Nvidia (NVDA) AI Stock Analysis

• Market Cap: $4.46T
• Dividend Yield: 0.02%
• Average Volume (3M): 180.61M
• Price to Earnings (P/E): 37.7
• Beta (1Y): 2.23
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 36,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 1.62
• Shares Outstanding: 24,300,000,000
• 10 Day Avg. Volume: 221,191,780
• 30 Day Avg. Volume: 180,614,495
• PEG Ratio: 0.57
• Price to Book (P/B): 28.81
• Price to Sales (P/S): 20.99
• P/FCF Ratio: 46.88
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 20.03
• Enterprise Value/Gross Profit: 28.18
• Enterprise Value/Ebitda: 29.92
• 1Y Price Target: $272.16
• Price Target Upside: 53.05% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 40
• EPS Forecast (FY): 8.26
• Revenue Forecast (FY): $363.50B

• Rating: 83 Outperform
• Price Target: $214.00 ▲(20.35% Upside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

Score is driven primarily by exceptionally strong financial performance (best-in-class margins, rapidly scaling free cash flow, and low leverage) and reinforced by a strongly positive earnings call with robust revenue and margin guidance. Offsetting factors are mixed near-term technical momentum and a demanding P/E that increases sensitivity to any slowdown (notably China uncertainty, supply constraints, and rising operating/commitment risk).

Positive Factors

Exceptional cash generation & margins

Sustained, extremely high gross and net margins paired with nearly $97B of free cash flow provide durable self‑funding for R&D, capex and shareholder returns. This cash conversion reduces financing risk and enables strategic investments that support long‑term leadership across cycles.

Data-center platform leadership

Rapid, large scale in data center compute and pervasive Blackwell adoption create strong network effects for software, tooling and hyperscaler partnerships. Deep platform traction raises switching costs and supports durable demand for NVIDIA’s accelerator hardware and networking stacks over multiple years.

Very strong balance sheet & capital returns

Low leverage and large shareholder distributions reflect both financial flexibility and confidence in cash flows. A conservative capital structure cushions execution risk, funds strategic purchases or partnerships, and sustains buybacks/dividends without jeopardizing investment in next‑gen platforms.

Negative Factors

Export controls & China uncertainty

Broad potential export restrictions materially raise the structural risk of losing access to China and other markets, forcing reallocation of production, reducing TAM and complicating supply agreements. Regulatory limits could permanently alter revenue mix and require long‑term strategic adjustments.

Supply constraints and purchase commitments

Securing capacity via large purchase commitments and rising inventory ties up capital and raises execution risk if demand softens. Persistent supply tightness for advanced nodes can limit revenue conversion and force elevated working capital, pressuring free cash flow durability across quarters.

Rising operating expenses; margin durability risk

Aggressive OPEX growth to scale software, partnerships and new platforms increases fixed cost base. If data center or gaming demand normalizes, higher operating commitments could compress operating margins and returns, making current elevated profitability harder to sustain through cycles.

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 Financial Statement Overview

Summary

Exceptional profitability and scale: gross margin ~71% and net margin ~56% with rapidly expanding operating and free cash flow (~$96.7B FCF in 2026) and strong cash conversion (FCF near net income). Balance sheet leverage is low (debt-to-equity ~0.07). Key risk is historical cyclicality and durability of today’s elevated margins and demand.

Income Statement

Profitability is exceptional and has strengthened materially: latest annual gross margin is ~71% and net margin is ~56%, both far above prior-cycle levels (e.g., 2023 net margin ~16%). Revenue has accelerated sharply in the most recent year (2026 revenue growth ~15.4%) on top of a major step-up from 2024 to 2025. The main watch-out is that results have shown meaningful cyclicality historically (2022–2023 profitability compression), so sustaining today’s elevated margins and growth rates through the cycle is the key risk.

Balance Sheet

The balance sheet is very strong and improving: leverage is low with debt-to-equity down to ~0.07 in 2026 (from ~0.54 in 2023) alongside a large expansion in equity. Returns to shareholders are extremely high (2026 return on equity ~0.76), reflecting both strong earnings power and efficient capital use. The primary caution is that very high returns can normalize if industry conditions soften, and equity has expanded quickly, which can dilute return metrics if profit growth slows.

