Chip Maker Nvidia (NVDA) -3.09%)) We will report the financial results for the fourth quarter of fiscal year 2025 (ends in January 2025) after the market closed on Wednesday, February 26th. Revenue events can introduce a large amount of volatility. Options prices currently represent an 8% movement (up and down) in the stock, following its quarterly report.
Despite recent turmoil from Chinese startup Deepseek, Wall Street remains bullish on Nvidia. According to the Wall Street Journal, of the 68 analysts following the company, the consensus rating is “purchase,” with a median target price of $175 per share. This means a 34% increase from the current share price of $131.
This is what investors should know.
Nvidia Investment Thesis
Nvidia’s Graphics Processing Unit (GPU) is a gold standard that accelerates complex data center workloads, such as training large language models and running artificial intelligence (AI) applications. Last year, a research analyst at Forrester said, “Nvidia sets the pace of AI infrastructure around the world. Without Nvidia’s GPU, modern AI is not possible.”
Importantly, NVIDIA complements GPUs with adjacent data center hardware, such as central processing units (CPUs), interconnects, and networking equipment. In fact, the company has a leadership position in networking gear used for generating AI. The vertically integrated business model offers important benefits to Nvidia. The company is able to build entire AI systems for its customers, and these systems generally have the lowest total ownership costs.
Nvidia also has opportunities beyond the data centers of autonomous driving and autonomous robots. The segment is currently a small percentage of total revenue, but CEO Jensen Huang said it will achieve revenues of $5 billion in occupancy rates for fiscal year 2026, which ends in fiscal year 2026. Finance 2025.
The conclusion is as follows: Nvidia is the foundation of the AI revolution, and burgeoning market opportunities extend beyond generative AI to autonomous robots and self-driving cars. Expenses on AI hardware, software and services will increase by 36% each year through 2030, according to Grand View Research. Nvidia has good shots to match its growth rate.
Image source: Getty Images.
What Wall Street expects for Nvidia in the fourth quarter
In the fourth quarter of 2025, Wall Street expects Nvidia’s revenue to rise by 72% to $38 billion, while non-GAAP revenues increased by $0.91 to 75% per diluted share. Masu. Importantly, stock prices do not necessarily rise after earnings rise. Forward guidance is equally important.
On the one hand, several hyperscale cloud companies discuss computational power constraints during recent revenue calls and outline plans to solve problems in 2025 to make a large investment in AI infrastructure. did. That list includes Alphabet, Amazon, Meta Platforms and Microsoft. Increased spending from these companies is a tailwind for Nvidia, which could lead to strong guidance.
Meanwhile, the US government has gradually tightened export restrictions on semiconductor companies for several years. These restrictions prevent Nvidia from selling its most powerful GPU of any other country to China, but it also limits exports to around 120 countries. That headwind can weaken guidance.
Importantly, Morgan Stanley analysts led by Joseph Moore recently repeated Nvidia as the top pick in the semiconductor industry. But they also said, “We don’t see this quarter as a big positive catalyst, but we continue to be confident that there will be positive momentum in the (second half) when we acquire past export controls. ”
Should investors buy Nvidia shares by February 26th?
Investors should not make decisions based solely on short-term catalysts. However, Nvidia’s long-term investment paper is solid, with Wall Street forecasts forecasting annually adjusted revenues at 51% by fiscal year 2026, which ends in January 2026.
At that price, future investors should be confident that they will buy a small position at Nvidia today, provided they have spent at least three years. However, as mentioned earlier, revenue events can cause stock price volatility. Therefore, investors planning to buy NVIDIA shares should buy some shares before profits and several shares after profits.
Randi Zuckerberg, a former director of market development, Facebook spokeswoman and sister to Metaplatform CEO Mark Zuckerberg, is a member of Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of the board of directors of Motley Fool. Trevor Jennewine holds roles for Amazon and Nvidia. Motley Fool has positions for Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia, and is recommended. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
