/Jen-Hsun%20Huan%20NVIDIA)
In today’s booming tech arena, few sub-sectors shine as brightly as artificial intelligence (AI) and semiconductors. Nvidia Corporation (NVDA) is the undisputed leader, boasting a full-stack accelerated computing platform that integrates hardware, software, and services. This powerhouse is cashing in on skyrocketing demand for AI and advanced chips, solidifying its position as an industry juggernaut. In 2024, Nvidia stock has been a Wall Street standout, skyrocketing triple digits while leaving the broader indexes far behind.
Famed investor Stanley Druckenmiller recently said he regrets getting out of this outperforming chip stock too early, with NVDA hitting a series of new all-time highs. Brokerage firm Bank of America just raised its price target on NVDA, signaling confidence in higher highs for this chip giant. Should investors dive in now, or hold out for a better entry?
About Nvidia Stock
Santa Clara-based Nvidia Corporation (NVDA), founded in 1993, reigns supreme in the semiconductor world and has rocketed to a staggering $3.48 trillion market cap. Nvidia now dominates roughly 80% of the AI chip market, fueled by its cutting-edge CUDA software, which has set the industry standard for GPU programming. Its technology powers everything from data centers to automotive innovation.
Nvidia has soared to stunning highs, fueled by the AI boom. Over the past two years, shares of the chip giant skyrocketed 915%, catapulting it to the world’s second-largest company by market cap, just after Apple (AAPL).
Over the past 52 weeks, NVDA has surged 247.6%, easily outpacing the S&P 500 Index's ($SPX) 41.6% returns and the iShares Semiconductor ETF’s (SOXX) 55.4% gains. The stock set an all-time high of $144.42 on Oct. 22.
Nvidia rewarded its shareholders with $7.5 billion in Q2 2025 through share repurchases and dividends. With an 11-year streak of dividend payouts, the chip titan paid out $0.01 per share to its shareholders on Oct. 3. With its annualized dividend of $0.04 per share translating to a modest 0.03% forward dividend yield, Nvidia's 1.04% payout ratio reflects its primary focus on growth.
In terms of valuation, Nvidia stock trades at 52.61 times forward earnings - higher than the sector median of 29.04x, reflecting that the shares are priced at a premium. However, its price/earnings to growth (PEG) ratio of 1.47x is not only lower than the tech sector median, but also its own historical average. This suggests that NVDA is still fairly priced, based on its projected earnings growth.
Nvidia’s Q2 Earnings Surge Past Wall Street’s Projections
Nvidia reported its Q2 2025 earnings on Aug. 28, and continued its streak of shattering expectations. The company’s revenue skyrocketed 122.4% annually to $30 billion and topped estimates by 4.5%. NVIDIA achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI. Its non-GAAP EPS soared 152% to $0.68, which also surpassed projections.
Data Center revenue reached $26.3 billion, marking 16% sequential growth and an impressive 154% annual increase. Nvidia’s strength in the data center space is driven by surging demand from cloud service providers (CSPs) and major companies across the consumer, internet, and enterprise sectors.
Nvidia’s net cash from operations hit $14.5 billion, a dramatic leap from $6.3 billion in the year-ago quarter. It closed the quarter with a $34.8 billion cash reserve, and carries very little debt thanks to its fabless model.
With Q3 earnings results scheduled for Nov. 20, Nvidia projects a $32.5 billion in revenue, marking an 8.2% sequential growth and a massive 79.4% annual leap.
Analysts expect Nvidia’s Q3 EPS to rise 81.6% year over year to $0.69, while the revenue consensus of $32.9 billion hovers slightly above the midpoint of management’s own guidance. Looking ahead, fiscal 2025 EPS could climb 124.6% to $2.65 per share, with another 33.2% increase to $3.53 in fiscal 2026.
Billionaire Investor Stanley Druckenmiller's Big Mistake
NVDA stock sold off after earnings, as traders had higher hopes for the company’s growth forecast - but the dip ultimately proved to be a solid buying opportunity, as the shares went on to hit new highs earlier this month.
In fact, billionaire investor Stanley Druckenmiller recently confessed that he regrets selling Nvidia too soon. In an Oct. 16 Bloomberg interview, he said that exiting his NVDA stake late in Q1 was a “big mistake.”
Adjusting for the stock split, CNBC estimates that Druckenmiller could have missed out on $1.19 billion in profits on Nvidia’s rise this year.
Despite thinking the stock was overvalued after a tripling in a year, Druckenmiller now admits he underestimated Nvidia’s long-term potential. “I’m licking my wounds from a bad sale,” he said, hinting he’d jump back in if prices drop.
What Do Analysts Expect for Nvidia Stock?
BofA's analyst team, led by Vivek Arya, kept their "Buy" rating on NVDA and raised the price target from $165 to $190, indicating potential upside of 34.5%.
According to Arya, despite trading near all-time highs, NVDA is still "undervalued" relative to its Big Tech peers. BofA raised Nvidia’s 2025 EPS estimate to $2.87, and 2026 estimates from $3.90 to $4.47, with 2027 estimates rising from $4.72 to $5.67.
Arya also called out Nvidia’s extraordinary free cash flow (FCF) margins of around 45% to 50%, nearly double the Magnificent 7 average.
"In dollar terms, NVDA could take in $200 billion of FCF over the next two years, rivaling Apple (AAPL) and providing growth optionality," wrote the analyst.
Wall Street is overwhelmingly upbeat about Nvidia, as the stock has a consensus “Strong Buy” rating overall. Out of the 41 analysts in coverage, 35 recommend a “Strong Buy,” two advise a “Moderate Buy,” and four maintain a “Hold” rating.
The mean price target of $151.36 suggests an upside potential of 7.1% from current levels. NVDA’s Street-high target price of $200, from Rosenblatt, implies the stock could rally as much as 41.6%.
On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