Cash Flow

Cash generation is outstanding and scaling rapidly: operating cash flow rose to ~$102.7B and free cash flow to ~$96.7B in 2026, with free cash flow growth ~25%. Cash conversion quality is strong, with free cash flow running close to net income (free cash flow to net income ~0.94–0.96 across 2024–2026). One weakness is that cash coverage of earnings was weak in 2023 (operating cash flow was below net income), highlighting that working-capital or cycle-driven swings can occur even for a high-quality generator.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	215.94B	130.50B	60.92B	26.97B	26.91B
Gross Profit	153.46B	97.86B	44.30B	15.36B	17.48B
EBITDA	144.55B	86.14B	35.58B	5.99B	11.35B
Net Income	120.07B	72.88B	29.76B	4.37B	9.75B
Balance Sheet
Total Assets	206.80B	111.60B	65.73B	41.18B	44.19B
Cash, Cash Equivalents and Short-Term Investments	62.56B	43.21B	25.98B	13.30B	21.21B
Total Debt	11.41B	10.27B	11.06B	12.03B	11.83B
Total Liabilities	49.51B	32.27B	22.75B	19.08B	17.57B
Stockholders Equity	157.29B	79.33B	42.98B	22.10B	26.61B
Cash Flow
Free Cash Flow	96.68B	60.85B	27.02B	3.81B	8.13B
Operating Cash Flow	102.72B	64.09B	28.09B	5.64B	9.11B
Investing Cash Flow	-52.23B	-20.42B	-10.57B	7.38B	-9.83B
Financing Cash Flow	-48.47B	-42.36B	-13.63B	-11.62B	1.86B

Nvidia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVDA	83 Outperform	$4.46T	37.75	101.48%	0.02%	―	―
TSM	82 Outperform	$1.55T	28.45	36.46%	0.82%	39.73%	56.22%
AVGO	74 Outperform	$1.58T	53.40	33.37%	0.69%	23.87%	285.84%
AMD	71 Outperform	$325.19B	80.54	7.08%	―	31.83%	80.45%
QCOM	64 Neutral	$146.18B	15.44	21.48%	2.01%	13.66%	-45.40%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	48 Neutral	$229.52B	-658.38	-0.25%	―	-1.49%	―

Nvidia Corporate Events

Nvidia Links Executive Bonuses to Fiscal 2027 Revenue Performance

On March 2, 2026, Nvidia’s board compensation committee approved a Fiscal Year 2027 Variable Compensation Plan that ties executive cash bonuses to company revenue performance for the fiscal year ending January 31, 2027. The plan establishes threshold, base and stretch payout levels and requires executives to remain employed through the payment date to receive awards.

Under the base plan, CEO Jen-Hsun Huang is eligible for a $4 million target cash award equal to 200% of his fiscal 2027 base salary, while CFO Colette Kress and executive vice presidents Ajay Puri, Debora Shoquist and Timothy Teter each have $1.5 million targets at 150% of base salary. The structure further aligns leadership incentives with top-line growth, reinforcing Nvidia’s focus on sustaining strong revenue expansion in the coming fiscal year.

The most recent analyst rating on (NVDA) stock is a Buy with a $300.00 price target. To see the full list of analyst forecasts on Nvidia stock, see the NVDA Stock Forecast page.

Nvidia announces immediate board resignation of Persis Drell

On January 20, 2026, Nvidia announced that Persis Drell resigned from its board of directors and from the board’s compensation committee, effective immediately. The company stated that Drell’s departure was to pursue a new professional opportunity and emphasized that her resignation did not stem from any disagreement over Nvidia’s operations, policies or practices, suggesting no immediate governance controversy or strategic rift behind the leadership change.

The most recent analyst rating on (NVDA) stock is a Buy with a $265.00 price target. To see the full list of analyst forecasts on Nvidia stock, see the NVDA Stock Forecast page.