Can Nvidia Stock Return to Its Previous Highs?

Core Insights - Nvidia's stock has experienced a significant decline of nearly 30% from its peak of $153.13 on January 7, 2025, despite strong demand for its AI chips [1][2] - The company reported a remarkable 114% increase in annual revenue for fiscal 2025, reaching $130.5 billion, driven by demand from major cloud service providers [5][9] - Nvidia's adjusted net income for fiscal 2025 rose by 130% to $74.3 billion, showcasing its strong profitability [5] Company Performance - Nvidia's latest Blackwell chip platform is expected to enhance training performance by up to four times and speed by 30 times compared to its predecessor [7] - Analysts project a revenue growth of 56.6% for fiscal 2026, with adjusted EPS expected to rise by 51.5% to $4.53, indicating continued strong performance despite a deceleration from the previous year [8][9] - Nvidia's valuation appears attractive, trading at 24 times its consensus 2025 EPS, which is significantly below its three-year average of around 35, suggesting it may be undervalued by 43% [12] Market Position - Nvidia has consistently beaten Wall Street revenue estimates for 22 consecutive quarters, indicating strong market confidence [13] - The demand for Nvidia's GPUs is expected to remain robust, supported by an industry-wide replacement cycle as customers upgrade their technology [11] - The company is positioned as a leader in the AI sector, with a technological advantage that competitors are striving to replicate [8]