Nvidia (NVDA) AI Stock Analysis

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Nvidia

(NASDAQ:NVDA)

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Outperform 81 (OpenAI - 4o)

Rating:81Outperform

Price Target:

$204.00

▲(11.99% Upside)

Nvidia's strong financial performance and positive earnings call are the most significant factors driving the score. The company's robust revenue growth and profitability, along with strategic positioning in AI infrastructure, support a high score. However, high valuation metrics and geopolitical risks slightly temper the overall outlook.

Positive Factors

AI Infrastructure Opportunities

Nvidia's strategic positioning in AI infrastructure presents significant long-term growth opportunities, as the company is poised to benefit from the massive projected spending in AI infrastructure by the decade's end.

Strong Revenue Growth

Nvidia's record revenue achievement indicates robust demand across its market platforms, reflecting the company's strong market position and the effectiveness of its growth strategies.

Investment in AI Ecosystem

This investment will foster economic growth and innovation in AI, enhancing Nvidia's influence and market presence in the AI sector, which is crucial for long-term competitiveness.

Negative Factors

Geopolitical Challenges

Geopolitical challenges, particularly in China, pose risks to Nvidia's revenue, as they may affect the company's ability to conduct business and expand in key markets.

Increase in Operating Expenses

Rising operating expenses could pressure margins and profitability, potentially impacting Nvidia's financial flexibility and ability to invest in growth initiatives.

Regulatory Focus in China

Increased regulatory scrutiny in China could limit Nvidia's market access and growth potential in a crucial region, affecting long-term strategic plans.

Nvidia (NVDA) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.38T

Dividend Yield0.02%

Average Volume (3M)174.99M

Price to Earnings (P/E)51.8

Beta (1Y)2.28

Revenue Growth71.55%

EPS Growth64.54%

CountryUS

Employees36,000

SectorTechnology

Sector Strength88

IndustrySemiconductors

Share Statistics

EPS (TTM)1.05

Shares Outstanding24,300,000,000

10 Day Avg. Volume179,275,740

30 Day Avg. Volume174,985,481

Financial Highlights & Ratios

PEG Ratio0.27

Price to Book (P/B)36.66

Price to Sales (P/S)22.28

P/FCF Ratio47.78

Enterprise Value/Market Cap0.96

Enterprise Value/Revenue25.48

Enterprise Value/Gross Profit36.48

Enterprise Value/Ebitda42.23

Forecast

1Y Price Target

$225.00

Price Target Upside23.52% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering37

Nvidia Business Overview & Revenue Model

Company DescriptionNVIDIA Corporation provides graphics, and compute and networking solutions in the United States, Taiwan, China, and internationally. The company's Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building 3D designs and virtual worlds. Its Compute & Networking segment provides Data Center platforms and systems for AI, HPC, and accelerated computing; Mellanox networking and interconnect solutions; automotive AI Cockpit, autonomous driving development agreements, and autonomous vehicle solutions; cryptocurrency mining processors; Jetson for robotics and other embedded platforms; and NVIDIA AI Enterprise and other software. The company's products are used in gaming, professional visualization, datacenter, and automotive markets. NVIDIA Corporation sells its products to original equipment manufacturers, original device manufacturers, system builders, add-in board manufacturers, retailers/distributors, independent software vendors, Internet and cloud service providers, automotive manufacturers and tier-1 automotive suppliers, mapping companies, start-ups, and other ecosystem participants. It has a strategic collaboration with Kroger Co. NVIDIA Corporation was incorporated in 1993 and is headquartered in Santa Clara, California.

How the Company Makes MoneyNvidia generates revenue primarily through the sale of its GPUs and related hardware across various sectors. The gaming segment is a significant revenue driver, with high demand for GeForce GPUs among gamers and PC builders. The data center segment has seen substantial growth, fueled by the increasing need for AI processing power and cloud computing services, where Nvidia's GPUs are used for machine learning tasks. Additionally, Nvidia earns revenue from its professional visualization products, which cater to industries such as architecture and design. The company also engages in strategic partnerships, such as collaborations with cloud service providers and OEMs, which enhance its market penetration and expand its customer base. Furthermore, Nvidia has been investing in software solutions and AI-driven services, creating new revenue streams that complement its hardware offerings, thereby contributing to its overall earnings.

