/Nvidia%20logo%20and%20sign%20on%20headquarters%20by%20Michael%20Vi%20via%20Shutterstock.jpg)
For the better part of the past three years, chip giant Nvidia (NVDA) has been in the spotlight as investors have flocked to perhaps the biggest beneficiary of the artificial intelligence (AI) megatrend. Following a jaw-dropping rally of 1,371% over five years and its dominant position in the AI chip market, Nvidia showed no signs of slowing down.
That is, until a Chinese upstart by the name of DeepSeek and President Donald Trump’s tariffs strategy put an untimely halt to the Nvidia freight train. Now down 18% on a YTD basis, will the Nvidia trade unravel?
About Nvidia Stock
Nvidia specializes in GPUs, AI platforms, and high-performance computing solutions. Its products serve various sectors, including gaming, data centers, automotive, and professional visualization. Further, the company’s CUDA programming model has been instrumental in advancing AI research and applications.
With a market capitalization of $2.6 trillion, Nvidia is one of the most valuable companies in the world.
As a result, the recent dip in the company’s share price has presented itself as a golden opportunity for both investors who missed the Nvidia bull run earlier and for those who are looking to increase the stock’s weighting in their portfolios. Why? Let’s have a closer look.
Fundamentals: As Solid As It Gets
Nvidia has reached such a stage where merely beating Street estimates won’t be enough for the company. The company will have to do something “more.”
That is why, despite Nvidia surpassing expectations in both revenue and earnings for the fourth quarter of its fiscal 2025, the company’s shares have faced downward pressure this year. The market’s reaction suggests that, although the numbers were strong, investors were likely anticipating an even more spectacular performance.
Quarterly revenue hit a new record at $39.3 billion, marking a sharp 78% increase from the same period a year earlier. Within that, Nvidia’s data center segment stood out with an impressive 93% year-over-year jump, reaching $35.6 billion, underscoring its central role in the company’s overall growth trajectory.
Earnings per share climbed 71% from the prior year to $0.89, making it the ninth straight quarter in which Nvidia has delivered earnings above consensus estimates. Still, not all metrics moved in the same direction. Gross margins narrowed to 73.5%, down from 76.7% a year ago, indicating that rising competitive pressures may be starting to leave their mark.
In terms of cash generation, Nvidia delivered robust results. Net cash flow from operations rose to $16.6 billion for the quarter, compared to $11.5 billion during the same period last year. The company exited the quarter with a formidable $43.2 billion in cash reserves and had no short-term debt, reflecting a sound liquidity position that continues to offer strategic flexibility.
Outlook Stays Strong
As a callback to my previous analysis, the ongoing surge in capital investments toward AI infrastructure by tech giants such as Microsoft (MSFT), Amazon (AMZN), Meta (META), and Google (GOOGL) is expected to maintain the momentum in demand for Nvidia’s advanced processors. Central to this trend is the growing need for generative AI systems — an area where Nvidia remains the dominant supplier. Its Blackwell and H100 GPUs are at the forefront of enabling complex training and inference operations across a range of applications, including hyperscaler AI clusters, enterprise adoption, and sovereign infrastructure. The fact that the Blackwell platform generated $11 billion in revenue in just its first quarter underlines Nvidia’s comprehensive leadership not just in chipmaking, but in delivering the foundation for entire AI computing facilities.
At the GTC 2025 event, Nvidia revealed additional efforts to entrench this dominance through the introduction of its next-generation networking switch architectures. These innovations represent a leap in bandwidth capabilities. They promise to minimize energy loss while allowing immense clusters of GPUs to coordinate with exceptional efficiency.
Through its expansive integration of software, networking, silicon, and cloud services, Nvidia is increasingly being viewed as the foundational infrastructure for AI-driven computing. The company has evolved far beyond a semiconductor provider; it is now building and orchestrating the operating backbone of the AI revolution.
Overall, even after showcasing such tremendous growth rates in recent years, analysts are still forecasting Nvidia’s revenue and earnings to grow at a much faster clip than the industry. Its forward revenue and earnings growth rates are pegged at 60.38% and 66.24% compared to the sector medians of 6.68% and 10.73%.
Analyst Opinions on NVDA Stock
Thus, analysts have deemed Nvidia stock a “Strong Buy” with a mean target price of $175.05, which denotes upside potential of about 62% from current levels. Out of 43 analysts covering the stock, 37 have a “Strong Buy” rating, two have a “Moderate Buy” rating, and four have a “Hold” rating.
