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Nvidia, the market leader in the graphics processing unit (GPU) that acts as an accelerator in Artificial intelligence (AI) applications, remains the industry leader. Its share price ended at $139.31 on December 11th, 2024, rising 3.14% for the day to give Nvidia a year-to-date return of 181.39%, way above the S&P 500 which returned 27.56% in the same year.
Having a market capitalization of $3.41 trillion and exceptional profitability, the dominance of Nvidia in the field of AI technology can be thoroughly discussed. Despite facing geopolitical tensions and a recent push to produce its latest Blackwell GPUs, the company’s future has never appeared dull. That being said, is the NVDA at current levels a stock worth investing in?
Nvidia’s fiscal 2025, whose closing date is January 30th, 2025, has the potential of achieving record revenues of $128.7bln, which will be 111 % more than the revenues reported in the previous year.
At least 80% of this revenue is driven by its data center segment, where demand for AI GPUs like the H100 and Blackwell GB200 continues to surge.
Profitability metrics highlight Nvidia’s operational excellence:
Profit Margin: 55.04%
Return on Assets: 55.26%
Return on Equity: 123.77%
Strong financial position is yet again underlined by $34.8 billion of cash and cash equivalents and 17.22% Debt/Equity.
Nvidia dominance in the AI chip market remains unparalleled. In 2023, the company secured a market share of 98% through its resource H100 GPU, and with the Blackwell structure, the company is all set to reset performance parameters.
The Blackwell GB200 NVL72 system is more advanced with 30 times the performance of its predecessor, and it is already showing great demand. Leading suppliers including Microsoft, Amazon Web Services and Google cloud are increasing their purchases in order to meet the growing infrastructure requirements of AI.
In Q3 of fiscal 2025, Nvidia shipped 13,000 Blackwell samples, and the market could reach 300,000 by year-end and climb 800,000 units in Q1 of fiscal 2026. Nvidia’s chief executive officer, Jensen Huang, vacuumed the AI infrastructure expenditure to be around one trillion dollars in the next four years, exposing the tremendous opportunity for Nvidia.
Despite U.S. trade restrictions and heightened scrutiny from Chinese regulators, Nvidia has announced plans to expand its workforce in China. This strategic move focuses on autonomous driving technology and networking software development, aiming to reclaim lost revenue from the region.
China’s share of Nvidia’s revenue has declined from 26% to 17% over the past two years. However, the expansion into the autonomous driving segment—where Nvidia holds a technological edge—could help the company recover its market share, provided U.S.-China relations remain stable.
Nvidia trades at a forward P/E ratio of 32.1, well below its 10-year average of 58.6, suggesting the stock is undervalued relative to its historical performance. Wall Street’s consensus estimates predict an EPS of $4.43 in fiscal 2026, implying a potential upside of 82% and a stock price of $259 in 2025.
Nvidia's current price of $139.31 is just above a strong support level of $130, which has historically acted as a floor for the stock.
If the price revisits this level, it could present a buying opportunity for long-term investors, as Nvidia has consistently rebounded from such levels in the past.
Currently, Nvidia faces immense market share domination, good financial records, and tangible technology advancement that have established Nvidia as a keystone to the AI world. There are a multiplying number of Blackwell GPUs demands and a growth in AI infrastructure investment across the globe to back the company's growth.
Specifically, for investors, Nvidia is a high-growth stock and, simultaneously, an opportunity to invest in the future of AI. Although the latter may appear fairly overpriced, the characteristics exhibited by the stock in the past and expectations for its future are enough to include the company’s shares in a portfolio with an emphasis on future growth.