Nvidia Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue from various business segments, indicating which areas are contributing most to Nvidia’s top line and where strategic focus might be needed.

Chart InsightsNVIDIA's data center segment is experiencing explosive growth, with revenue surging due to strong demand for AI infrastructure, particularly from its Blackwell architecture. Despite challenges from export controls affecting the China market, the company is positioned well with a strategic focus on AI solutions. Gaming revenue also shows robust growth, setting a new record. However, the automotive segment faces headwinds, with a slight sequential decline. NVIDIA's strategic initiatives and capital returns underscore its confidence in navigating market challenges and capitalizing on AI-driven opportunities.

Data provided by:

Main Street Data

Nvidia Earnings Call Summary

Earnings Call Date:Aug 27, 2025

(Q2-2026)

% Change Since: |

Next Earnings Date:Nov 19, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong quarter marked by record revenue and significant growth in data center, networking, and gaming sectors. However, geopolitical challenges in China and increased operating expenses present some concerns. Overall, the positive aspects significantly outweigh the negative ones.

Q2-2026 Updates

Positive Updates

Record Revenue Achievement

Total revenue reached $46.7 billion, exceeding outlook with a sequential growth across all market platforms.

Data Center Revenue Growth

Data Center revenue increased by 56% year over year, despite a $4 billion decline in H20 revenue.

Blackwell Platform Success

Blackwell platform achieved record levels, with a sequential growth of 17%.

AI Infrastructure Opportunities

Projected $3 to $4 trillion in AI infrastructure spend by the end of the decade, signaling significant long-term growth opportunities.

Networking Revenue Surge

Networking delivered a record revenue of $7.3 billion, a 46% sequential and 98% year-on-year increase.

Gaming Revenue Growth

Gaming revenue was a record $4.3 billion, a 14% sequential increase and a 49% jump year on year.

Sovereign AI Expansion

Over $20 billion in Sovereign AI revenue anticipated this year, more than double that of last year.

AI Platform Leadership

NVIDIA's AI platforms, including Blackwell and Rubin, are scaling into the global AI factory build-out through the end of the decade.

Negative Updates

Geopolitical Challenges in China

Issues with licensing and geopolitical uncertainties impacting the ability to ship H20, potentially affecting $2 to $5 billion in Q3 revenue.

Increase in Operating Expenses

GAAP operating expenses rose 86% on a non-GAAP basis sequentially, driven by higher compute and infrastructure costs.

Company Guidance

During NVIDIA Corporation's Second Quarter Fiscal 2026 Financial Results Conference Call, Colette Kress, the executive vice president and CFO, reported a record quarter with total revenue hitting $46.7 billion, surpassing outlook expectations. The data center segment saw a 56% year-over-year growth, despite a $4 billion decline in H20 revenue. The Blackwell platform achieved record levels with a 17% sequential growth, and production shipments of GB300 commenced in Q2. NVIDIA anticipates $3 to $4 trillion in AI infrastructure spending by the decade's end, presenting significant long-term growth opportunities. The company has achieved a 10x improvement in energy efficiency per token with the GV300 NDL72 AI factories compared to the Hopper generation. The Rubin platform is on schedule for volume production next year, with multiple components, including the Vera CPU and Rubin GPU, in fabrication. For Q3, NVIDIA projects a total revenue of $54 billion, with a plus or minus 2% variance, and expects non-GAAP gross margins to be around 73.5%. The company's focus is on addressing geopolitical issues, particularly regarding H20 sales to China, and it continues to advocate for US government approval to sell the Blackwell platform in China.

Nvidia Financial Statement Overview

Summary

Nvidia demonstrates outstanding financial health with strong revenue growth, high profitability, and a robust balance sheet. Despite a minor dip in free cash flow growth, the company's financial position remains strong, positioning it well for future growth and stability in the competitive semiconductor industry.

Income Statement

Very Positive

Nvidia's income statement shows strong financial performance with a significant revenue growth rate of 11.25% TTM, indicating robust demand and market expansion. The company maintains high profitability with a gross profit margin of 69.85% and a net profit margin of 52.41% TTM, showcasing efficient cost management and strong pricing power. The EBIT and EBITDA margins are also impressive at 42.14% and 60.34% TTM, respectively, reflecting operational efficiency and effective cost control.

