Nvidia’s stock might be cooling off — down slightly on Tuesday and only up 2% in 2025 so far — but that hasn’t shaken confidence at Jefferies. The firm just named Nvidia a top stock pick, saying profit margins could soon explode to as high as 80%.
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To understand why, you have to look beyond the ticker and into the machine that’s powering one of the most important economic shifts in a generation: the rise of AI compute.
NVDA Stock Dip Doesn’t Rattle Believers
Nvidia (NVDA) stock edged down 0.3% on Tuesday morning, slipping to $136.98. It’s not a collapse — in fact, the stock is still up around 2% for the year. But in a market obsessed with Nvidia’s explosive run since 2023, any sign of a slowdown tends to spook some investors.
What’s behind the latest pause? Trade tensions between the U.S. and China are back in the headlines, bringing semiconductor names into the political firing line. But this week’s movement may be more about noise than fundamentals.
Because under the surface, Nvidia is transforming from a leading chipmaker into the backbone of a global AI economy.
Why Jefferies Is All In on Nvidia
Despite the minor dip, Jefferies analyst Blayne Curtis just added Nvidia to the firm’s list of “highest conviction” stock picks. Why? In his view, the ramp-up of Nvidia’s next-gen Blackwell chips is about to change the game.
Jefferies believes Nvidia’s gross margins could explode from 61% to as high as 80% this year as Blackwell demand kicks in. To put that into perspective: margins like that are almost unheard of in hardware — and they suggest Nvidia’s pricing power remains sky-high.
That’s not just about fancy silicon. It’s about software, systems, and scale. Nvidia isn’t just selling chips anymore — it’s becoming a one-stop AI infrastructure provider. And customers from hyperscalers to hedge funds are lining up.
Economics 101: Scarcity Meets Insatiable Demand
To understand Nvidia’s power, you need to understand the economics of compute. We’re in the middle of an AI arms race, and Nvidia owns the shovels.
Supply is constrained — fabrication of cutting-edge chips like Blackwell depends on global supply chains and limited capacity at foundries like TSMC. Demand, on the other hand, keeps ballooning.
Every new AI model, every inference engine, every data center upgrade requires more compute. That means more GPUs. And right now, Nvidia dominates that stack.
The result is that Nvidia can set prices, shape product timelines, and command entire segments of the AI value chain — from the chips themselves to the CUDA software ecosystem that keeps developers loyal.
Why Some Investors Are Nervous Anyway
So why the hesitation in the stock? Some of it’s macro. Tariff talk between the U.S. and China has reignited fears about chip restrictions. Nvidia earns a chunk of its revenue from Chinese customers, so export limits always pose a risk.
There’s also the simple truth that Nvidia has already run. The stock surged 239% in 2023 alone, and even believers know the easy money might be behind us.
Add in competition from AMD (AMD) (which was also down 0.5% on Tuesday), Broadcom (AVGO), and Qualcomm (QCOM), and you get a market that wants confirmation before bidding NVDA up even further.
Nvidia Isn’t a Graphics Card Company Anymore
Nvidia today is not the Nvidia of 2017. This isn’t about gaming GPUs and flashy product launches. It’s about infrastructure, enterprise software, and the buildout of a $100 billion+ AI market.
Gross margins closing in on 80%? That’s Apple-level profitability — in a space where demand isn’t just steady, it’s exponential.
If you zoom out, Nvidia’s short-term dips look more like breathing room than red flags. And analysts like Blayne Curtis are betting this is only the beginning of a bigger structural shift.
Is Nvidia a Buy, Sell, or Hold?
Wall Street is still leaning heavily bullish on Nvidia (NVDA). Based on the latest TipRanks data, 36 out of 41 analysts rate the stock a Buy, with four rating it Hold, and just one suggesting a Sell. That gives Nvidia a consensus rating of Strong Buy.
The average 12-month NVDA price target now sits at $171.62, suggesting nearly 25% upside from current levels.
