The last three months have not been great for Nvidia (NVDA) 1.66%)) Investors as a graphics card specialist stock fell nearly 20% during this period, falling at a much faster pace compared to the 8% decline in the S&P 500 index.
Nvidia’s lukewarm disease performance can be attributed to factors outside the company’s control, such as chip export control and the potential impact of tariffs imposed by the Trump administration. But what’s noteworthy here is that the chipmakers’ financial performance remains strong amid all noise.
This was evident from the company’s latest quarter report for the fourth quarter of fiscal year 2025 (ends January 26th). Nvidia’s results are better than expected, and its guidance suggests that maintaining healthy growth rates in the new fiscal year is on track. More importantly, new catalysts will emerge for Nvidia, paving the way for the company’s long-term growth.
Let’s take a closer look at these catalysts and see why this tech giant can help beat the market in the long run.
New growth opportunities will help Nvidia maintain impressive growth
Nvidia’s data center business has been in the spotlight for the past few years, driven by a prominent demand for its graphics processing units (GPUs) for training artificial intelligence (AI) models. However, investors should not forget that Nvidia has become well-known because of the personal computer (PC) market.
The company’s GPUs have been used on PCs and workstations for a very long time to handle intensive workloads such as gaming and content creation. In fact, the game was Nvidia’s biggest business just five years ago, accounting for almost half of its top line. However, Nvidia saw opportunities for accelerated computing in data centers, quickly deploying chips to tackle AI workloads five years ago, leaving behind competitors such as advanced microdevice and Intel in the Dust.
The A100 processor, released in 2020, has become extremely popular as it was used to train Openai’s ChatGPT. Nvidia has since pushed the envelope in the data center GPU market and made the chip more powerful to heal the need for more computing power to train AI models.
Tech Giants spent billions of dollars on Nvidia’s AI GPUs to train massive language models (LLMs) to advance in AI races. Currently, the company is targeting other aspects of the AI market: reasoning. AI inference is the next step in training where AI models work. According to one estimate, the market for chips used for AI inference has an annual growth rate of 35% until 2031.
Nvidia is already taking advantage of this huge opportunity. That’s not surprising, as Nvidia points out that the latest Blackwell AI chips are designed with AI inference in mind. Nvidia CFO Colette Kress said that many of the early deployments of Blackwell systems were “first for new architectures allocated for inference.” She also added that the company reduced AI inference costs by 200 times in just two years.
Therefore, it is no surprise that NVIDIA’s AI inference revenues will grow over the long term, allowing the company to maintain its impressive share of the AI chip market, which is expected to generate more than $1.1 trillion in revenue by 2032.
Nvidia generated $1.7 billion in car revenue in fiscal year 2025, up just 5% from the previous year. However, the company expects its automotive revenue to almost triple this year. The company notes that the impressive growth of the automotive business this year will be driven by the increasing computational demand for vehicles to support autonomous functions.
More importantly, Nvidia has built a robust ecosystem of customers, including Toyota, Hyundai, Uber, BYD, Volvo, Mercedes-Benz, and more, and uses hardware and software offerings to develop automotive solutions. Better yet, Nvidia’s automotive business has plenty of room for growth in the long term. This is because the company estimates a total address market (TAM) worth $300 billion.
Overall, Nvidia’s total addressable opportunities across various segments is $1.7 trillion. The company generated just under $131 billion in revenue in the previous fiscal year. Therefore, it is not surprising to see stocks move forward again, as the size of the addressable market suggests there is still plenty of room to increase revenue and revenue in the long run.
Nvidia’s earnings growth potential and valuation points A solid jump in stock prices
Nvidia concluded fiscal year 2025, with non-GAAP (adjusted) earnings at $2.99 per share, up 130% from the previous year. Going forward, analysts hope Nvidia will maintain a robust revenue growth rate.
YCHARTS estimates for NVDA EPS for current fiscal year data
Consensus estimates NVIDIA’s revenues reach $6.42 per share in 2028. Assume that at the time, the stocks were trading at 30 times the revenue. This is a 75% jump from current levels, suggesting that this tech stock could regain Mojo and provide a return that will win the market over the next three years.
Given that Nvidia is currently trading at 25x advance revenue, it appears appropriate for investors to add this semiconductor pioneer to their portfolio. This is because they have enough fuel to continue growing at healthy rates for a long time and provide above-average revenues as a result.
The harsh Chauhan has no position in any of the stock mentioned. Motley Fools introduces and recommends advanced microdevices, Intel, Nvidia and Uber technologies. Motley Fool recommends BYD Company and the following options: Motley Fools have a disclosure policy.
