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Nvidia’s (NVDA) hold over the artificial intelligence (AI) chip market has been stellar, and its GPUs fueled a revolution that sent the stock soaring 179% in 2024, making it the best performing in the Dow Jones Industrials Average ($DOWI). Record-breaking revenue, a seat at the table of America’s most elite stocks, and the dawn of its Blackwell architecture made 2024 a year to remember.
But dominance does not mean immunity. Nvidia shed nearly $600 billion in market value in a single day after Chinese startup DeepSeek revealed it trained an AI model at a significantly reduced cost, raising questions about whether Nvidia’s biggest customers have been overspending and if they will start cutting back.
Nvidia’s next big moment is fast approaching, with all eyes on Feb. 26. That’s when Nvidia unveils its highly anticipated fourth-quarter earnings results for its fiscal 2025, a moment that could confirm whether its momentum is slowing.
Wall Street will dissect every number and forecast, searching for signs of continued AI-fueled demand or cracks in the foundation. To that end, let’s see what the market is watching and what Wall Street analysts expect.
About Nvidia Stock
Founded in 1993, Santa Clara-based Nvidia Corporation (NVDA) started as a gaming chip innovator, but its vision stretched far beyond pixels. Valued at a market cap of $3.1 trillion, today, it reigns as the AI revolution’s backbone, powering everything from ChatGPT’s training to self-driving cars. With a staggering 90% hold on the AI chip market and an unmatched CUDA ecosystem, Nvidia’s GPUs are not just silicon – they are the engines of the future.
Nvidia’s 2025 market run hit a rough patch, with shares sliding 16% from their YTD high of $153.13. What caused this was Chinese AI upstart DeepSeek, whose low-cost model shook investor confidence, fueling a 17% drop on Jan. 27 after it overtook ChatGPT in U.S. App Store downloads.
Yet, zoom out, and NVDA is still up 83% over the past 52 weeks. With AI chip demand showing no signs of cooling, the Feb. 26 earnings report could be the spark that reignites its momentum.
NVDA has never been a bargain buy, currently trading at a lofty 42.27 times forward adjusted earnings - but one that is well earned. As the driving force behind AI, Nvidia dominates high-growth sectors, fueling relentless financial expansion. Market leaders do not come cheap, but with shares now down double digits from their peak, this rare dip offers a prime opportunity for long-term investors to grab a stake in the future of computing.
Nvidia Beats Q3 Projections
Nvidia’s Q3 earnings on Nov. 20 crushed forecasts, proving AI’s unstoppable momentum. The AI titan's revenue skyrocketed 94% year over year to $35.1 billion, the real star being its data center division, surging 112% annually to $30.8 billion, fueled by the demand for its powerhouse H200 chip. Non-GAAP earnings doubled to $0.81 per share, marking an incredible sixth straight quarter of triple-digit profit growth.
Nvidia’s dominance in the GPU game gives it serious pricing power. In Q3, gross margins hit 74.8%, up year-over-year and proving the strength of its position.
Nvidia’s segments showcased resilience. Networking revenue climbed 20% year-over-year, while gaming surged 14% sequentially and 15% annually to $3.3 billion, fueled by back-to-school demand for GeForce RTX GPUs. Meanwhile, the automotive sector rose 30% sequentially and 72% annually as Nvidia’s Orin platform gained traction in next-gen autonomous vehicles. With strong inventory levels and relentless AI-driven demand, Nvidia’s momentum shows no signs of slowing - setting the stage for another blockbuster quarter.
CFO Colette Kress sees no slowdown, forecasting Nvidia AI Enterprise revenue to double in fiscal 2025. And then there is Blackwell. Tech giants are already scrambling for Nvidia’s next-gen AI chips, with supply expected to stay tight well into 2026.
NVDA Fans, Mark Your Calendars for February 26
The countdown to Nvidia’s Q4 earnings on Wednesday, Feb. 26, after the market close, has officially begun, and investors are on edge. Management has projected $37.5 billion in revenue, but Wall Street is aiming higher at $38.13 billion, with EPS soaring 61.2% to $0.79.
Although its networking revenue dipped sequentially in Q3, demand remains robust. Nvidia projects a recovery in Q4 as its InfiniBand and Spectrum-X Ethernet platforms continue to gain traction with cloud service providers and supercomputing centers.
For fiscal 2025, analysts anticipate profit to jump 134.8% to $2.77 per share, with another 43.7% surge to $3.98 per share in fiscal 2026.
Nvidia has firmly planted itself as the king of AI, owning the GPU market that powers everything from training AI models to real-time inference. With major tech players like Meta (META) and Microsoft (MSFT) as loyal customers, demand for its cutting-edge products, especially the Blackwell architecture, is off the charts. The company expects Blackwell to generate billions in its first quarter of commercialization.
Despite recent jitters about competitors like DeepSeek, Nvidia’s top-tier clients - who crave the best of the best - are still spending big. Analysts are optimistic, brushing off efficiency concerns, as the AI sector continues its rapid expansion.
Wall Street’s Bullish Bet on NVDA
The recent DeepSeek panic sent Nvidia shares wobbling, but Wall Street’s top analysts are not sweating it. Morgan Stanley sees the selloff as a golden buying opportunity, reaffirming NVDA as a “Top Pick” with an “Overweight” rating and a $152 price target, reflecting confidence in both Hopper and Blackwell. Despite some longer-term export concerns, the firm says cloud giants are not changing their AI spending plans, and Blackwell demand remains rock-solid.
Meanwhile, Citi trimmed its target price to $163 from $175 but maintained a “Buy” rating, modeling solid near-term results. The firm sees Nvidia’s Q4 and Q1 revenues landing between $38 billion and $42.5 billion, with Blackwell’s meaningful ramp expected by mid-2025. Citi also flagged Nvidia’s gross margins, which have kept the stock range-bound since June 2024 but are expected to bottom out in the April quarter.
Last month, Tigress Financial just crowned NVDA with a “Strong Buy,” setting a street-high $220 price target that implies 71% upside. Analyst Ivan Feinseth sees Nvidia as the unrivaled AI king, poised to reap the rewards of skyrocketing AI investment.
Analysts are highly bullish on NVDA, with a solid “Strong Buy” consensus rating overall. Out of the 43 analysts in coverage, 37 recommend a “Strong Buy,” two advise a “Moderate Buy,” and four analysts maintain a “Hold” rating.
The mean price target of $178.09 suggests that the AI chip stock could rally as much as 38.4% from the current price levels.
