What’s next for Nvidia stock as artificial intelligence advances?

Earlier this week, Nvidia (NVDA) released its financial results for the first quarter of 2025 and once again impressed the markets with its quarterly report. On Thursday, the company increased its market capitalization by $200 billion, which for context is more than 1.5 times the market capitalization of Intel (INTC).

Earlier, the company increased its market capitalization by a record $277 billion after publishing its fiscal fourth-quarter results in February. Led by Jensen Huang, the company has achieved successive milestones, and its market capitalization now exceeds $2.5 trillion. By comparison, Nvidia only became a $1 trillion company last year, and earlier this year its valuation topped $2 trillion.

The breathtaking growth forced the company to announce a 10-to-1 stock split after its shares surged 25-fold over the past five years. Nvidia has seen incredible growth and is the only “Magnificent 7” company to see triple-digit revenue growth.

What’s next for Nvidia’s stock as the company’s growth continues to impress the markets? We’ll cover that in this article, starting with a snapshot of fiscal first-quarter earnings.

Nvidia announces another great earnings result

Ahead of the release of Nvidia’s fiscal first quarter earnings report, Julian Emanuel, Evercore ISI’s senior managing director of equities, derivatives and quantitative strategy, said that Nvidia outperforming both earnings and earnings in the upcoming results is ” the worst kept secret in corporate America.”

This argument has merit, as Nvidia’s profits have easily exceeded its internal forecasts (which, like most companies, are conservative) and analyst estimates.

However, markets don’t “just” expect Nvidia’s earnings to increase, and there have been cases where earnings have declined even after significantly topping estimates.

Looking at Nvidia’s fiscal first-quarter earnings, it reported revenue of $26.04 billion, which easily topped the $24.65 billion expected by analysts. The company’s earnings per share (EPS) were $6.12 – again well above the consensus estimate of $5.59.

Nvidia has projected revenue of $28 billion by the middle of the current quarter, well above the $26.7 billion analysts were forecasting.

The history of the development of artificial intelligence continues uninterrupted

More importantly, Nvidia allayed concerns about its growth prospects, especially with its transition to new Blackwell chips. In response to analysts’ observation that Nvidia will achieve revenue from sales of these chips in 2024, Huang said: “We will see big revenues for Blackwell this year.”

During the earnings call, Nvidia cited the example of Big Tech companies such as Meta Platforms (META) and Tesla (TSLA) using their chips for their artificial intelligence initiatives. It is worth noting that Big Tech companies have opened their coffers to investments in AI, which would suggest higher expenses, among others. on Nvidia chips.

According to Nvidia CFO Colette Kress, cloud service providers are seeing an “immediate and large return” on their AI investments. She highlighted: “For every dollar spent on NVIDIA AI infrastructure, cloud providers have the opportunity to earn $5 in lightning-fast GPU hosting revenue over 4 years.”

The company sees demand outstripping supply for AI chips as Big Tech companies, as well as up to 20,000 startups, scramble to buy them amid AI euphoria.

NVDA Stock Forecast

If Nvidia’s earnings beat estimate is one of Wall Street’s “worst kept secrets,” the other is brokerages rushing to raise their price targets on NVDA after earnings. As has been the case over the past few quarters, analysts overreached by raising their price target on Nvidia, even though the stock shot to the $1,000 mark following the report.

Looking at some of the reported analyst activity, benchmark analyst Cody Acree raised his price target from $1,000 to $1,320, while Bank of America’s Vivek Arya raised his price target from $1,100 to $1,320.

Nvidia’s current high price target of $1,400 comes from Rosenblatt and is almost 33% above Friday’s closing prices. Analysts continue to have a Decide Buy consensus rating on the stock as Wall Street is mesmerized by its stunning growth story.

What’s next for Nvidia’s stock?

Nvidia broke one record after another and it was hard to keep track of it. The next two milestones to watch out for are reaching a market capitalization of $3 trillion and then possibly overtaking Microsoft (MSFT) to become the largest company in the world.

NVDA is trading at a near 40x price-to-earnings multiple over the next 12 months (NTM), which is the second-highest among Magnificent 7 stocks. Tesla, of course, has the highest multiple as the company’s profit margins have declined due to the price war.

Meanwhile, Nvidia boasts incredible growth and is the biggest benefactor of the artificial intelligence investment boom. For now, there is no indication that demand for AI chips will decline any time soon or that competitors may come up with matching products that will undercut Nvidia.

At the date of publication, Mohit Oberoi held positions in: NVDA, TSLA, MSFT, INTC, META. All information and data contained in this article are for informational purposes only. For more information, please review Barchart’s Disclosure Policy here.