Nvidia: A Strategic Buy Amid AI Boom and GPU Demand

Nvidia's market dominance in GPU technology positions it for significant growth. With CEO Huang predicting a $1 trillion annual AI market by 2028, Nvidia's stock may represent an attractive investment opportunity after a 27% dip.

Date: 04-04-2025

AI Rating: 8

Nvidia has been a front-runner in the GPU technology market, especially with the increasing reliance on GPUs for AI applications. The report highlights key growth factors such as strong demand for Nvidia's chips, which has helped the company amass a market cap increase beyond $2.3 trillion this year. The emphasis on reasoning models requiring 10 times more computing power further underscores Nvidia's pivotal role in future AI infrastructure.

Earnings and Revenue: Nvidia's data center business generated $115.2 billion in revenue in fiscal 2025, reflecting a remarkable 142% year-over-year growth. This sharp rise in revenue suggests a robust demand for Nvidia’s GPUs, which are critical for powering advanced AI models.

Earnings Per Share (EPS): According to Wall Street estimates, Nvidia's EPS for fiscal 2026 is expected to be $4.53, giving a forward P/E ratio of 23.9. This lower ratio indicates a potentially attractive valuation, especially considering Nvidia's historical P/E ratio averages.

The rapid growth in revenue and the strong EPS forecast suggests that Nvidia is well-positioned to capitalize on the exponential increase in demand for AI capabilities. Moreover, the anticipation of a $1 trillion annual opportunity by 2028 in AI spending implies long-term growth potential not just for Nvidia, but for the entire sector.

Conclusion: Nvidia's current trading position after a 27% decline could be seen as a significant buying opportunity. Sales growth and profitability metrics portray Nvidia as an increasingly stable investment choice, despite the volatility witnessed in the broader market. Investors focusing on the long-term horizon may find Nvidia to be a compelling opportunity given the landscape of the AI market and GPU demands.

Stocks: NVDA AMZN MSFT GOOGL ORCL META TSLA