The U.S. presidential election has proven to be a positive catalyst for the stock market. Since Nov. 5, the S&P 500 has risen by 5% as of Monday. But one stock that hasn't been doing well since then is Nvidia (NVDA -2.09%), which has gone in the opposite direction, declining by more than 6%.

It's unusual territory for Nvidia to be in, as it has been among the hottest growth stocks to own, especially in recent years. Are its recent struggles a sign that it has finally hit a peak?

A strong earnings report may not be enough to sway investors anymore

When Nvidia reported earnings last month and beat expectations, and the stock didn't surge in value, that was perhaps the big warning sign to investors that it may not be so easy for the hot artificial intelligence (AI) stock to take off anymore. Nvidia's sales nearly doubled to $35 billion for the period ended Oct. 27 and net income of more than $19 billion was an astounding 55% of the top line. It beat expectations as AI demand remains robust.

The problem is that when a stock already has a $3 trillion market cap and is trading at more than 50 times its trailing earnings, expectations are already fairly high. And even though Nvidia's stock hasn't been doing terribly well in the past month, it's still among the top three most valuable companies in the world (the others are Microsoft and Apple). Nvidia is what you might consider a stock that is "priced to perfection." For it to rise drastically in value, it could easily become the most highly valued stock in the world.

Has Nvidia's stock hit a ceiling?

The stock crossed the $150 mark on Nov. 21 and it hasn't returned to that level since. I do believe that there may be some resistance not only at that level but at whatever the highest market cap is -- today it's Apple, with a market cap of around $3.8 trillion. For Nvidia to convince investors that it should be the most valuable stock in the world, and continue rising in value, it may need to do even more than it has been doing.

Investors may also be concerned that there are a growing number of risks on the horizon, which could weigh on Nvidia's future growth prospects.

More tech companies are creating custom AI chips, which could take some market share away from Nvidia. China recently launched an antitrust investigation to determine whether Nvidia violated its anti-monopoly laws. And there's also the worry that AI spending may slow in the near future. For a stock that is priced to perfection, these are all potential cracks that could tarnish Nvidia's pristine image.

Is Nvidia still a good buy?

If you're planning to buy and hold Nvidia stock for the long term, there's still a strong bullish case to be made for investing in the company. It's a leader in the AI chip space and demand remains incredibly strong for not just its chips, but data centers as well.

But investors should also brace for more of a pushback in the stock price, given its high valuation, and the possibility of a slowdown in the market. While it's tempting to think sales will continue soaring and AI demand will only keep on going up and up and up, there's the very real possibility that tech companies may pause or slow down their rate of spending, especially if economic conditions worsen in the near future. Should that happen, Nvidia's stock could be vulnerable to a correction.

I do believe that Nvidia's stock has peaked in the near term but that doesn't mean that it's a bad buy for the long haul. Investors should simply brace for the possibility of more headwinds and stock declines in the months ahead, as this overheated stock market could be overdue for a correction, and Nvidia is no exception.