Nvidia (NVDA) AI Stock Analysis

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Nvidia

(NASDAQ:NVDA)

83Outperform

Nvidia's overall stock performance is strong, driven by exceptional financial metrics and a positive earnings call outlook. While technical analysis shows some near-term challenges, and the valuation suggests potential overvaluation, the company's robust growth and strategic positioning in the semiconductor industry underpin its high score.

Positive Factors

Market Position

The buy recommendation is maintained, reflecting confidence in Nvidia's market position despite some adjustments to future projections.

Technology Leadership

Nvidia's technology leadership and AI GPU price in-elasticity are expected to help partially pass down the increased GPU cost that may emanate from the trade war.

Negative Factors

Capital Expenditure Concerns

There are concerns about Microsoft capital expenditure and a higher risk of a pause in enterprise investments amid uncertainty around the global economy due to an ongoing trade war.

Earnings Upside Potential

Limited GPU pricing power going forward caps earnings upside potential until opportunities evolve in robotics, autos AI markets.

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

Market Cap

$2.71T

Dividend Yield0.04%

Average Volume (3M)331.13M

Price to Earnings (P/E)37.8

Beta (1Y)2.33

Revenue Growth114.20%

EPS Growth146.26%

CountryUS

Employees36,000

SectorTechnology

Sector Strength51

IndustrySemiconductors

Share Statistics

EPS (TTM)2.94

Shares Outstanding24,400,000,000

10 Day Avg. Volume406,004,873

30 Day Avg. Volume331,131,651

Financial Highlights & Ratios

PEG Ratio0.26

Price to Book (P/B)N/A

Price to Sales (P/S)22.01

Price to Cash Flow (P/CF)43.20

P/FCF Ratio43.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$174.00

Price Target Upside56.86% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering41

Nvidia Business Overview & Revenue Model

Company DescriptionNvidia Corporation (NVDA) is a leading technology company primarily engaged in designing and manufacturing graphics processing units (GPUs) for gaming, professional visualization, data centers, and automotive markets. Founded in 1993 and headquartered in Santa Clara, California, Nvidia has pioneered developments in computer graphics and parallel computing, extending its reach into sectors like artificial intelligence (AI) and high-performance computing (HPC). Its core products include GPUs under the GeForce brand for gaming, the Quadro brand for professional graphics, the Tesla and DGX brands for AI data centers, and DRIVE platform for autonomous vehicles.

How the Company Makes MoneyNvidia generates revenue through the sale of its GPUs and related hardware, software, and services. The company's primary revenue streams include its Gaming segment, which sells GeForce GPUs for gaming and gaming laptops, and the Data Center segment, where it provides powerful computing solutions for AI, deep learning, and data analytics. Additional revenue comes from the Professional Visualization segment, which targets industries requiring high-end graphics capabilities, and the Automotive segment, which offers AI-based solutions for autonomous driving and in-car infotainment systems. Nvidia also earns through licensing its technology and forming strategic partnerships with leading tech companies, contributing to its sustained growth and innovation in the AI and HPC markets.

Nvidia Financial Statement Overview

Summary

Nvidia's financial performance is exceptional, demonstrating strong growth, profitability, and stability. The income statement reflects significant revenue and profit growth, the balance sheet shows a strong equity foundation and minimal leverage, and cash flow metrics indicate excellent cash generation and management.

Income Statement

Very Positive

Nvidia's income statement demonstrates robust financial health. The gross profit margin of 75.0% (2025) indicates strong production efficiency. The net profit margin surged to 55.8%, reflecting excellent cost management. Revenue growth is exceptional, with a 114.2% increase from 2024 to 2025, showcasing rapid expansion. EBIT and EBITDA margins are also impressive at 62.4% and 65.6%, respectively, highlighting operational efficiency and profitability.

Balance Sheet

Very Positive

The balance sheet is solid, with a debt-to-equity ratio of 0.13, indicating prudent financial leverage. Return on equity (ROE) is outstanding at 91.8%, suggesting effective use of equity capital. The equity ratio stands at 71.1%, reflecting a strong equity base relative to total assets. Overall, Nvidia maintains a stable financial position with limited leverage risk.

Cash Flow

Very Positive

Cash flow analysis reveals strong liquidity and cash management. Free cash flow grew by 125.2% from 2024 to 2025, underscoring excellent cash generation capabilities. The operating cash flow to net income ratio is 0.88, indicating efficient conversion of income to cash. The free cash flow to net income ratio of 0.84 highlights a robust cash flow relative to profits, supporting ongoing operations and investments.

Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
130.50B	60.92B	26.97B	26.91B	16.68B
	Gross Profit
97.86B	44.30B	15.36B	17.48B	10.40B
	EBIT
81.45B	32.97B	4.22B	10.04B	4.53B
	EBITDA
86.14B	35.58B	5.99B	11.35B	5.69B
	Net Income Common Stockholders
72.88B	29.76B	4.37B	9.75B	4.33B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
43.21B	25.98B	13.30B	21.21B	11.56B
	Total Assets
111.60B	65.73B	41.18B	44.19B	28.79B
	Total Debt
10.27B	11.06B	12.03B	11.83B	7.72B
	Net Debt
1.68B	3.78B	8.64B	9.84B	6.87B
	Total Liabilities
32.27B	22.75B	19.08B	17.57B	11.90B
	Stockholders Equity
79.33B	42.98B	22.10B	26.61B	16.89B
Cash Flow		Free Cash Flow
60.85B	27.02B	3.81B	8.13B	4.69B
	Operating Cash Flow
64.09B	28.09B	5.64B	9.11B	5.82B
	Investing Cash Flow
-20.42B	-10.57B	7.38B	-9.83B	-19.68B
	Financing Cash Flow
-42.36B	-13.63B	-11.62B	1.86B	3.80B

