Nvidia is Monday's pick for IBD 50 Growth Stocks To Watch as the specialty chip designer is back on the elite list after a hiatus. Nvidia stock has inched its way into the last slot on the list of high-performing IBD 50 names.
The IBD 50 stock was climbing around 1% Monday as its CEO kicks off a tech conference highlighting artificial intelligence in London. Also in London, U.S. and China officials met to discuss the U.S.-China trade agreement. Investors will be listening for any hints of easing chip export restrictions.
Chief Executive Jensen Huang joined United Kingdom Prime Minister Keir Starmer in kicking off London Tech Week. The UK leader is committed to AI technology and sees it being used in every government department. AI is infiltrating industries ranging from manufacturing to health care to scientific research, Huang pointed out.
"The UK has one of the richest AI communities of anywhere on the planet, the deepest thinkers, the best universities … and the third-largest AI capital investment of anywhere in the world," Huang said at the conference.
"We're going to start our AI lab here. … We're going to partner with the UK to upskill the ecosystem of developers into the world of AI," Huang said.
Nvidia stock ranks No. 2 out of 39 stocks in IBD's fabless semiconductor industry group. The group holds the 62nd spot out of the 197 industry groups that Investor's Business Daily tracks.
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Nvidia Stock Makes A Comeback
To make it on the IBD 50, stocks need to have robust profit growth, a superior IBD Composite Rating and positive relative strength over the last 12 months.
Nvidia stock holds a 97 Composite Rating and its Relative Strength Rating has climbed to 87 from 64 four weeks ago. Further, it boasts a perfect 99 Earnings Per Share Rating.
The Dow Jones stock has climbed six out of the last seven weeks.
Nvidia stock is in an early-stage consolidation pattern with an official 153.13 buy point, according to MarketSurge pattern recognition. The entry point is also its all-time high, reached on Jan. 7.
Its 21-day exponential moving average and its 50-day moving average are rising, a positive sign for a stock. Moreover, its relative strength line has been climbing since late April.
Shares have gained around 7.5% so far this year.
Nvidia's Profit Rises But Slows Pace
Nvidia topped fiscal first-quarter earnings and sales estimates on May 28, but its fiscal second-quarter revenue outlook was below views. Its quarterly profit growth has been tapering and rose 33% after expanding by 103% and 71% in the prior quarters.
Its fiscal 2024 earnings soared 294% while 2025 profit vaulted 130%. For fiscal 2026, forecasts have been recently revised downward to 45%. Growth of 32% in fiscal 2027 is in Wall Street's sights.
Nvidia's sales growth has also decelerated from unsustainably high rates, with its fiscal first-quarter revenue rising 69% following 94% and 78% growth, and triple-digit figures prior to that.
Sales projections expect a 52% rise for the fiscal second quarter, then slowing to a 34% increase over the next four quarters.
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