Nvidia's AI Business Sees Significant Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy NVDA?
Source: Fool
- Revenue Surge: Nvidia reported over $215 billion in revenue for the latest fiscal year, marking a 65% increase, and anticipates a 77% year-over-year revenue growth for the next quarter, solidifying its leadership in the AI chip market.
- Expanding Customer Base: Beyond major tech firms like Meta, OpenAI, Amazon, and Microsoft, Nvidia's sovereign AI business has tripled to $30 billion in the past year, indicating its growing influence in the global market.
- Market Potential: Nvidia expects the sovereign AI market to grow in line with the AI infrastructure market, as governments seek to control their AI platforms, positioning Nvidia as a key partner for driving long-term growth.
- Strategic Implications: The rise of sovereign AI could become a national-level infrastructure similar to electricity and the internet, with Nvidia's involvement promising substantial returns for shareholders and enhancing the company's position in the global tech ecosystem.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 195.560
Low
200.00
Averages
264.97
High
352.00
Current: 195.560
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
NVIDIA's AI Growth Continues to Surge Following Impressive Q4 Results
NVIDIA's Q4 Earnings Performance: NVIDIA's Q4 earnings report for fiscal 2026 shows strong revenue growth driven by AI, with a revenue of $68.3 billion, surpassing market expectations and indicating robust cash flow and investment potential.
Market Segments Growth: The company experienced significant growth across critical markets, particularly in data centers, automotive, and gaming, with data center revenue accounting for over 90% of total revenue and growing by 75% year-over-year.
Future Projections: Analysts project continued strong performance for NVIDIA, forecasting $78 billion in revenue for Q1 FY 2027, reflecting a 14.7% sequential increase and a 77% year-over-year growth, excluding China.
Investor Sentiment and Stock Outlook: Analysts maintain a bullish outlook on NVIDIA's stock, with a consensus target price suggesting significant upside potential, supported by strong cash flow and a healthy balance sheet, positioning the company well for future growth.
See More
Nvidia's Q4 Results Exceed Expectations Significantly
- Strong Performance: Nvidia reported an adjusted earnings per share of $1.62 for the quarter ending January 25, with revenue soaring 73% year-over-year to $68.13 billion, significantly exceeding Wall Street's forecast of $65.91 billion, indicating robust market demand and execution.
- Data Center Revenue Surge: Data center revenue reached $62.13 billion, surpassing expectations of $60.36 billion, reflecting a surge in enterprise demand for AI computing, further solidifying Nvidia's leadership in the AI sector.
- Optimistic Outlook: The company anticipates revenue of $78 billion for the upcoming fiscal first quarter, excluding any revenue from China, showcasing confidence in global markets while also indicating a cautious stance towards the Chinese market.
- Dividend Announcement: Nvidia declared a quarterly dividend of $0.01 per share to be paid on April 1, enhancing investor confidence and demonstrating the company's ability to return value to shareholders supported by strong cash flow.
See More
Analysts Claim Nvidia is Massively Undervalued
- Market Underestimation: Dan Ives from Wedbush Securities pointed out that Wall Street analysts have severely underestimated Nvidia's valuation, particularly ahead of the upcoming fourth-quarter earnings report, indicating a neglect of the company's potential.
- Surge in AI Demand: Ives emphasized that with the skyrocketing demand for artificial intelligence, Nvidia's chips play a crucial role in driving the AI revolution, making its future earnings pivotal.
- Performance Expectations: Ives anticipates a 'gold medal performance' from Nvidia, reflecting not only his confidence in the company's strong earnings but also potentially influencing investor perceptions of its stock.
- Stock Price Reaction: At the time of writing, Nvidia's shares were trading 2% higher, indicating a positive market response to the optimistic expectations surrounding the upcoming earnings report and analyst sentiments.
See More
Analysts Raise Nvidia Price Targets by Over 40%
- Price Target Increases: Several analysts, including JPMorgan and BofA, have raised their price targets for Nvidia, with an average target suggesting over 40% upside, reflecting strong market confidence in its future growth.
