Looking ahead, Wall Street's consensus estimate suggests that Nvidia's EPS could come in at $4.43 in fiscal 2026. That places the stock at a forward P/E ratio of just 32.1. This means the stock will have to soar 82% next year just to trade in line with its 10-year average P/E of 58.6, which implies a stock price of $259!

Semiconductor giant Nvidia (NVDA) has been hitting new market-cap milestones at an unprecedented pace. Last year, it joined the $1 trillion market cap club, while its valuation surpassed $2 trillion in February this year.

The stock isn't cheap, but it isn't far from where its peers are priced. Nvidia has risen to the top of AI investments because it has become the building block on which AI models are built and trained.