Nvidia (NVDA) AI Stock Analysis

• Market Cap: $4.89T
• Dividend Yield: 0.02%
• Average Volume (3M): 173.87M
• Price to Earnings (P/E): 57.2
• Beta (1Y): 2.27
• Revenue Growth: 71.55%
• EPS Growth: 64.54%
• Country: US
• Employees: 36,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 1.05
• Shares Outstanding: 24,300,000,000
• 10 Day Avg. Volume: 158,364,619
• 30 Day Avg. Volume: 173,871,818
• PEG Ratio: 0.28
• Price to Book (P/B): 37.17
• Price to Sales (P/S): 22.59
• P/FCF Ratio: 48.45
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 33.44
• Enterprise Value/Gross Profit: 48.57
• Enterprise Value/Ebitda: 56.99
• 1Y Price Target: $225.00
• Price Target Upside: 11.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 37

• Rating: 85 Outperform
• Price Target: $236.00 ▲(17.40% Upside)

Nvidia's strong financial performance and positive earnings call are the most significant factors driving the high stock score. The company's robust growth in AI and data center segments, despite geopolitical challenges, positions it well for future expansion. Technical indicators show bullish momentum, although high valuation metrics suggest caution.

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 Business Overview & Revenue Model

Company Description

NVIDIA 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 Money

Nvidia 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 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

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

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

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	125.89B	130.50B	60.92B	26.97B	26.91B	16.68B
Gross Profit	86.68B	97.86B	44.30B	15.36B	17.48B	10.40B
EBITDA	73.88B	86.14B	35.58B	5.99B	11.35B	5.69B
Net Income	64.51B	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	56.47B	60.85B	27.02B	3.81B	8.13B	4.69B
Operating Cash Flow	60.41B	64.09B	28.09B	5.64B	9.11B	5.82B
Investing Cash Flow	-16.69B	-20.42B	-10.57B	7.38B	-9.83B	-19.68B
Financing Cash Flow	-40.13B	-42.36B	-13.63B	-11.62B	1.86B	3.80B

Nvidia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 201.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 201.03 is above the 20-day moving average (MA) of 185.87, above the 50-day MA of 180.19, and above the 200-day MA of 147.14, indicating a bullish trend. The MACD of 2.69 indicates Negative momentum. The RSI at 69.42 is Neutral, neither overbought nor oversold. The STOCH value of 92.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NVDA.

Nvidia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVDA	―	$4.89T	57.22	109.42%	0.02%	71.55%	64.54%
ASML	―	$403.67B	39.38	51.72%	0.64%	24.91%	39.95%
TSM	―	$1.25T	30.90	34.89%	0.97%	39.73%	―
AVGO	―	$1.76T	95.29	27.08%	0.65%	28.01%	235.66%
AMD	―	$418.71B	148.51	4.70%	―	27.17%	108.67%
TXN	―	$151.66B	30.45	29.60%	3.21%	9.90%	1.65%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%