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Nvidia's (NVDA) extraordinary journey in 2024 has redefined the boundaries of corporate valuation, catapulting the chipmaker to become the world's most valuable company at peaks north of $3.6 trillion. The artificial intelligence (AI) revolution has transformed this once-modest graphics card manufacturer into a technological powerhouse, with its stock price surging an astounding 177.8% year-to-date, outpacing every major tech competitor on the Nasdaq-100 Index ($IUXX). This is also reflected in the Dow Jones Industrial Average ($DOWI), where NVDA recently replaced Intel (INTC), highlighting the global shift in semiconductor industry leadership.
However, the market's response to Nvidia's recent earnings announcement was once again to sell the news. Despite reporting revenues that crushed its previous year's performance by 94%, reaching $35.1 billion, NVDA stock has very nearly corrected by 10% since reporting its Q3 earnings.
While investors seem unimpressed, analysts at major investment firms, from JPMorgan to Goldman Sachs, have responded by raising their price targets, suggesting that Nvidia's position at the heart of the AI revolution remains as robust as ever. However, with NVDA stock down another 3.9% today, the question on every investor's mind seems to be whether the AI chip giant still has room to run, or if it's time to cash out. The answer, as we'll explore, lies in the nuanced interplay of market dominance, technological innovation, and future growth projections.
Nvidia's Financial Performance
Nvidia's latest earnings report showcases a company firing on all cylinders, with record-breaking numbers that underscore its dominance in the AI chip market. The tech giant delivered exceptional performance in Q3 2025, with revenue reaching $35.1 billion, marking a 94% increase year-over-year and 17% growth from Q2. The data center segment continues to be the primary growth driver, with revenue surging to $30.8 billion, representing a 112% year-over-year increase and 17% sequential growth.
Adjusted earnings per share reached $0.81, up 19% from the previous quarter and 103% year-over-year.
CEO Jensen Huang emphasized the AI revolution's momentum, stating "The age of AI is in full steam, propelling a global shift to NVIDIA computing." The demand for their upcoming Blackwell platform has been described as "incredible," with foundation model makers scaling up their operations.
Despite these stellar results, the stock has pulled back nearly 10% since the post-close earnings report on Nov. 20. Of course, a pullback of this magnitude isn't necessarily a reason to panic, considering Nvidia has delivered an impressive 177% gain year-to-date, and 742% over the past two years.
Nvidia's Growth Catalysts
Nvidia's growth story seems far from over, with several key catalysts poised to drive the company's expansion in the AI chip market. The highly anticipated Blackwell architecture is at the forefront, set to launch in the fourth quarter of 2024, representing the next evolution in AI computing capabilities.
The demand for Blackwell chips is described by CEO Jensen Huang as "insane," with production ramping up faster than initially expected. Nvidia aims to ship billions of dollars worth of Blackwell revenue in the fourth quarter alone, demonstrating the market's insatiable appetite for advanced AI processing power.
Building on this momentum, Nvidia continues to forge strategic partnerships to expand its global reach. A collaboration with Alibaba (BABA) Cloud aims to advance autonomous driving technology for Chinese automakers, while a partnership with Hewlett Packard Enterprise (HPE) introduces co-developed AI solutions to accelerate enterprise adoption of generative AI.
The broader AI infrastructure market presents tremendous growth potential, with projections reaching $421.44 billion by 2033 at a CAGR of 27.53%. This forecast aligns with major tech companies' planned investments of over $1 trillion in AI infrastructure over the next five years.
Nvidia's comprehensive AI ecosystem, accessible through any public cloud, positions the company to capture an even larger share of the AI value chain. As the primary supplier of AI chips and related technologies, Nvidia stands to benefit significantly from this technological revolution, driving higher margins and sustained growth across its expanding portfolio - which also includes substantial investments in healthcare, biotech, and robotics.
Valued at a forward price/earnings (P/E) ratio of 48.04, NVDA isn't necessarily cheap, with the valuation reflecting higher-than-average growth expectations from investors. However, it's fair to say Nvidia has delivered on those expectations - and with a price/earnings-to-growth (PEG) ratio of 1.28, on an adjusted basis, NVDA trades at a modest discount to its tech sector peers and its own 5-year average valuation of 2.00.
Wall Street's Bullish Stance
Looking ahead, Nvidia projects Q4 2025 revenue of approximately $37.5 billion, with GAAP and non-GAAP gross margins expected at 73.0% and 73.5%, respectively. The company's next earnings release, scheduled for Feb. 26, 2025, will be crucial in seeing how far above and beyond Nvidia can deliver when it comes to these targets.
Wall Street's enthusiasm for Nvidia remains unshaken, with analysts doubling down on their bullish stance following the company's latest earnings report. The broader analyst consensus paints an overwhelmingly positive picture, with a “Strong Buy” average rating and a mean price target of $164.70, indicating more than 20% upside from the current price.
Conclusion
So, is Nvidia stock a buy or a sell after its recent earnings report? The verdict leans towards a “buy” anytime this tech powerhouse pulls back. Despite the muted market reaction, Nvidia's stellar performance, dominant AI chip position, and Wall Street's bullish view paint a promising picture. Growth catalysts like Blackwell chips and projected AI investments bolster its outlook. For long-term AI bulls, Nvidia remains a must-own market leader.
