Nvidia Continues to See Unstoppable Growth, but Is the Stock Still a Buy? – Yahoo Finance
It shows that the 2025 fourth quarter report is shown nvidia(NASDAQ: NVDA) Once again, it showed amazing growth. The demand Graphic Processing Unit (GPU) It remains insatiable. The company's semiconductor chips have become the backbone Artificial Intelligence (AI) Infrastructure build-outs continue to show no signs of slowing down.
Despite strong reports, the stocks were unable to get great bounces, falling by around 10.5% per year. Still, at the time of writing, it has been an incredible ride during the past five years and incredible driving.
Let's take a closer look at Nvidia's results to see if inventory can regain momentum.
For the second year in a row, Nvidia has more than doubled its revenues. This is an incredible feat for a company of that size. Revenue rose 114% to $1300.5 billion in fiscal year 2025 (ends January 26th) in addition to the previous year's revenue growth of 126%.
In the fourth quarter, revenues rose 78% year-on-year to $39.3 billion, but once again maintained demand for AI. Adjusted earnings per share (EPS) rose 71% to $0.89. Adjusted EPS slower than revenue as it reduced its total margin of 300 basis points to 73%. Nevertheless, the results exceeded analysts' expectations for an adjusted EPS of $0.84 against $38.1 billion in revenue.
The data center business has once again led, with revenues rising 93% year-on-year to $35.6 billion. The company said the growth was led by the H200 hopper chip, with the next generation Blackwell GPU architecture exceeding expectations with revenues of around $11 billion. Nvidia is known for its excellent performance in training AI models, but noted that Blackwell is designed to infer AI inference, noting that the demand for inference is accelerated.
Much of Nvidia's revenue continues to come from large cloud computing providers, accounting for about half of Nvidia's data center revenue for the quarter. However, local cloud providers said it increased as a percentage of data center revenue. Meanwhile, consumers' internet revenues are Meta Platform Elon Musk's Xai has tripled. Enterprise revenue has doubled, and Nvidia says its platform is being adopted by organizations across the industry. The solution said it is being used for things like autonomous driving, fraudulent detention, drug discovery and more.
Other segments of Nvidia were mixed. Game revenue fell to 11% to $2.5 billion as fourth quarter shipments were affected by supply constraints. Professional visualization revenues rose 100% to $5111 million, while automotive and robotics revenues more than doubled to $570 million.
The company remains a cash flow machine, generating $16.6 billion in operating cash flow and $15.6 billion in quarterly free cash flow. Nvidia concluded the year with $43.2 billion and $8.5 billion in debt in net cash and marketable securities. It announced it would pay a modest quarterly dividend.
Nvidia forecasts its first quarter revenue of around $43 billion, representing approximately 65% year-on-year growth. Growth is guided by the new Blackwell GPU architecture. However, we are looking for a total margin that is down from 78.4% a year ago to 70.6%. We expect the total margin to improve throughout the year as Blackwell scale and efficiency is acquired and reach the 70% medium range.
Meanwhile, the company is about to launch a new Ultra GPU architecture in the second half of 2025.
Image source: Getty Images.
Nvidia's stock remains cheap given its growth, with a forward price (P/E) ratio of 28 times the analyst estimate this year, with a price/revenue to growth (PEG) ratio of less than 0.5. A PEG ratio of less than 1 usually indicates that stocks are underestimated.
Meanwhile, Nvidia continues to be the biggest winner of AI infrastructure growth. Businesses continue to pour their money into AI infrastructure, not just the Meta platform, which aims to spend up to $65 billion on AI-related CAPEX, but also the announced Capital Expenditure (CAPEX) budget from Big 3 cloud computing companies (over $250 million). Furthermore, a consortium of companies led by Japan Softbank Openai also plans to spend $500 billion on AI infrastructure over the next few years as part of Project Stargate.
This is a large part of the AI infrastructure spending that NVIDIA is set to benefit this year. That said, Nvidia doesn't have a recurring revenue business model like software companies, and its semiconductor business could be periodic. The trend in AI infrastructure spending over the next five to ten years will go a long way in determining whether equities are a good long-term investment.
However, now Nvidia appears to be in a very good position this year while trading at an attractive rating.
Have you ever felt like you missed a boat when buying the most successful stocks? If you do that, you'll want to hear this.
In rare cases, the team of analyst experts “Double Down” stock Recommendations for businesses they think are trying to pop. If you're worried about having already missed the opportunity to invest, now is the best time to buy before it's too late. And the numbers speak for themselves:
nvidia:If you invest $1,000 when it doubled in 2009,There is $323,920! *
apple: If you invest $1,000 when it doubled in 2008, There is $45,851! *
Netflix: If you invest $1,000 when it doubled in 2004, There is $528,808! *
Currently, we are issuing “double-down” alerts to three incredible companies, and we may not have a chance like this anytime soon.
*Stock Advisor will return as of February 24, 2025
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. Jeffrey Sayler There is no position in any of the stocks mentioned. Motley Fool recommends a meta platform and Nvidia. To Motley's fool Disclosure Policy.