Balance Sheet

Very Positive

Nvidia's balance sheet is solid with a low debt-to-equity ratio of 0.10 TTM, indicating prudent financial leverage and a strong equity base. The return on equity is exceptionally high at 105.22% TTM, demonstrating effective use of shareholders' funds to generate profits. The equity ratio stands at 71.14% TTM, highlighting a strong capital structure with significant equity financing.

Cash Flow

Very Positive

Nvidia's cash flow statement reveals a slight decline in free cash flow growth at -5.70% TTM, which could be a point of concern. However, the operating cash flow to net income ratio of 3.18 TTM indicates strong cash generation relative to earnings. The free cash flow to net income ratio of 93.49% TTM suggests that the company effectively converts its earnings into cash, supporting its liquidity and investment capabilities.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	165.22B	130.50B	60.92B	26.97B	26.91B	16.68B
Gross Profit	115.40B	97.86B	44.30B	15.36B	17.48B	10.40B
EBITDA	99.70B	86.14B	35.58B	5.99B	11.35B	5.69B
Net Income	86.60B	72.88B	29.76B	4.37B	9.75B	4.33B
Balance Sheet
Total Assets	140.74B	111.60B	65.73B	41.18B	44.19B	28.79B
Cash, Cash Equivalents and Short-Term Investments	56.79B	43.21B	25.98B	13.30B	21.21B	11.56B
Total Debt	10.60B	10.27B	11.06B	12.03B	11.83B	7.72B
Total Liabilities	40.61B	32.27B	22.75B	19.08B	17.57B	11.90B
Stockholders Equity	100.13B	79.33B	42.98B	22.10B	26.61B	16.89B
Cash Flow
Free Cash Flow	72.02B	60.85B	27.02B	3.81B	8.13B	4.69B
Operating Cash Flow	77.03B	64.09B	28.09B	5.64B	9.11B	5.82B
Investing Cash Flow	-23.89B	-20.42B	-10.57B	7.38B	-9.83B	-19.68B
Financing Cash Flow	-50.08B	-42.36B	-13.63B	-11.62B	1.86B	3.80B

Nvidia Technical Analysis

Technical Analysis Sentiment

Positive

Last Price182.16

Price Trends

50DMA

179.50

Positive

100DMA

170.70

Positive

200DMA

146.33

Positive

Market Momentum

MACD

0.63

Positive

RSI

50.43

Neutral

STOCH

26.74

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVDA, the sentiment is Positive. The current price of 182.16 is below the 20-day moving average (MA) of 184.26, above the 50-day MA of 179.50, and above the 200-day MA of 146.33, indicating a neutral trend. The MACD of 0.63 indicates Positive momentum. The RSI at 50.43 is Neutral, neither overbought nor oversold. The STOCH value of 26.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NVDA.

Nvidia Risk Analysis

Nvidia disclosed 23 risk factors in its most recent earnings report. Nvidia reported the most risks in the "Tech & Innovation" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Nvidia Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TSM	82 Outperform	$1.25T	30.18	34.89%	1.00%	39.73%	―
NVDA	81 Outperform	$4.38T	51.85	109.42%	0.02%	71.55%	64.54%
ASML	81 Outperform	$385.87B	38.78	51.72%	0.65%	24.91%	39.95%
AVGO	79 Outperform	$1.61T	87.96	27.08%	0.69%	28.01%	235.66%
AMD	72 Outperform	$373.63B	135.26	4.70%	―	27.17%	108.67%
TXN	72 Outperform	$155.20B	31.42	29.60%	3.16%	9.90%	1.82%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

NVDA

Nvidia

182.16

40.66

28.73%

AMD

Advanced Micro Devices

234.99

78.76

50.41%

ASML

ASML Holding

1,036.41

330.77

46.88%

AVGO

Broadcom

344.29

172.97

100.96%

TSM

TSMC

290.73

89.49

44.47%

TXN

Texas Instruments

172.19

-28.70

-14.29%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 19, 2025