Jennifer Saibil, The Motley Fool
5 min read
In This Article:
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Nvidia is still reporting stellar results despite fears about its business and competition.
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The company sees huge opportunities going forward as AI becomes central in many parts of life.
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It's releasing new and more powerful technology to keep up with demand.
Nvidia (NASDAQ: NVDA) stock has lost some of its momentum this year after gaining 1,400% over the past five years. It's lost some investor confidence for a number of reasons, including fears that new artificial intelligence (AI) models won't need its powerful chips and regulations that limit what the company can ship to China.
But many investors still see its incredible long-term opportunities, and 90% of the 67 Wall Street analysts that cover it still call it a buy. Let's see where Nvidia is holding, where it's going, and whether or not investing in Nvidia stock today can make you a millionaire.
For all the talk about how much more Nvidia can grow, it delivered a blowout report for the fiscal 2026 first quarter (ended April 27). Revenue increased 69% year over year, and non-GAAP (adjusted) earnings per share were up from $0.61 last year to $0.81 this year. That included a charge it had to take for not being able to fulfill orders to China, resulting in a $0.15 loss per share. Nvidia is a profit machine with a 52% net profit margin.
Nvidia is easily the leader in its field, with as much as 95% of the total AI chip market, depending on who you ask. It has deals with pretty much all the major players in AI, who rely on its powerful graphics processing units (GPU) to make the generative AI magic happen. The companies who are out there offering AI platforms, like Amazon and Meta Platforms, need huge data centers to create the power necessary to drive the technology, and they need Nvidia as a partner. Data centers are Nvidia's highest-growth business right now, increasing 73% year over year in the first quarter.
Amazon, for one, is creating its own chips to offer budget options for some of its clients. However, it will maintain its relationship with Nvidia because it needs Nvidia's highest-quality products for its own largest clients.
The market was concerned when Chinese LLM DeepSeek came out a few months ago, and it seemed to offer excellent results without needing the power of chips like Nvidia's. Even at the time, Nvidia CEO Jensen Huang welcomed the news and said advances in AI were good for the whole industry, including Nvidia, and that he wasn't worried.
