Nvidia (NVDA) is a global technology leader specializing in graphics processing units (GPUs), data center hardware, and artificial intelligence solutions. The company’s GPUs power everything from creative and gaming workstations to cloud computing, self-driving cars and AI-driven data centers. Nvidia’s advances in GPU-accelerated computing and its CUDA software platform have been instrumental in advancing high-performance computing and artificial intelligence across industries.
Founded in 1993 and led by Jensen Huang, Nvidia is headquartered in Santa Clara, California. The company operates in 38 countries with an estimated 92% market share of the discrete graphics processing unit market.
Nvidia stock has shown strong performance through 2025 despite recent volatility. Despite falling 5% on Monday and Tuesday, over the past five days, NVDA stock has risen 4% and shown more resilience in a one-month period, rising more than 6%. Over the six-month time frame, Nvidia shares rose 44%, driven by strong demand. Its 52-week performance has gained 33%, while the stock is down 8% from its 52-week high of $212.19 set on October 29.
The AI company has outperformed the illustrious S&P 500 (SPX), which has gained 14% in the same time and also 14% in the past six months.
Nvidia reported third-quarter fiscal 2026 results on November 19, reporting revenue of $57 billion, beating analyst estimates of $55.2 billion. Adjusted earnings per share were $1.30, also beating consensus expectations of $1.26. The strong outperformance in top line and revenue was driven by continued strength in AI demand, consistent growth in cloud and data centers, and widespread customer adoption across hyperscalers and enterprise segments.
The company achieved good margins, with gross profit margin exceeding 71%. Free cash flow remained exceptionally strong due to higher data center sales, while Nvidia’s cash reserve reached an estimated $40 billion by the end of the quarter, supporting its aggressive R&D and capital returns plans. The core data center segment led revenue, increasing nearly 80% year-over-year, and AI chip sales hit a new record. Nvidia’s operating income rose, and shareholder returns remained high through ongoing buybacks and dividends. Key performance metrics included accelerated adoption of Blackwell-class GPU platforms and new wins in large AI infrastructure deployments.
Looking ahead to the fourth quarter of fiscal 2026, Nvidia provided strong guidance, forecasting revenue of $65 billion, well above the Wall Street consensus of $62 billion, and continued strong demand for its AI chips and systems solutions. Management sees positive momentum in the AI and cloud markets, which guides maintaining high margins and underscores “off-the-charts” demand for next-generation Blackwell chips, putting Nvidia in for another record quarter.
Daniel Pinto, vice chairman of JPMorgan Chase, warned that valuations in the booming AI industry are likely due for a correction that could significantly impact the AI sector and reverberate across the broader stock market, including the S&P 500. Pinto noted that current market valuations assume rapid productivity gains from AI technologies, which may not materialize as quickly as expected, prompting the revaluation. While he does not expect a recession in the United States, Pinto expects slower economic growth and a limited rally in stocks in 2026.
Supporting this caution, a report from McKinsey & Co. highlights that technology giants are set to spend an estimated $371 billion on data centers in 2025 alone to support AI workloads, and this volume of infrastructure spending is expected to reach $5.2 trillion by the end of the decade. This massive investment supports the growth of the AI market but also raises valuation concerns about whether returns will justify costs within expected timelines.
This balanced outlook suggests that investors should remain cautious amid current optimism, as the degree and pace of AI-driven productivity and earnings growth may face challenges, even as companies like Nvidia continue to beat analysts’ earnings forecasts thanks to strong demand for AI.
Nvidia is currently up 4% in early market trading following its results last night. NVDA stock was a clear buy, with market experts saying it carries a consensus “Strong Buy” rating and an average price target of $239.49, reflecting a potential 24% upside from the market price.
The stock has been studied by 46 analysts, and they have received 41 “strong buy” ratings, 2 “moderate buy” ratings, 2 “hold” ratings and a “strong sell” rating.
On the date of publication, Ruchi Gupta had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. This article was originally published on parchart.com
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