Nvidia Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price110.93

Price Trends

50DMA

119.07

Negative

100DMA

128.39

Negative

200DMA

126.50

Negative

Market Momentum

MACD

-3.57

Positive

RSI

40.62

Neutral

STOCH

21.68

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVDA, the sentiment is Neutral. The current price of 110.93 is above the 20-day moving average (MA) of 110.88, below the 50-day MA of 119.07, and below the 200-day MA of 126.50, indicating a neutral trend. The MACD of -3.57 indicates Positive momentum. The RSI at 40.62 is Neutral, neither overbought nor oversold. The STOCH value of 21.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVDA	83 Outperform	$2.71T	37.75	119.18%	0.04%	114.20%	146.26%
TSM	80 Outperform	$714.08B	22.30	29.96%	1.23%	29.98%	35.76%
AVGO	76 Outperform	$855.47B	87.75	14.85%	1.23%	40.30%	-22.79%
QCOM	75 Outperform	$154.01B	14.88	41.96%	2.44%	12.13%	36.17%
AMD	73 Outperform	$151.74B	93.10	2.89%	―	13.69%	91.75%
Sector *	57 Neutral	$19.95B	9.66	-12.05%	2.76%	5.40%	-24.89%
INTC	50 Neutral	$86.08B	―	-18.31%	2.53%	-2.08%	-1212.72%

* Technology Sector Average

Performance Comparison

NVDA

Nvidia

110.93

24.96

29.03%

AMD

Advanced Micro Devices

93.40

-66.92

-41.74%

AVGO

Broadcom

181.94

52.45

40.51%

INTC

Intel

19.74

-16.20

-45.08%

QCOM

Qualcomm

139.25

-27.25

-16.37%

TSM

TSMC

157.08

18.46

13.32%

Nvidia Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -15.49% | Next Earnings Date: May 28, 2025

Earnings Call Sentiment Positive

The earnings call highlighted NVIDIA's record-breaking revenue and strong growth in data center and automotive segments. However, challenges remain in the gaming and networking sectors, and the company faces margin pressures during the Blackwell ramp. The positive aspects of revenue growth and successful product launches outweigh the lowlights, indicating a generally positive outlook.

Highlights

Record-Breaking Quarterly Revenue

Revenue of $39.3 billion was up 12% sequentially and up 78% year-on-year, exceeding the outlook of $37.5 billion.

Data Center Revenue Surge

Data center revenue for fiscal 2025 was $115.2 billion, more than doubling from the prior year. Fourth-quarter data center revenue was a record $35.6 billion, up 16% sequentially and 93% year-on-year.

Successful Blackwell Product Launch

Blackwell sales exceeded expectations with $11 billion in revenue and marked the fastest product ramp in the company's history.

Automotive Vertical Growth

Automotive revenue was a record $570 million, up 27% sequentially and up 103% year-on-year, driven by autonomous vehicles and partnerships with companies like Toyota and Aurora.

Professional Visualization Business Growth

Revenue of $511 million was up 5% sequentially and 10% year-on-year, with full-year revenue of $1.9 billion increasing 21% year-on-year.

Strong Outlook for Fiscal 2026

Total revenue for the first quarter of fiscal 2026 is expected to be $43 billion, with continued strong demand for Blackwell.

Lowlights

Gaming Revenue Decline

Gaming revenue of $2.5 billion decreased 22% sequentially and 11% year-on-year, impacted by supply constraints.

Networking Revenue Decline

Networking revenue declined 3% sequentially, despite robust attachment to GPU compute systems.

China Market Constraints

Data center sales in China remained well below previous levels due to export controls, with shipments expected to remain at current percentages.

Gross Margin Pressure

GAAP gross margins were 73%, and non-GAAP were 73.5%, down sequentially with expectations to remain in the low seventies during Blackwell ramp.

Company Guidance

During NVIDIA's fourth-quarter earnings call for fiscal 2025, Colette Kress provided guidance highlighting robust financial performance and future expectations. Q4 revenue reached a record $39.3 billion, up 12% sequentially and 78% year-on-year, exceeding the forecast of $37.5 billion. The full-year revenue for fiscal 2025 was $130.5 billion, a 114% increase from the previous year. Data center revenue was a significant contributor, with fiscal 2025 revenue totaling $115.2 billion, more than doubling from the prior year. The Blackwell architecture played a crucial role in this growth, generating $11 billion in Q4 alone, marking the fastest product ramp in NVIDIA's history. Looking ahead, NVIDIA expects Q1 fiscal 2026 revenue to be approximately $43 billion, with GAAP and non-GAAP gross margins projected at 70.6% and 71%, respectively. The company anticipates continued strong demand for its Blackwell architecture, which is expected to drive sequential growth in both data center and gaming sectors.

Nvidia Corporate Events

Executive/Board Changes

Nvidia Appoints Ellen Ochoa to Board of Directors

Neutral

Nov 7, 2024

NVIDIA Corporation has appointed Ellen Ochoa to its Board of Directors, increasing the board count to thirteen. Ochoa will join the Nominating and Corporate Governance Committee, receiving initial and pro-rated equity grants as part of her compensation, along with a cash retainer. This move reflects NVIDIA’s commitment to strengthening its governance and leadership framework.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.