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Nvidia (NVDA) is a Wall Street darling, a company that has defined trends and moved the rest of the market by itself. It earned its throne, first by revolutionizing gaming GPUs and then by seizing on the artificial intelligence (AI) boom.
Its H100 chips became the bedrock of AI, powering everything from deep learning to autonomous tech, sending its stock soaring. In just three years, shares have skyrocketed 477%, riding the AI wave to breathtaking highs. But now, as Nvidia gears up to report its fourth-quarter earnings for its fiscal 2025 on Wednesday, Feb. 26, after the market close, can the rally hold?
Wall Street is bracing for another seismic move, betting on a triple-digit EPS surge and potential multi-fold gains. To that end, let’s take a closer look at NVDA to find out whether the stock is still a buy or if the AI gold rush has peaked.
About Nvidia Stock
Founded in 1993, Nvidia (NVDA) started as a graphics pioneer and grew into an AI powerhouse. From redefining gaming with GPUs to fueling deep learning, high-performance computing, and self-driving tech, Nvidia’s parallel processing muscle powers the future. With a $3.4 trillion market capitalization, this Santa Clara-based company dominates data centers, pro visualization, and gaming. Its deep cloud partnerships cement its role as the backbone of next-gen computing.
Nvidia’s 2025 rally hit turbulence, with shares dipping 9.3% from their YTD high after Chinese AI disruptor DeepSeek rattled investors. A brutal 17% drop on Jan. 27 followed its App Store dominance over ChatGPT. But NVDA is clawing back.
Zoom out, and NVDA is still up 92% over the past 52 weeks. With AI demand surging, Feb. 26 earnings could be the next ignition point.
NVDA, trading at a lofty 34.03 times forward adjusted earnings, reflects its growth-driven valuation. While this is above the sector average, it is below its historical peak. As the leader in AI, Nvidia’s dominance in high-growth sectors justifies its premium. With shares down from their peak, this presents a buy-the-dip opportunity for investors.
Nvidia Tops Q3 Projections
Nvidia’s Q3 earnings on Nov. 20 beat estimates. While the AI titan reported revenue of $35.1 billion, up a whopping 94% year over year, the data center division led the charge, growing 112% to $30.8 billion, powered by the H200 chip. Non-GAAP EPS doubled to $0.81 per share, marking the sixth consecutive quarter of triple-digit bottom-line growth.
The company’s GPU dominance gives it formidable pricing power, evidenced by a 74.8% gross margin. Resilience ran through all segments: Networking rose 20%, gaming climbed 15%, and automotive spiked 72% annually.
With robust inventory and relentless AI demand, Nvidia’s growth shows no signs of waning. CFO Colette Kress forecasts AI Enterprise revenue to double in fiscal 2025. And as the race for Nvidia’s next-gen Blackwell chips intensifies, supply remains tight through 2026, keeping the momentum strong.
Nvidia’s Q4 earnings report, due next week, is fast approaching, and Wall Street is optimistic. Management has set the bar at $37.5 billion in revenue, but analysts are pushing for a slightly higher figure of $38.03 billion, with EPS expected to soar 61.2% to $0.79. Plus, while networking revenue dipped sequentially in Q3, Nvidia anticipates a strong Q4, with InfiniBand and Spectrum-X platforms gaining ground with cloud providers and supercomputing centers. Overall, fiscal 2025 is shaping up to be a blockbuster year, with analysts predicting a staggering 134.8% jump in profits to $2.77 per share.
The momentum does not stop there. Looking ahead, fiscal 2026 EPS is forecast to see a further 43.7% surge, reaching $3.98.
What Do Analysts Expect for Nvidia Stock?
Evercore’s Mark Lipacis is throwing his weight behind Nvidia, with a price target of $190 - suggesting potential upside of nearly 37%. He adds the stock to the “Tactical Outperform” list, maintaining an “Outperform” rating for its potential. While NVDA’s pullback has left some investors jittery, Lipacis sees it as a prime opportunity to snap up a quality stock at a discount before its Q4 earnings. He attributes the stock’s turbulence to Blackwell delays and concerns over competition from DeepSeek’s low-cost AI chips. However, Lipacis does not buy into the panic.
In his view, smaller, cheaper AI models could drive demand as more companies, especially smaller ones, can access AI tools. Far from seeing the rise of ASICs as a threat, Lipacis believes Nvidia’s dominance in cloud and enterprise AI remains rock-solid. With its vast developer community and CUDA software, Nvidia stands apart in a way that’s tough to match.
Meanwhile, UBS analysts are betting big on Nvidia’s Q4 results and Q1 guidance, expecting strong results as the chip giant pivots from Hopper to Blackwell. Yields for Blackwell are soaring, and OEMs are stacking up inventory. UBS pegs Blackwell’s revenue at $9 billion for Q1, with overall Q4 revenue at roughly $42 billion, and keeps NVDA at a solid “Buy” with a $185 target.
Overall, NVDA has a solid “Strong Buy” consensus rating, reflecting analysts’ bullishness on NVDA. Out of the 43 analysts in coverage, 37 recommend a “Strong Buy,” two advise a “Moderate Buy,” and the remaining four are playing it safe with a “Hold” rating.
The AI chip stock’s mean price target of $177.55 suggests that it could rally as much as 27.9% from the current price levels. The Street-high of $220 – set by Tigress Financial – implies potential upside of 58.4%.
