In today’s booming tech arena, few sub-sectors are as bright as artificial intelligence (AI) and semiconductors. Nvidia Corporation (NVDA), led by Jen-Hsun Huan as its founder, president, and CEO, is the undisputed leader. It has a full-stack accelerated computing platform integrating hardware, software, and services. This powerhouse is capitalizing on the soaring demand for AI and advanced chips, solidifying its position as an industry giant. In 2024, Nvidia stock has been a standout on Wall Street, surging triple digits and leaving the broader indexes far behind. Famed investor Stanley Druckenmiller recently expressed regret for getting out of this outperforming chip stock too early as NVDA hits a series of new all-time highs. Brokerage firm Bank of America just raised its price target on NVDA, signaling confidence in higher highs for this chip giant.
Is it the right time for investors to buy Nvidia stock, or should they wait for a better entry point?
Nvidia Corporation, based in Santa Clara, has been a dominant force in the semiconductor industry since its founding in 1993. With a market cap of $3.48 trillion, Nvidia leads the AI chip market, controlling approximately 80% of it. Its advanced CUDA software has set the benchmark for GPU programming, propelling its technology into various sectors, including data centers and automotive innovation.
Driven by the AI boom, Nvidia’s stock has seen a meteoric rise. Over the past two years, the chip giant’s shares have increased by a staggering 915%, making it the world’s second-largest company by market cap, just behind Apple.
Nvidia stock set an all-time high of $144.42 on Oct. 22. It rewarded shareholders with $7.5 billion in Q2 2025 through share repurchases and dividends. The chip titan has an 11-year streak of dividend payouts and paid out $0.01 per share to shareholders on Oct. 3. With an annualized dividend of $0.04 per share translating to a modest 0.03% forward dividend yield and a 1.04% payout ratio, reflecting its focus on growth. In valuation terms, Nvidia stock trades at 52.61 times forward earnings, higher than the sector median of 29.04x, indicating it’s priced at a premium. However, its price/earnings to growth (PEG) ratio of 1.47x is lower than the tech sector median and its own historical average, suggesting NVDA is fairly priced based on projected earnings growth.
Nvidia’s Q2 2025 earnings report, released on August 28, shattered expectations once again. The company’s revenue soared 122.4% annually to $30 billion, exceeding estimates by 4.5%. This record revenue achievement is attributed to the global push for modernizing the computing stack with accelerated computing and generative AI in data centers.
Non-GAAP EPS for Nvidia skyrocketed 152% to $0.68, surpassing projections. Data Center revenue reached $26.3 billion, indicating a 16% sequential growth and a remarkable 154% annual increase. The growth in the data center segment is fueled by strong demand from cloud service providers and major companies across various sectors.
Nvidia’s net cash from operations reached $14 billion, highlighting the company’s financial strength.
Nvidia’s revenue in the recent quarter was $13.5 billion, a significant increase from $6.3 billion in the same quarter a year ago. It ended the quarter with a $34.8 billion cash reserve and has little debt due to its fabless model. With Q3 earnings results scheduled for Nov. 20, Nvidia projects $32.5 billion in revenue, indicating an 8.2% sequential growth and a 79.4% annual increase. Analysts expect Nvidia’s Q3 EPS to rise 81.6% year over year to $0.69, while the revenue consensus of $32.9 billion is slightly above the midpoint of management’s guidance. Looking ahead, fiscal 2025 EPS could climb 124.6% to $2.65 per share, and increase by another 33.2% to $3.53 in fiscal 2026. Billionaire Investor Stanley Druckenmiller’s Big Mistake. NVDA stock sold off after earnings as traders had higher hopes for the company’s growth forecast. However, the dip ultimately proved to be a solid buying opportunity as the shares hit new highs earlier this month.
Billionaire investor Stanley Druckenmiller recently admitted to a significant regret – selling Nvidia shares too early. In a Bloomberg interview on October 16, he confessed that exiting his NVDA stake late in Q1 was a ‘big mistake.’ CNBC estimates that, adjusting for the stock split, Druckenmiller could have missed out on $1.19 billion in profits on Nvidia’s rise this year. Despite initially believing the stock was overvalued after tripling in a year, Druckenmiller now acknowledges that he underestimated Nvidia’s long-term potential. He stated, ‘I’m licking my wounds from a bad sale,’ hinting at a possible re-entry if prices drop.
What do analysts predict for Nvidia’s stock performance? Bank of America’s analyst team, led by Vivek Arya, maintained their ‘Buy’ rating on NVDA and raised the price target from $165 to $190, signaling a potential upside of 34.5%. Arya asserts that, even though NVDA is trading near all-time highs, it remains ‘undervalued’ when compared to its Big Tech counterparts.BofA raised Nvidia’s 2025 EPS estimate to $2.87. The bank also adjusted Nvidia’s 2026 estimates from $3.90 to $4.47 and increased 2027 estimates from $4.72 to $5.67. Arya pointed out Nvidia’s extraordinary free cash flow (FCF) margins of around 45% to 50%, nearly double the Magnificent 7 average. The analyst wrote that in dollar terms, NVDA could take in $200 billion of FCF over the next two years, rivaling Apple (AAPL) and providing growth optionality. Wall Street is overwhelmingly upbeat about Nvidia. The stock has a consensus “Strong Buy” rating overall. Out of the 41 analysts in coverage, 35 recommend a “Strong Buy,” two advise a “Moderate Buy,” and four maintain a “Hold” rating. The mean price target of $151.36 suggests an upside potential of 7.1% from current levels. NVDA’s Street-high target price of $200, from Rosenblatt, implies the stock could rally as much as 41.%0A
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