Can Anything Stop Nvidia?

Core Insights - Nvidia has emerged as the biggest winner in the generative AI revolution, with its stock increasing tenfold since the beginning of 2023, reaching a market cap of over $3.5 trillion [2][3]. Financial Performance - In the fiscal 2025 third-quarter earnings report, Nvidia reported a total revenue of $35.1 billion, a 94% year-over-year increase, surpassing the consensus estimate of $33.1 billion [4]. - The data center segment was a significant driver of this growth, with revenue increasing by 112% to $30.8 billion, indicating strong demand for its GPUs [4]. - Operating income rose by 110% to $21.9 billion, and adjusted earnings per share increased from $0.40 to $0.81, exceeding the consensus estimate of $0.75 [5]. Growth Dynamics - Despite being Nvidia's slowest revenue growth rate in six quarters, the company continues to sustain high growth rates longer than analysts anticipated, with increasing dollar revenue added each quarter [6]. - Nvidia's dominance in the AI chip sector remains largely unchallenged, as competitors like AMD and Intel have struggled to gain market share [8]. Market Demand and Supply - The primary constraint on Nvidia's growth is supply, with CEO Jensen Huang noting "insane" demand for its latest GPUs built on the new Blackwell architecture [8]. - Nvidia's technology is positioned at the center of future AI applications, with a projected revenue surge to $37.5 billion in the fourth quarter, a 70% increase from the previous year [12]. Valuation and Investment Outlook - Nvidia's stock trades at a P/E ratio of 45 based on its run-rate EPS, and despite a slight pullback in after-hours trading, the stock is considered not overpriced relative to its growth rate [13]. - The company is viewed as a strong buy, maintaining a leading position in the AI revolution [14].