Though the stock market battering it received in the initial months of 2025 indicated a loss of confidence among investors, Nvidia (NASDAQ: NVDA) once again proved its continued stellar growth with its latest earnings report.
Specifically, the semiconductor giant announced it had beaten both revenue and earnings-per-share (EPS) forecasts, having achieved $39.33 billion and $0.89 adjusted, respectively. Wall Street was, on average, expecting a revenue of $38.05 billion and an EPS of $0.84.
The earnings was a major event during Wednesday’s session and triggered significant volatility. NVDA shares first rose 3.67% during the day to their latest closing price of $131.28 during the day, but then collapsed in the after-hours and were down as much as 2.07% at one point during the extended session.
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The Thursday pre-market, on the other hand, appears to be slowly reversing the trend as Nvidia stock has slowly been gaining ground as it is 0.40% up to its press time price of $131.80.
Nvidia results paint an optimistic picture for 2025
At face value, the blue-chip chipmaker’s financials indicate it remains an exceptionally strong buy. It not only beat expectations, but its revenue growth continues to be impressive.
For example, the October report featured a revenue of $35.08 billion — indicating a $4 billion growth by the latest report, only marginally smaller than the $5 billion difference compared to the $30.04 billion unveiled in July 2024.
Similarly, net income has grown substantially as it, in the latest filing, amounted to $22.09 billion. Nearly $10 billion more than the $12.29 billion in the same period one year earlier.
Data center revenue — an aspect that has gained much importance with the ongoing artificial intelligence (AI) boom — also impressed as it grew 93% on an annual basis, having risen to $35.6 billion.
Finally, despite Nvidia’s gaming unit actually diminishing as its sales missed forecasts, coming in at $2.5 billion instead of the expected $3.04 billion, there may be a silver lining as the semiconductor giant announced new graphics units for consumers.
Analysts welcome Nvidia’s earnings with deluge of ‘buy’ ratings
Multiple prominent stock analysis firms were quick to also conclude that Nvidia’s report indicates that equity remains an enticing investment. Since the quarterly results were announced, UBS, Bernstein, Morgan Stanley (NYSE: MS), and JPMorgan (NYSE: JPM) all issued new price targets and all confirmed a “buy” rating.
Furthermore, all reassessments focused on the AI-centric and highly advanced Blackwell chip, concluding demand for it remains exceptional.
Blackwell has been central to Nvidia’s bull argument for months as it is seen as a crucial piece of hardware for the ‘inference’ stage of AI development and as CEO Jensen Huang described demand for it as “insane” already in late 2024.
In the latest statement, UBS opined that NVDA stock is headed for $185, Morgan Stanley to $162, Bernstein to $185, and JPMorgan to $170.
Despite the strong figures and optimistic guidance indicating Nvidia stock remains a strong buy, investors should note there remain multiple reasons to be vigilant.
Investors should remain vigilant despite Nvidia stock’s bullish outlook
The period covered by the report ends on January 26, 2025, meaning that the many disruptive developments of recent months have not had a chance to impact the semiconductor giant’s business.
Indeed, the beginning of the current year has been nothing short of eventful as it featured President Biden’s decision to tighten export restrictions for China, the release of the novel and disruptive DeepSeek model, turbulence stemming from an ambitious tariff plan and fears of a devastating trade war, and, most recently, President Donald Trump’s plans to further tighten the People’s Republic’s access to advanced chips.
While no major negative impact on Nvidia is guaranteed, and some of the developments — the breakthroughs made by the DeepSeek team being the chief example — are expected to be a long-term positive, any of the listed factors could have profound consequences.
Furthermore, while the stock market has been quick to react to the news, the fact it is likely yet to have a visible bearing on the business could provide for an unwelcome surprise in the next Nvidia filing or possibly only become visible in six months’ time.
The Blackwell chip itself could have an unpredictable impact despite most information available at press time indicating it also being a major bullish catalyst. During the last 12 months, there have been several reports indicating issues during development and production.
Though these have, based on the available information, been resolved, they serve as a stark reminder that setbacks are always possible. Similarly, NVDA shares’ violent reactions to DeepSeek and the Canada and Mexico tariff plans demonstrate that between Nvidia’s exceptionally high valuation and substantial optimism backing the company, volatility can be disturbingly high.
Featured image via Shutterstock