- Fundamental Strength: Deutsche Bank analysts noted that despite sustainability concerns, Nvidia's fundamentals remain robust, with a projected 50% CAGR for the AI total addressable market, indicating strong demand for its products.
- Market Sentiment Shift: According to Stocktwits, Nvidia's sentiment flipped from 'bearish' to 'extremely bullish', with many investors viewing Thursday's drop as a 'distortion' and an opportunity to buy more shares.
- Analyst Recommendations: Currently, 56 out of 61 analysts recommend 'Buy' or higher for Nvidia stock, indicating strong bullish sentiment in the market, with an average price target of $262.29 implying a 42% upside potential.
See More
Alibaba Launches Low-Cost AI Coding Platform
- AI Coding Platform Launch: Alibaba's cloud division has introduced a new AI coding platform that allows developers to access leading Chinese AI models at a low cost, enhancing the company's competitiveness in the AI software sector.
- Flexible Subscription Model: The platform enables users to switch freely between multiple models under a single subscription, priced at just 7.9 yuan (approximately $1.15) for the first month and 40 yuan thereafter, significantly lowering the barrier to entry for developers.
- In-House AI Chip Unveiled: Alibaba's T-Head chip unit has launched the Zhenwu 810E chip, designed specifically for AI training and inference, delivering performance comparable to Nvidia's H20 processor and meeting the heavy data demands of generative AI.
- Market Reaction: Despite the product launch, Alibaba's stock fell 1.32% in premarket trading on Friday, closing at $146.10, indicating a cautious market sentiment regarding its AI strategy.
See More
Nvidia's AI Business Sees Significant Growth
- Revenue Surge: Nvidia reported over $215 billion in revenue for the latest fiscal year, marking a 65% increase, and anticipates a 77% year-over-year revenue growth for the next quarter, solidifying its leadership in the AI chip market.
- Expanding Customer Base: Beyond major tech firms like Meta, OpenAI, Amazon, and Microsoft, Nvidia's sovereign AI business has tripled to $30 billion in the past year, indicating its growing influence in the global market.
- Market Potential: Nvidia expects the sovereign AI market to grow in line with the AI infrastructure market, as governments seek to control their AI platforms, positioning Nvidia as a key partner for driving long-term growth.
- Strategic Implications: The rise of sovereign AI could become a national-level infrastructure similar to electricity and the internet, with Nvidia's involvement promising substantial returns for shareholders and enhancing the company's position in the global tech ecosystem.
See More
NVIDIA's AI Growth Continues to Surge Following Impressive Q4 Results
NVIDIA's Q4 Earnings Performance: NVIDIA's Q4 earnings report for fiscal 2026 shows strong revenue growth driven by AI, with a revenue of $68.3 billion, surpassing market expectations and indicating robust cash flow and investment potential.
Market Segments Growth: The company experienced significant growth across critical markets, particularly in data centers, automotive, and gaming, with data center revenue accounting for over 90% of total revenue and growing by 75% year-over-year.
Future Projections: Analysts project continued strong performance for NVIDIA, forecasting $78 billion in revenue for Q1 FY 2027, reflecting a 14.7% sequential increase and a 77% year-over-year growth, excluding China.
Investor Sentiment and Stock Outlook: Analysts maintain a bullish outlook on NVIDIA's stock, with a consensus target price suggesting significant upside potential, supported by strong cash flow and a healthy balance sheet, positioning the company well for future growth.
See More
Nvidia's Q4 Results Exceed Expectations Significantly
- Strong Performance: Nvidia reported an adjusted earnings per share of $1.62 for the quarter ending January 25, with revenue soaring 73% year-over-year to $68.13 billion, significantly exceeding Wall Street's forecast of $65.91 billion, indicating robust market demand and execution.
- Data Center Revenue Surge: Data center revenue reached $62.13 billion, surpassing expectations of $60.36 billion, reflecting a surge in enterprise demand for AI computing, further solidifying Nvidia's leadership in the AI sector.
