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Artificial intelligence (AI) is proving to be a transformative force across industries, from cloud computing to retail, advertising, and factory automation, and we’re still only at the dawn of this tech revolution. Nvidia Corporation (NVDA), with its unmatched expertise in high-performance GPUs, has become the poster child of this AI boom.
Major players are pouring billions into AI infrastructure, fueling Nvidia’s rise. Microsoft (MSFT) is reportedly the largest buyer of Nvidia’s Blackwell GPUs, having committed $20 billion to capital expenditures in fiscal Q1 2025 toward AI infrastructure, following a hefty $55.7 billion last year.
Amazon (AMZN) isn’t far behind, earmarking $30.5 billion for AI investments in the first half of 2024, with a total projected spend of $75 billion for the year. Meta (META), focused on building its own AI data centers, plans to pump $40 billion into infrastructure this year alone.
With such powerful clients on its roster, Nvidia is on a steep growth trajectory. With Nvidia’s Q3 earnings release set for this Wednesday, here's why Wall Street's excitement is still on the rise for this AI powerhouse.
About Nvidia Stock
Santa Clara-based Nvidia Corporation (NVDA), founded in 1993, has become the undisputed leader in the semiconductor space, now boasting a jaw-dropping $3.6 trillion market cap. Dominating 80% of the AI chip market, Nvidia’s CUDA software sets the bar for GPU programming, powering everything from data centers to automotive tech. As AI propels the company forward, Nvidia is reshaping the tech landscape.
In just over two years, Nvidia’s stock has surged about 750%, making it the world’s most valuable company. Driving this rise is its unmatched position in AI, with tech innovation and AI-led growth propelling the company toward even greater success.
NVDA’s 2024 stock performance has been nothing short of explosive, soaring 185.9%, fueled by surging demand for its AI-driven graphics cards. Outpacing the returns of the S&P 500 Index ($SPX) and the iShares Semiconductor ETF (SOXX) over the past year, shares of Nvidia recently hit an all-time high of $149.77 on Nov. 8.
In Q2 2025, Nvidia returned $7.5 billion to shareholders through repurchases and dividends. The chip giant continued its 11-year dividend streak, paying $0.01 per share on Oct. 3. With an annualized dividend of $0.04 and a modest 0.03% yield, Nvidia’s 1.04% payout ratio highlights its commitment to growth.
Valuation-wise, Nvidia trades at a hefty 51.39 times forward adjusted earnings, far above the tech sector median. However, its price/earnings-to-growth (PEG) ratio of 1.45 is a discount to both the broader sector and its own historical average, which suggests that NVDA is still reasonably valued relative to its expected growth forecasts.
Nvidia Beats Q2 Earnings Forecasts
Nvidia reported its Q2 2025 earnings on Aug. 28, with revenue skyrocketing to $30 billion, up 122.4% annually to surpass consensus estimates. It achieved record highs as global data centers ramped up modernization with accelerated computing and generative AI, fueling demand for Nvidia’s products. Adjusted EPS soared 152% to $0.68, also exceeding projections.
The data center division alone pulled in $26.3 billion, marking a 16% sequential increase and a 154% annual surge. This growth reflects Nvidia's role as a powerhouse supplier to cloud service providers and major players across consumer, internet, and enterprise sectors.
On the financial side, Nvidia’s net operating cash surged to $14.5 billion, doubling last year’s figure, while its cash reserves stood at a robust $34.8 billion. The company holds minimal debt, thanks to its fabless model.
Nvidia Q3 Earnings Preview
Nvidia is all set for its Q3 earnings release on Nov. 20 after the closing bell, projecting a solid $32.5 billion in revenue - an 8.2% sequential jump and an impressive 79.4% annual rise. While this marks a slowdown from the triple-digit growth in earlier quarters, that’s to be expected as Nvidia’s revenue base expands.
The data center segment remains a key driver, fueling growth. Though margins might face pressure from new product shifts in the data center mix, Nvidia’s bottom line is expected to see a notable boost from rising sales, keeping its growth momentum strong despite the pace slowing.
Nvidia is gearing up to release its next-generation Blackwell architecture in Q4, which is anticipated to drive billions in future revenue. Already in high demand, this architecture is so sought-after that some clients are prepared to wait until next year for its unparalleled capabilities.
Analysts expect Nvidia’s Q3 EPS to rise 84.2% year over year to $0.74, while the revenue consensus of $33 billion hovers slightly above the midpoint of management’s own guidance. Looking ahead, fiscal 2025 EPS is projected to climb 125.4% to $2.66 per share, with another 35% increase to $3.59 in fiscal 2026.
Wall Street Gets More Bullish on NVDA Stock
Nvidia has long been a Wall Street favorite, and analysts are raising the bullish ante ahead of earnings this week.
Redburn-Atlantic just initiated coverage with a fresh "Buy" rating on NVDA and a target price of $178, with a team of analysts led by Timm Schulze-Melander predicting a “sustainable” 65% EBIT margin as AI adoption accelerates over the next decade, driven by cost advantages.
Other analysts are equally bullish, with price-target hikes rolling in from Mizuho, UBS, Melius, Jefferies, and Oppenheimer, among others, in the lead-up to Q3 earnings. Most notably, HSBC’s Frank Lee raised NVDA’s target to a Street-high of $200, declaring that the “AI train is back on track.”
Analysts are all-in on Nvidia, with a solid “Strong Buy” consensus rating. Out of the 43 analysts in coverage, 37 recommend a “Strong Buy,” two advise a “Moderate Buy,” and four analysts maintain a “Hold” rating.
The mean price target of $155.43 suggests an upside potential of 9.5% from the current price levels. The Street-high target of $200 implies that NVDA could rally as much as 40.9%.
