Nvidia Stock declined by 8.2 percent on Thursday as some investors are concerned about the technology major losing steam. While Nvidia reported strong quarterly performance, some market analysts and investors were expecting even more from the company that has led the AI revolution. Nvidia stock has been rewarded by investors for launching highly efficient chips that can be used for artificial intelligence applications. Argus Research has suggested strong outlook for Nvidia in its latest research report.

Argus Research has reaffirmed its BUY rating on Nvidia Corporation (NASDAQ: NVDA), citing continued dominance in the AI and data center markets. The company posted stellar Q4 FY25 results, with revenue surging 78% YoY to $39.3 billion and non-GAAP EPS up 73% to $0.89. Nvidia’s data center business grew 93% YoY, driven by high demand for its Blackwell GPU platform. Despite volatility due to competition from China’s DeepSeek, Nvidia’s technological leadership and first-mover advantage keep it ahead. With an FY26 revenue forecast of $43 billion and a 12-month price target of $175, Argus sees further upside for long-term investors.

Nvidia Delivers Another Blowout Quarter Amidst AI Boom

Nvidia once again outperformed aggressive consensus estimates in fiscal Q4 2025, capping off a record-breaking year. The company's data center division, which accounts for 90% of total revenue, witnessed a remarkable 93% YoY growth, bringing in $35.6 billion in revenue.

Total Revenue: $39.3 billion (+78% YoY, +12% QoQ)
Non-GAAP EPS: $0.89 (+73% YoY, exceeding consensus of $0.85)
Gross Margin: 73.5%, reflecting high profitability despite Blackwell’s aggressive ramp-up
CEO Jensen Huang reaffirmed the company’s commitment to AI, highlighting Blackwell’s rapid adoption and the upcoming GTC 2025 event, where next-gen GPU architectures and Quantum computing plans will be unveiled.

Target Price and Market Positioning

Argus Research maintains a BUY rating for Nvidia, with a 12-month target price of $175, representing a strong upside from the current price of $120.28.

52-Week High: $153.13
52-Week Low: $75.61
Market Cap: $3.2 Trillion
Nvidia remains the undisputed leader in AI-driven GPUs, with its dominance in data centers and cloud AI applications ensuring continued revenue acceleration.

Key Growth Drivers: AI, Data Centers, and Automotive Expansion

1. AI & Data Center Revenue: The Powerhouse of Nvidia's Growth

The AI compute segment is Nvidia’s fastest-growing division:

AI Compute Revenue: $32.6 billion, +116% YoY
Networking Revenue: $3.0 billion, down 9% YoY, but expected to rebound with new Spectrum X deployments
Major cloud players like Azure, AWS, Google Cloud, and Oracle Cloud have invested in over 200 Blackwell systems, solidifying Nvidia’s position in the AI revolution.

2. Gaming Segment: Awaiting a Rebound with GeForce RTX 50

While gaming revenue declined 11% YoY in Q4, Nvidia anticipates a revival in PC gaming, driven by the GeForce RTX 50 series with AI capabilities.

Gaming Revenue Q4 FY25: $2.54 billion (-11% YoY, -22% QoQ)
Full-Year Growth: +9% YoY

3. Automotive Growth: A New Revenue Driver

Nvidia’s Automotive division surged 103% YoY in Q4, reaching $570 million, as automakers like Toyota commit to DRIVE Orin AI platforms.

Full-Year Automotive Revenue: $1.7 billion (+53% YoY)

Upcoming Catalysts: GTC 2025 and Blackwell Expansion

Investors are eagerly awaiting GTC 2025 in March, where CEO Jensen Huang is expected to reveal:

Blackwell Ultra Iteration – an upgrade to Nvidia’s flagship AI chip
Future-Generation Rubin GPUs
Quantum Computing Roadmap
Given Nvidia’s track record of surpassing expectations, this event could act as a major stock price catalyst.

Valuation and Forward-Looking Analysis

Argus Research projects FY26 revenue at $43 billion, exceeding Wall Street estimates by $1 billion. Despite Nvidia’s premium valuation, its leadership in AI, strong cash flow, and high margins justify its market premium.

Current FY P/E Ratio: 29.3x
Five-Year Historical P/E: 43.0x
Forward 5-Year EPS Growth Projection: 14% CAGR
Nvidia’s robust fundamentals and strong earnings momentum indicate further upside, with a long-term fair value estimate exceeding $305.

Risks: Competition from DeepSeek & Global AI Regulations

While Nvidia dominates AI GPUs, China’s DeepSeek AI models have introduced cheaper alternatives, sparking volatility in AI-related stocks.

DeepSeek Threat? Despite lower costs, DeepSeek AI still relies on Nvidia’s export-compliant H20 chips, sustaining demand.
Geopolitical Risks: U.S. and European AI regulations may affect Nvidia’s business with China.
Nevertheless, Nvidia remains the leading force in AI infrastructure, and competitors have significant technological ground to cover.