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Seldom has a single company defined a sector more than Jensen Huang-led Nvidia (NVDA) has defined artificial intelligence. Founded over three decades ago in 1993, the Santa Clara, California-based company is a global leader in computing technology. It is renowned for its graphics processing units (GPUs) and AI advancements.
Its dominant share in the AI chip market and forecasts of an even further rise in market share have led Nvidia shares to gain 1,771.6% over the past five years. This has led to Nvidia finding its place among the most valuable companies in the world.
However, the sudden emergence of Chinese AI startup DeepSeek and President Donald Trump’s tariffs have halted Nvidia’s rise in 2025. Despite reporting results for the latest quarter that were above expectations, Nvidia stock is down nearly 20% in the year to date.
So, can Nvidia stage a turnaround? An analyst at Citi believes it can.
Reiterating his “Buy” rating on Nvidia with a price target of $163 (+51% upside potential from current levels), Citi analyst Atif Malik said “While risk-reward looks attractive on the stock with stock trading below historical troughs, we believe investors are looking for the clearance event on the overhang from the AI restrictions and tariff impact to gross margins. Maintain Buy.”
What is making the analyst so bullish on NVDA?
Nvidia Posts Solid Q4 Results
One of the reasons for the slide in Nvidia’s share price so far this year has been its latest quarterly results. Although Nvidia posted record results for its fiscal fourth quarter of 2025 that beat revenue and earnings estimates, it seems investors wanted even “more.”
The company continued on its spree of reporting record quarterly revenues with Q4 revenues coming in at $39.3 billion, an uptick of 78% from the prior year. Core data center revenues went up by an even sharper 93% in the same period to $35.6 billion.
Earnings shot up by 71% from the year-ago period to $0.89 as this marked the ninth consecutive quarter of earnings beats from the company.
However, a drop in gross margins to 73.5% from 76.7% in the prior year is an indicator that Nvidia is also starting to feel the competitive pressure from its peers.
Net cash from operating activities for the quarter came in at $16.6 billion, up from $11.5 billion in the previous year. Overall, the company closed the quarter with a cash balance of $43.2 billion with no short-term debt on its books, reflecting a strong liquidity position.
Long-Term Growth Story Intact
Nvidia has cemented itself as the dominant force in the AI chip industry, a position that is only poised to strengthen as hyperscalers like Microsoft (MSFT), Amazon (AMZN), Google (GOOGL), and Meta (META) ramp up their AI-driven capital expenditures. This spending is projected to surge to $335 billion this year, a significant leap from 2024 levels and more than double the approximately $150 billion allocated in 2023. Given the scale of this investment, Nvidia stands to benefit immensely, as a substantial portion of these funds will likely flow directly into its revenue stream.
Nvidia is also expected to be a leader in the next wave of AI advancements in fields such as robotics, autonomous vehicles, finance, and healthcare. Nvidia’s approach involves designing intricate environments where AI agents — models capable of autonomous decision-making — can interact dynamically to generate new data, observations, and refined learning outcomes. This iterative process accelerates AI evolution and strengthens Nvidia’s foothold in emerging technologies.
Plus, demand for Nvidia’s core data center segment continues to expand rapidly, as evidenced by the substantial contribution of its H100 GPU and Blackwell platform, which generated $11 billion in revenue in Q4. These figures highlight how Nvidia is capitalizing on the rising need for AI infrastructure, with its GPUs and CUDA software stack playing a pivotal role in powering machine learning applications. As AI adoption accelerates, Nvidia remains at the heart of this transformation, supplying the essential computational resources that drive innovation across industries.
Analyst Opinion on NVDA Stock
Thus, analysts have deemed Nvidia stock a “Strong Buy” with a mean target price of $177.59 which denotes upside potential of about 65% from current levels. Out of 44 analysts covering the stock, 38 have a “Strong Buy” rating, two have a “Moderate Buy” rating and four have a “Hold” rating.
