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As the market remains vulnerable to a plethora of uncertainties, it seems that there is one constant: the dominance of chip giant Nvidia (NVDA) in the world of artificial intelligence (AI). The stock, which took a tumble due to China-related issues, primarily related to the emergence of DeepSeek and new tariffs under President Donald Trump, has made a strong comeback and is just about 5% off from its record highs.
Touted as the “Godfather of AI” by celebrated tech analyst Dan Ives, CEO Jensen Huang and his company are critical to not only the U.S.’s global prowess in chips, but are increasingly becoming key to diplomatic negotiations.
Have investors looking to add Nvidia to their portfolios missed the train, or is there still time to load up on the stock, which is up 8.3% on a YTD basis? Let’s find out.
About Nvidia Stock
Not even a decade ago, Nvidia was a niche company, mostly popular among gamers for its GPUs. Now, after 10 years its shares have soared more than 28,000%, driving the company to a valuation above $3.5 trillion. Nvidia is also closing in on new record highs as it is just 5% shy of the record $153.13 set early in January.
The company that designs and sells advanced chips and software platforms — primarily for AI, data centers, gaming, and autonomous systems – counts tech majors such as Microsoft (MSFT), Amazon (AMZN), Google (GOOGL), Tesla (TSLA), Oracle (ORCL), ChatGPT maker OpenAI, and nearly every major AI and cloud company as its customer.
Nvidia Is Indispensable in the AI Era
From hyperscalers to sovereign AI, Nvidia is becoming more and more irreplaceable. Central to this are Nvidia’s Blackwell chips.
According to Huang’s keynote at GTC 2025, “The Blackwell architecture significantly enhances AI model training and inference, enabling more efficient and scalable AI applications. And the next evolution of the Nvidia Blackwell AI factory platform, Blackwell Ultra, will be coming to systems in the second half of this year.”
Further bolstering its dominance in the GPU industry, where it already commands a near-monopoly with a-greater-than-90% market share, Nvidia has outlined a compelling product roadmap that is expected to reinforce its leadership position even more firmly. In addition to the Blackwell Ultra platform, the company is progressing toward launching next-generation GPU systems such as the Vera Rubin NVL144, which is anticipated in the second half of 2026, and the Rubin Ultra NVL576, scheduled for release a year later in late 2027.
Nvidia’s influence across the AI ecosystem remains unmatched, underpinned by both its relentless hardware innovation and a deeply intertwined software stack.
Robust Fundamentals
Nvidia’s dominant market position and constant endeavours to scale and innovate has not been at the expense of its financials.
In fact, Nvidia’s remarkable track record of outperforming market forecasts on both revenue and earnings remained intact in the most recent quarter, solidifying what may well be one of the most impressive streaks in recent corporate history.
The company’s fiscal first quarter of 2026 saw total revenue surge to $44.1 billion, reflecting a robust 69% year-over-year increase. Driving this performance was Nvidia’s data center segment, which contributed a dominant $39.1 billion, representing annual growth of 73%.
On the bottom line, the chipmaker once again exceeded Wall Street’s expectations. Earnings per share came in at $0.81, outperforming the consensus projection of $0.75. Looking ahead, analysts are anticipating further momentum, with estimates placing next quarter’s earnings per share at $0.94 on revenue of $45.59 billion.
That said, not all metrics were flawless. The company’s gross margin declined to 61%, down from 78.9% in the corresponding period last year — a notable compression. Still, Nvidia continues to command a dominant market share in the GPU segment, easing investor concerns about intensifying competition. Management also reiterated their full-year margin guidance, aiming for levels in the mid-70% range, underscoring confidence in the underlying business model.
From a cash flow perspective, Nvidia demonstrated exceptional strength. Net cash provided by operating activities reached $27.4 billion, a year-over-year increase of 79.1%. The quarter ended with the company holding $53.7 billion in cash and equivalents, and notably, no short-term debt. This highlights the firm’s formidable liquidity profile and positions it favorably for ongoing capital allocation, investment, and strategic flexibility.
Overall, analysts are projecting Nvdia’s forward revenue and earnings growth rates to be at 59.97% and 64.95%, much higher than the sector medians of 7.14% and 11.08%, respectively.
Analyst Opinions
As I highlighted in a previous article, the impact of new restrictions on H20 shipments to China was lower than expected in Q1. Moreover, the company is looking for ways to alleviate the export restriction concerns by developing a different Blackwell variant.
Considering all of this, analysts have attributed a rating of “Strong Buy” for NVDA stock, with a mean target price of $174.02. This indicates upside potential of about 20% from current levels. Out of 44 analysts covering the stock, 37 have a “Strong Buy” rating, three have a “Moderate Buy” rating, three have a “Hold” rating, and one has a “Strong Sell” rating.
