to $4.29 and reaching $5.76 next year. That's a 39% compound annual growth rate, and Nvidia stock trades at a forward one-year P/E ratio of 27.

Even if you didn't manage the press the buy button, it's not too late. Nvidia stock has plenty of life left in it as AI keeps exploding, and Nvidia powers that growth. It won't be able to create the same kind of shareholder wealth that it did for early investors, but it should keep rewarding patient investors over the long haul.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.