With its market-leading $5.2 billion valuation, Nvidia (NVDA -4.22%) isn’t sneaking up on anybody these days. The poster child of the AI revolution is the largest provider of accelerators and other chips and hardware solutions fueling the AI boom.

It has come a long way from its early days, when it largely served gaming enthusiasts. It’s playing a bigger game these days, but is the company currently wearing the market-cap crown a trick or a treat as we head into the final two months of this year and beyond? Let’s take a closer look at the bad and the good of Nvidia as an investor right now. I’ll wrap it up with my own read on where Nvidia stands as a potential portfolio position.

It’s a trick

There are some compelling knocks on Nvidia despite its stellar growth and compelling forward valuation. I may as well start with the historically cyclical nature of this business. Nvidia has delivered monster growth for years, only to stumble spectacularly.

After three consecutive years of delivering 20% to 40% top-line growth, revenue declined 7% in fiscal 2020. I want to cut you off before you blame the COVID-19 crisis. Nvidia’s fiscal year ended in January of 2020. The pandemic may have been percolating overseas in the final few weeks of that fiscal year, but the U.S. shutdown didn’t take place until mid-March of the 2020 calendar year, a month and a half into Nvidia’s fiscal 2021.

Nvidia would recover quickly with revenue spurts of 53% and 61% in the two subsequent fiscal years, only to deliver flat top-line growth in fiscal 2023. It’s been rolling ever since, but we’ve seen strong growth come to a grinding halt before.

Even strong results sometimes aren’t enough. It may surprise you to know that the stock has initially moved lower following four of its last five quarterly reports.

Another concern for Nvidia is the sustainability of its recent high-margin results. Nvidia’s reported net margin of 64% on a trailing basis can’t go much higher. Even its adjusted net margin of 41% is 4 times higher than it was a decade ago. The days of profit growth outpacing revenue gains are possibly numbered.

The biggest risk could be the end of the AI revolution itself. It doesn’t seem likely right now. AI has changed the way businesses and consumers get stuff done. How can you go back? However, there is the local outcry against data center build-outs. There is also the problematic nature of cyclical financing deals in which Nvidia and others provide clients with the means to bankroll their AI needs. With even the largest tech stars taking hits this earnings season on their soaring capital expenditures, no one would be surprised if things cool down soon.

It’s a treat

Nvidia stock has delivered generational wealth in recent years. It’s an eight-bagger over the last five years, including the slump in fiscal 2023. It also includes this calendar year, in which Nvidia’s return roughly matches the market.

The stock is slowing at an interesting time. Its business isn’t tapping the brakes. If anything, revenue has been accelerating sharply.

• Q2 FY 2026: 56%
• Q3 FY 2026: 63%
• Q4 FY 2026: 73%
• Q1 FY 2027: 85%
• Q2 FY 2027: 106%

Nvidia’s own guidance models a slowdown for the fiscal third quarter, which it will announce on Nov. 17, but it’s hard to scoff at the 89% revenue jump it’s projecting for the period. Analysts see a similar leap on the bottom line. The market historically pays a premium for superior growth, but you can buy Nvidia for a mere 13 times next year’s Wall Street profit target. Bears will argue that the leading memory stocks that have outgained Nvidia this year are the better value plays. They are trading at mid-single-digit forward earnings multiples, but those are coattail riders with even scarier cyclical volatility.

If the market doesn’t see value in Nvidia, the cash-rich market-cap king does. Its board of directors recently authorized $150 billion in share repurchases.

Unwrapping the bull and bear arguments

I’m going with Nvidia as a treat here. The current market sentiment may be gloomy, with shares 15% lower than the all-time high set earlier this month. I’ll concede that the lower forward P/E multiples aren’t a given. Nvidia has seen its business turn on a dime before. It’s juggling a lot right now.

I just don’t see demand thinning anytime soon. There is also the bullish case to be made that the future may be even better than today’s rosy analyst growth projections. The risks of margin contraction are real. Revenue decelerating at this point is a given. Nvidia would be a compelling investment even if its growth were cut in half. It’s a treat.