- Optimistic Outlook: The company anticipates revenue of $78 billion for the upcoming fiscal first quarter, excluding any revenue from China, showcasing confidence in global markets while also indicating a cautious stance towards the Chinese market.
- Dividend Announcement: Nvidia declared a quarterly dividend of $0.01 per share to be paid on April 1, enhancing investor confidence and demonstrating the company's ability to return value to shareholders supported by strong cash flow.
See More
Analysts Claim Nvidia is Massively Undervalued
- Market Underestimation: Dan Ives from Wedbush Securities pointed out that Wall Street analysts have severely underestimated Nvidia's valuation, particularly ahead of the upcoming fourth-quarter earnings report, indicating a neglect of the company's potential.
- Surge in AI Demand: Ives emphasized that with the skyrocketing demand for artificial intelligence, Nvidia's chips play a crucial role in driving the AI revolution, making its future earnings pivotal.
- Performance Expectations: Ives anticipates a 'gold medal performance' from Nvidia, reflecting not only his confidence in the company's strong earnings but also potentially influencing investor perceptions of its stock.
- Stock Price Reaction: At the time of writing, Nvidia's shares were trading 2% higher, indicating a positive market response to the optimistic expectations surrounding the upcoming earnings report and analyst sentiments.
See More
Analysts Raise Nvidia Price Targets by Over 40%
- Price Target Increases: Several analysts, including JPMorgan and BofA, have raised their price targets for Nvidia, with an average target suggesting over 40% upside, reflecting strong market confidence in its future growth.
- Fundamental Strength: Deutsche Bank analysts noted that despite sustainability concerns, Nvidia's fundamentals remain robust, with a projected 50% CAGR for the AI total addressable market, indicating strong demand for its products.
- Market Sentiment Shift: According to Stocktwits, Nvidia's sentiment flipped from 'bearish' to 'extremely bullish', with many investors viewing Thursday's drop as a 'distortion' and an opportunity to buy more shares.
- Analyst Recommendations: Currently, 56 out of 61 analysts recommend 'Buy' or higher for Nvidia stock, indicating strong bullish sentiment in the market, with an average price target of $262.29 implying a 42% upside potential.
See More
Alibaba Launches Low-Cost AI Coding Platform
- AI Coding Platform Launch: Alibaba's cloud division has introduced a new AI coding platform that allows developers to access leading Chinese AI models at a low cost, enhancing the company's competitiveness in the AI software sector.
- Flexible Subscription Model: The platform enables users to switch freely between multiple models under a single subscription, priced at just 7.9 yuan (approximately $1.15) for the first month and 40 yuan thereafter, significantly lowering the barrier to entry for developers.
- In-House AI Chip Unveiled: Alibaba's T-Head chip unit has launched the Zhenwu 810E chip, designed specifically for AI training and inference, delivering performance comparable to Nvidia's H20 processor and meeting the heavy data demands of generative AI.
- Market Reaction: Despite the product launch, Alibaba's stock fell 1.32% in premarket trading on Friday, closing at $146.10, indicating a cautious market sentiment regarding its AI strategy.
See More
Nvidia's AI Business Sees Significant Growth
- Revenue Surge: Nvidia reported over $215 billion in revenue for the latest fiscal year, marking a 65% increase, and anticipates a 77% year-over-year revenue growth for the next quarter, solidifying its leadership in the AI chip market.
- Expanding Customer Base: Beyond major tech firms like Meta, OpenAI, Amazon, and Microsoft, Nvidia's sovereign AI business has tripled to $30 billion in the past year, indicating its growing influence in the global market.
- Market Potential: Nvidia expects the sovereign AI market to grow in line with the AI infrastructure market, as governments seek to control their AI platforms, positioning Nvidia as a key partner for driving long-term growth.
- Strategic Implications: The rise of sovereign AI could become a national-level infrastructure similar to electricity and the internet, with Nvidia's involvement promising substantial returns for shareholders and enhancing the company's position in the global tech ecosystem.
See More
