The dizzying rally seen in Nvidia (NVDA) stock in recent years has been something to marvel at. Trading close to $6 in 2020, the stock has surged above $135, generating outsized returns for investors along the way. With a market capitalization near $3.3 trillion, it is now one of the most valuable companies in the world. (Investors should note that Nvidia completed a 1-for-10 stock split in 2024). 

However, such a tremendous rally has not deterred analysts from their bullish stance on the stock.

Notably, analysts at Oppenheimer consider Nvidia as the chip stock to own for 2025. In a client note, Oppenheimer highlighted Nvidia as the "largest volume producer of AI accelerators" globally, maintaining its unmatched dominance in the AI infrastructure market. The firm projects Nvidia’s data center AI sales to hit $172 billion this year.

And it’s not just Oppenheimer. The wider Wall Street community remains convinced that the Jensen Huang-led company will see more upside in 2025. Why? Let’s have a closer look.

About Nvidia Stock 

For the uninitiated, Nvidia (NVDA) is a leader in specialized AI semiconductors, and the company also supplies software to complement its hardware. More specifically, Nvidia designs and sells graphics processing units (GPUs) for the gaming and professional markets, and system-on-a-chip (SoC) units for the mobile computing market.

NVDA stock has been an outperformer over the past year, gaining 146%. 

Solid Fundamentals

As Nvidia has emerged as a key player in the chip industry, its revenue and earnings have also soared. Over the past 10 years, the company clocked revenue and earnings CAGRs of 37.84% and 59.72%, respectively. 

Nvidia continued on its spree of reporting record quarterly revenues in the third quarter of 2024. Revenue came in at $35.1 billion, beating estimates of $33.2 billion, and its earnings per share of $0.81 beat estimates of $0.75. This marked the eighth consecutive quarter of earnings beats from the company.

Net cash from operating activities rose to $17.6 billion compared to $7.3 billion in the year-ago period. Overall, Nvidia exited the quarter with a cash balance of $38.5 billion with no short-term debt on its books.

Further, analysts are forecasting that Nvidia will continue to outpace the industry in terms of revenue and earnings growth with forward revenue and earnings growth rates pegged at 93.49% and 189.58%, compared to the sector medians of 5.62% and 8%, respectively.

Growth Drivers

Nvidia is not resting on its laurels. The company continues to innovate, with one of its latest accomplishments being the unveiling of the next generation of its GeForce RTX GPUs. Commenting on it, Huang said, “Blackwell, the engine of AI, has arrived for PC gamers, developers and creatives. Fusing AI-driven neural rendering and ray tracing, Blackwell is the most significant computer graphics innovation since we introduced programmable shading 25 years ago." At the heart of this is supposedly the world's most powerful chip — H100 Tensor Core GPU.

Dominating the AI chip market with a 90% share in AI accelerators, Nvidia benefits from soaring demand for generative AI and accelerated computing. Hyperscalers like Amazon (AMZN), Microsoft (MSFT), Google (GOOGL), and Meta (META) are projected to increase data center capital expenditures by 50% year-over-year, from $200 billion to $300 billion, according to Morgan Stanley, with Nvidia positioned to capture much of this growth.

The Blackwell GPU platform offers groundbreaking advancements in AI and high-performance computing, delivering up to 2.5x faster AI training and 15x higher inference speeds compared to its Hopper predecessor. Flexible configurations, including x86 and ARM compatibility, enhance its adoption. Looking ahead, Nvidia’s Rubin platform, expected in 2025 or 2026, promises further innovation.

Nvidia’s strength lies in its hardware-software integration. Tools like CUDA, Nvidia AI, and Omniverse enable efficient AI scalability, while Inference Microservices reduce deployment times from weeks to minutes. The H100 Tensor Core GPUs, vital for AI and high-performance workloads, support applications in data centers, autonomous systems, and sovereign AI projects. Nvidia is also preparing to release the MI300X processor, further enhancing machine learning capabilities.

In robotics, the Nvidia Cosmos platform is advancing physical AI systems through simulation and training, targeting sectors like manufacturing, healthcare, and transportation. Partnerships with companies like Toyota (TM) and Uber (UBER) position Nvidia to capitalize on the robotics market, projected to grow to $350 billion by 2032 at a CAGR of 15.2%.

Analyst Opinions on NVDA Stock

Overall, analysts continue to remain bullish on Nvidia stock. The consensus rating is a "Strong Buy,” with a mean target price of $176.55, indicating upside potential of about 32.2%.

Out of 43 analysts covering NVDA stock, 36 have a “Strong Buy” rating, 3 have a “Moderate Buy” rating, and 4 have a “Hold” rating.