Nvidia(US:NVDA) The Motley Foolยท2025-11-24 06:00Core Viewpoint - Nvidia is not overvalued compared to other AI stocks, and its recent financial performance highlights strong revenue growth and profitability, making it a compelling investment opportunity [1][2]. Financial Performance - Nvidia reported a revenue increase of $21.92 billion year-over-year, with the cost of revenue rising by only $6.23 billion and operating expenses by $1.17 billion, indicating effective revenue conversion into operating income [3]. - The operating margin for Nvidia was higher than in Q3 of fiscal 2025, with 56% of revenue converted into after-tax net income [4]. - The company generated $31.91 billion in net income for the quarter, positioning it to potentially surpass Alphabet as the most profitable U.S. company within the next year [5]. Market Position and Valuation - Nvidia is recognized as the leader in data center computing and networking, benefiting significantly from increased AI capital investment, but it also faces risks during economic slowdowns [10]. - The company's valuation reflects expectations of continued double-digit earnings growth, reliant on hyperscalers maintaining strong cloud computing growth and profitable AI spending [9]. - Nvidia's stock performance is supported by solid fundamentals, distinguishing it from other overvalued market segments [12]. Financial Stability - Nvidia holds $60.61 billion in cash and marketable securities against $7.47 billion in long-term debt, providing a strong financial position to weather potential economic downturns [11].