NVIDIA (NVDA) Remains the King of AI Profits Soar 111%, Revenue Jump 106%

Stock (Symbol)

NVIDIA (NVDA)

Stock Price

$224

Sector

Data is as of

Expected to Report

Company Description

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. Source: Refinitiv

Sharek’s Take

NVIDIA was originally focused on the computer graphics market, and invented the first graphics processing unit (GPU) in 1999 which made the company the leader in computer graphics. The company introduced its CUDA programming model in 2006 and ushered in parallel processing of its GPU for high-performance computing that could be used in fields including aerospace, biotechnology, and energy exploration. NVDA has since expanded its architecture to scientific computing, artificial intelligence, data science, autonomous vehicles, robotics, and virtual reality (or AR). Vera as its new CPU platform built for the next wave of agentic AI:

• Grace was NVIDIA’s previous generation CPU. Vera is the new CPU for NVIDIA’s Rubin platform.
• Rubin connects CPUs with GPUs. CPUs are for standard computer processes while GPUs work with images.
• Vera is designed to handle the work around AI agents, including memory management, task coordination, tool use, and communication between AI systems.
• Vera will deliver up to 1.5x faster performance per core, 2x performance per watt, and 4x density per rack compared to x86 based alternatives.
• NVIDIA said Vera opens a brand-new $200 billion market opportunity, giving the company another major growth area beyond GPUs.
• Management believes billions of AI agents could eventually be deployed worldwide, creating a major new growth driver for NVIDIA’s AI infrastructure business.

NVIDIA transitioned to a new reporting framework that better reflects its current and future growth drivers. NVIDIA will now have two market platforms: Data Center and Edge Computing.

1. Datacenter: 93% of total company revenue, +117% growth y.o.y.
   • Growth was driven by strong demand for NVIDIA’s Blackwell architecture, especially products like GB300 and NVL72, which were quickly adopted by frontier AI model builders and hyperscalers.
   • This platform includes two sub-markets: Hyperscale and ACIE, which stands for AI Clouds, Industrial, and Enterprise.
     • Hyperscale: 55% of Data center revenue, +102% growth y.o.y.
       • Hyperscale includes revenue from public clouds and the world’s largest consumer internet companies.
       • These customers use NVIDIA’s AI infrastructure to train and run large AI models at massive scale.
     • ACIE: 45% of Data center revenue, +138% growth y.o.y.
       • It represents NVIDIA’s growth opportunity in AI purpose-built data centers and AI factories across industries, companies, and countries.
2. Edge Computing: 7% of total revenue, +27% growth y.o.y.
   • This platform highlights data processing devices for agentic and physical AI.
   • It includes PCs, game consoles, workstations, AI-RAN base stations, robotics, and automotive.
   • This segment shows how NVIDIA is expanding AI beyond centralized data centers and into real-world devices and machines.

NVIDIA is in a golden era of a universal upgrade in computing. The CEO breaks down the four previous eras as (1) PC lead by IBM, (2) Internet, (3) Mobile & Cloud lead by the iPhone, and (4) AI. Analysts give NVDA an Estimated Long Term Growth Rate (Est. LTG) of 61% a year. For 2026, NVDA returned $41 billion to its shareholders in the form of share repurchases and dividends. NVIDIA is the top holding in my Growth Portfolio and Aggressive Growth Portfolio.

One Year Chart

NVIDIA has a nice looking one-year chart. It was basing between $175 and $200, then stepped up to $200 to $225. 

This stock has a P/E of 24. My Fair Value is a 35 PE. I think the stock is very undervalued. 

The Est. LTG is 61%, up from 52% 2QtrsAgo. The Est. LTG is analysts’ 3-5 year guess of annual profit growth (not stock growth).

Note profit growth has accelerated the past four quarters.

Earnings Table

Last qtr, NVIDIA reported 111% profit growth and beat estimates of 98%. Revenue grew 106% and beat analyst’s estimates of 96%.

• Customer forecasts showed demand could support around 100% growth next year, but NVIDIA expected around 70% growth because supply remained constrained.
• The new next-generation Vera Rubin platform delivers 30x higher throughput and 35x lower token costs relative to Grace Blackwell.
• NVDA expects to ship Groq 3 LPX in volume later this quarter, with Nebius being the first one to get it.

Annual Profit Estimates increased by a good amount this qtr. Note profits were ~$5 last year, and might hit $10 this year, perhaps $15 next year, and maybe $20 in 2028.

Qtrly Profit Estimates for the next 4 qtrs are 90%, 70%, 71%, and 65%. That’s impressive. For next qtr, analysts predict revenue will climb 96% year-over-year. NVIDIA began shipping Vera Rubin after the quarter ended.

Fair Value

NVDA has a P/E of 24. I think the stock is very cheap and has the ability to go on a run higher once the stock market goes into an uptrend.

My Fair Value is a P/E of 35, which is $325 a share, 45% higher than the recent quote of $224.

There’s ample upside for 2027 — 146% — as my guess is the stock could be $552 by then.

Bottom Line

NVIDIA (NVDA) stock has had a stellar decade.

• In 2016, the NVDIA GeForce video processor created a surge in revenue and profits and helped the stock soar from $0.82 to $2.67 that year (after accounting for stock-splits).
• NVIDIA continued to rise into 2018 and peaked at $7.
• Then the stock fell to $3 in late-2018 as the company had lots of returns of its high-end processors as the price of Bitcoin declined and crypto miners returned their gear back to NVIDIA.
• Note profits fell in 2019.
• Meanwhile, the 2022 slump was due to a downturn in sales in the Gaming division as (1) businesses were flush with cash in 2021 and had already upgraded computers and (2) Bitcoin miners found it unprofitable to mine with lower crypto prices combined with high electricity costs.
• In January 2023 the stock pushed past $20 and ended that year at $50 as Datacenter sales pushed higher due to AI investments.
• 2024 was also great as the shares went from $50 to 134.

NVIDIA proved once again that its the King of AI. The combination of high profit growth and a low P/E could send the shares on a huge run higher.

NVDA remans the top stock in the Growth Portfolio and Focus List Power Rankings.

Power Rankings

1 of 32

Focus List

1 of 15

Conservative Stock Portfolio

N/A