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Nvidia Sees Major Growth Amid AI Data Center Spending Surge

Nvidia's market cap has surged with AI demand, forecast to top $1 trillion in 2028. With record revenue and significant EPS growth, investors eye Nvidia's stocks as it defies market slowdowns.

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AI Rating:   8
**Comprehensive Overview of Nvidia's Stock Potential**
Nvidia has become a central player in the AI ecosystem, exemplified by its staggering market capitalization, which increased by $2.2 trillion since the beginning of 2023, as companies pivot towards AI technologies. Notably, Nvidia reported record revenues of $130.5 billion for fiscal year 2025, with its data center segment contributing an exceptional $115.2 billion—showing an impressive 142% growth year-over-year. Such metrics indicate not only robust revenue growth but also potentially enhanced profitability for the company.

CEO Jensen Huang's projection that data center spending will escalate to $1 trillion by 2028 serves as a significant tailwind for Nvidia, directly influencing demand for their products. The earnings per share (EPS) soared to $2.99 for fiscal 2025, representing an explosive 130% increase, which is critical as it reflects on the profit margins of Nvidia. With a current PE ratio of 36, which is notably cheaper than its historical average, investors are drawn to Nvidia's valuation. Furthermore, the expectation of EPS to rise to $4.42 in the current fiscal year 2026 suggests potential for continued growth and an attractive forward PE ratio of 23.9.

Despite the macroeconomic risks posed by global trade tensions potentially impacting Nvidia’s clients such as Microsoft, Amazon, Meta, and Alphabet, the fundamental demand for AI-driven GPUs mitigates risks surrounding temporary economic slowdowns. The intelligence boom necessitates advanced processing capabilities, which Nvidia is well-positioned to provide. Therefore, while short-term volatility may arise due to market conditions, the long-term outlook remains positive, driven by structural demand for AI technologies and the enduring need for Nvidia's leading-edge hardware.
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