NVIDIA Corporation’s NVDA’s current valuation suggests that the stock is available at a discount compared to the industry average. NVDA stock is currently trading at a 12-month price-to-earnings ratio (P/E) of 63.28. This is significantly lower than the Zacks Semiconductor – General industry average of 72.04x.
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What makes this stock a better bargain at the moment is its impressive year-to-date (YTD) performance. NVIDIA stock has surged 168.1% year-to-date, outpacing the industry’s rise of 128.8%. This impressive rise puts NVIDIA among the top performers in the semiconductor space, with Intel Corporation INTC, Advanced Micro Devices, Inc. AMD, and Micron Technology, Inc. MU far behind.
Micron’s stock has risen 16.8% since the beginning of the year, while Intel and Advanced Devices Micro have fallen 57.2% and 2.3%, respectively. Given this outperformance and attractive valuation, investors may wonder if there’s still an opportunity to buy NVDA stock.
YTD price return performance
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Why NVIDIA stock still has room to run
NVIDIA’s rapid growth is largely due to its pivotal role in the burgeoning field of artificial intelligence (AI), particularly generative AI. Demand for generative AI applications that improve productivity across industries is expected to skyrocket. According to Fortune Business Insights, the global generative AI market is expected to reach $967.6 billion by 2032, representing a compound annual growth rate (CAGR) of 39.6% from 2024 to 2032. It is reflected. This exponential market growth is expected to drive demand for NVIDIA’s high-quality AI. Performance graphics processing units (GPUs) are the foundation of AI advancements.
NVIDIA’s cutting-edge GPUs provide unparalleled computational power and enable you to effectively scale your AI models. These next-generation chips are quickly becoming essential for companies investing in AI. NVIDIA’s leading technology provides unparalleled processing power essential for the complex calculations that AI requires. As enterprises increase their investments in AI infrastructure, NVIDIA stands to benefit as the leading provider of technology supporting these applications.
Growing Beyond AI: Diverse Applications Power NVIDIA’s Future
NVIDIA’s influence extends far beyond AI. The company’s GPUs are essential to advances in areas such as automotive, medicine, and manufacturing. In the automotive space, NVIDIA’s solutions are contributing to the development of self-driving cars, a market that is expected to grow rapidly over the next decade. In healthcare, NVIDIA GPUs are revolutionizing medical diagnostics, powering image processing, and improving patient care. This broad multi-industry applicability positions NVIDIA as a resilient and diverse growth engine in the technology industry.
Additionally, NVIDIA’s robust data center solutions are gaining traction. As companies invest in cloud and edge computing, demand for powerful data center infrastructure increases, making NVIDIA’s data center business a key growth driver. This area alone is expected to significantly increase NVIDIA’s revenue as companies accelerate their digital transformation efforts and solidify NVIDIA’s long-term growth potential.
NVIDIA’s financial strength and impressive outlook
NVIDIA’s financial performance is outstanding. In its fiscal second quarter 2025 report, the company posted a significant 122% year-over-year revenue increase, with non-GAAP earnings per share (EPS) also increasing 152%. This financial strength highlights NVIDIA’s ability to leverage strong demand while effectively navigating market competition.
NVIDIA’s revenue for the upcoming third quarter is expected to jump to $32.5 billion from $18.12 billion a year ago, underscoring the company’s growth trajectory and position as a key player in semiconductor technology for AI. I am. Looking ahead, the Zacks Consensus Estimate for NVIDIA’s fiscal 2025 and 2026 revenue and earnings continues to grow, reflecting confidence in the company’s market leadership across multiple sectors including gaming, automotive, and professional visualization. It shows great growth.
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NVIDIA’s financial stability is a huge advantage. The company had $34.8 billion in cash at the end of the fiscal year ending July 2024, up from $31.44 billion in April. This strong balance sheet allows NVIDIA to weather potential market fluctuations and supports continued investment in growth initiatives. In a rapidly evolving technology environment, this financial strength gives NVIDIA a strategic advantage and positions it to take advantage of future growth opportunities.
Bottom line: Buy NVIDIA now
NVIDIA’s dominant position in the AI space, coupled with its financial strength, broad market applications, and attractive valuation, make it an attractive acquisition. The company’s strong financial results, excellent outlook and strong cash reserves create a solid foundation for continued growth.
Given the rapidly increasing demand for AI and the growing application of NVIDIA technology across a variety of industries, NVDA stock represents a strong opportunity for investors looking to benefit from the next wave of technological advancements. Now is the time to buy NVIDIA stock and seize its promising long-term potential.
NVIDIA currently carries a Zacks Rank #2 (Buy) and a Growth Score of A. Our research shows that stocks with Growth Scores of A or B get offers when combined with a Zacks Rank #1 (Strong Buy) or #2. The best investment opportunity for investors. NVDA stock appears to be an attractive investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
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