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Nvidia (NVDA) released its fiscal Q1 2025 earnings earlier this week, and yet again impressed markets with its quarterly report. The company added $200 billion to its market cap on Thursday - which, for context, is over 1.5x Intel’s (INTC) market cap.
Previously, the company had added a record $277 billion to its market cap after its fiscal Q4 earnings release in February. The Jensen Huang-led company has been hitting one milestone after another, and its market cap is now above $2.5 trillion. For context, Nvidia became a $1 trillion company only as recently as last year, and its valuation exploded past $2 trillion earlier this year.
The breathtaking rally has pushed the company to announce a 10-for-1 stock split after its shares rose 25-fold over the last five years. Nvidia has been a stellar growth story, and it's the only “Magnificent 7” company that’s reporting triple-digit growth in its topline.
What’s next for Nvidia stock as the company’s growth continues to impress markets? We’ll discuss in this article, beginning with a snapshot of its fiscal Q1 earnings.
Nvidia Reports Another Stellar Earnings Beat
Ahead of Nvidia’s fiscal Q1 earnings report, Julian Emanuel, Evercore ISI’s senior managing director of equity, derivatives, and quantitative strategy said that Nvidia beating on both the topline and bottom line in the upcoming earnings is the “worst kept secret in Corporate America.”
There is some merit in this argument, as Nvidia's earnings have easily surpassed its internal forecasts (which, like most other companies, tend to be conservative), as well as analysts’ estimates.
However, markets don’t expect “just” an earnings beat from Nvidia, and there have been instances when it has fallen even after beating estimates handsomely.
Looking at Nvidia’s fiscal Q1 earnings, it reported revenues of $26.04 billion, which easily surpassed the $24.65 billion that analysts expected. The company’s earnings per share (EPS) came in at $6.12 - again, much higher than the consensus estimate of $5.59.
Nvidia guided for revenues of $28 billion at the midpoint in the current quarter, which was well ahead of the $26.7 billion that analysts were modeling.
AI Growth Story Continues Unabated
Even more importantly, Nvidia dispelled fears about its growth outlook, especially as it transitions to the new Blackwell chips. In response to an analyst observation that Nvidia would realize revenue from sales of these chips in 2024, Huang said, “We will see a lot of Blackwell revenue this year.”
During the earnings call, Nvidia cited the example of Big Tech companies like Meta Platforms (META) and Tesla (TSLA) using its chips for their AI initiatives. Notably, Big Tech companies have opened their coffers towards AI capex, which would suggest higher spending on Nvidia’s chips, among others.
According to Nvidia CFO Colette Kress, cloud providers are seeing “immediate and strong return” on their AI investments. She stressed, “For every $1 spent on NVIDIA AI infrastructure, cloud providers have an opportunity to earn $5 in GPU instant hosting revenue over 4 years.”
The company sees demand outstripping supply for its AI chips as Big Tech companies, as well as up to 20,000 startups, scramble to buy them amid the AI euphoria.
NVDA Stock Forecast
If Nvidia beating earnings estimates is one Wall Street's “worst kept secrets,” brokerages rushing to raise their target prices on NVDA after earnings is another. As has been the case for the last several quarters, analysts went overboard with raising Nvidia’s target price, even as the shares topped $1,000 following the report.
Looking at some of the notable analyst actions, Benchmark analyst Cody Acree raised his target price from $1,000 to $1,320, while Bank of America’s Vivek Arya raised his from $1,100 to $1,320.
Currently, Nvidia’s Street-high target price of $1,400 comes from Rosenblatt, which is almost 33% higher than Friday’s closing prices. The stock continues to have a consensus rating of “Strong Buy” from analysts, as Wall Street is mesmerized by its jaw-dropping growth story.
What’s Next for Nvidia Stock?
Nvidia has been hitting one record after the other, and it’s been tough to keep count. The next two milestones to watch out for would be the company hitting a $3 trillion market cap, and then possibly outflanking Microsoft (MSFT) to become the biggest company in the world.
NVDA trades at a next 12 months (NTM) price-to-earnings multiple of nearly 40x, which is the second-highest among Magnificent 7 stocks. Tesla, of course, has the highest multiple, as the company’s profit margins have tanked due to the price war.
Meanwhile, Nvidia is a stellar growth story, and is the biggest benefactor from the AI investment boom. For now, there is nothing to suggest that the demand for its AI chips will come down anytime soon, or that the competition can come up with matching products to undercut Nvidia.
On the date of publication, Mohit Oberoi had a position in: NVDA , TSLA , MSFT , INTC , META . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
