NVIDIA (NVDA) Stock

Nvidia (NVDA -1.15%) is the top provider of graphics processing units (GPUs) for data centers worldwide. The need for these chips, which are essential for creating artificial intelligence (AI), is much higher than the available supply, and this situation is expected to persist for a while.

NVIDIA's market value has exceeded that of Apple and Microsoft, yet I believe there is still room for growth, estimating its share price at $189, which is a 42% increase. The company's strong financial results are fueled by a surge in GPU demand for AI, leading to impressive revenue and profit growth, along with smart share buybacks. Additionally, NVIDIA's platform approach, featuring CUDA and AI data centers, establishes high switching costs and fosters long-term partnerships, which helps maintain demand and a competitive edge.

Nvidia (NVDA -1.15%) has just announced an impressive financial quarter. The company had previously estimated that its revenue for the third quarter of fiscal 2025 would be about $32.5 billion, but it actually achieved record sales of $35.1 billion for the quarter ending on October 27.

Nvidia (NASDAQ: NVDA) is seen by many as one of the most successful companies in the stock market in recent years, and this is well-deserved. However, it is getting more difficult for the company to satisfy its investors. After Nvidia's Q3 FY2025 earnings call on November 20, where they reported strong results, the share price has actually fallen.

Nvidia Corporation has reported significant growth, with a 94% increase in revenue for Q3 compared to last year, largely due to strong data center sales, even though their share prices have recently dropped. The company's high forward P/E ratio of 46.33x indicates that some adjustments may be necessary, as it is higher than most of its MAG-7 competitors. The recent decline in share prices to the mid-130s could present a good buying opportunity, as support near the 50-day EMA suggests that the potential for gains is greater than the risks of further losses.

The need for AI chips, especially the high-performance GPUs from Nvidia that are used for training advanced AI models, seems to be endless. In the third quarter, Nvidia's data center division made over $30 billion in revenue, which is almost ten times more than it was two years ago.

Investing in strong companies and keeping those investments for a long time is a proven way to earn money in the stock market. This approach helps investors benefit from compounding returns and take advantage of long-term growth trends. It also allows them to seize opportunities from significant changes in the market.

Nvidia's impressive growth in artificial intelligence (AI) has led to a 179% increase in its shares in 2024, as of now. The stock has a high price-to-earnings ratio of 55, which means investors have high hopes for its future growth as the new year approaches.

Nvidia's Blackwell processors, which were delayed at first, are now being produced at full capacity. Even with some worries, Nvidia's Q3 Data Center revenue reached new highs due to the strong demand for AI accelerators, which is greater than the available supply. Blackwell surpasses AMD's MI325X, with Nvidia's AI accelerators excelling in efficiency and performance, which is important as data centers deal with power restrictions.