Nvidia (NVDA) Stock: Chip Giant Prepares for Crucial Earnings Report as AI Demand Surges

TLDR

Nvidia stock rises 0.1% to $132.90 on Friday ahead of first-quarter earnings report scheduled for Wednesday after market close Analysts expect earnings of 73 cents per share and revenue to jump 66% year-over-year to $43.3 billion Stock has surged 33% over the past month despite early 2025 headwinds from competition and tariff concerns Company maintains over 80% market share in AI data center GPUs with data center revenue accounting for 90% of total revenue Wall Street analysts maintain Strong Buy rating with average price target of $164.51, implying 24% upside potential

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Nvidia stock edged higher on Friday, closing at $132.90 as investors positioned ahead of what could be another blockbuster earnings report. The artificial intelligence chip maker will announce its first-quarter results after Wednesday’s market close.

NVIDIA Corporation (NVDA)

Trading was muted on Friday with many Wall Street participants already looking toward the Memorial Day weekend. However, next week promises to be pivotal for the semiconductor giant.

Analysts are forecasting strong results driven by continued AI demand. The consensus calls for earnings of 73 cents per share on revenue of $43.3 billion. This would represent a 66% jump in revenue compared to the same period last year.

AI reasoning models are pushing the limits of compute, requiring infrastructure that’s powerful, scalable, and energy-efficient.@Equinix and NVIDIA are building AI factories and advanced data centers to meet this new demand—pairing NVIDIA’s accelerated computing with Equinix’s… pic.twitter.com/k0pmqnxKfp

— NVIDIA Data Center (@NVIDIADC) May 21, 2025

The stock has shown impressive momentum recently, surging 33% over the past month. This rebound comes after facing headwinds earlier in 2025 from rising competition and global tariff concerns.

Despite these challenges, Nvidia’s position in the AI market remains dominant. The company holds an estimated 80% market share in AI-related data center graphics processing units.

Data Center Business Drives Growth

Data center revenue has become Nvidia’s primary growth engine. This segment now accounts for approximately 90% of the company’s total revenue, expanding from modest levels just five years ago.

The data center business has generated $115 billion in revenue over the trailing 12 months. This exponential growth reflects the massive investment by technology companies in AI infrastructure.

CEO Jensen Huang highlighted at the GTC Conference in March that data center spending has reached an inflection point. He projected annual capital expenditures in this area could surpass $1 trillion by 2028.

Major cloud providers continue to increase their AI investments. Meta Platforms recently raised its capital expenditure guidance to $64-72 billion, up from the previous range of $60-65 billion.

Companies like Amazon, Microsoft, and Alphabet show no signs of slowing their AI infrastructure spending. This sustained demand supports Nvidia’s revenue outlook for the coming quarters.

Innovation Pipeline Remains Strong

Nvidia continues to advance its technology roadmap with new chip architectures. The Blackwell platform, launched in late 2024, has gained traction among customers.

The company is preparing to release Blackwell Ultra in the second half of 2025. This next-generation chip is expected to deliver 50 times better performance than the original H100 processors.

Looking further ahead, Nvidia plans to launch the Rubin AI platform in 2026. The Feynman processors are scheduled for release in 2028 as part of the company’s long-term innovation strategy.

The new NVLink Fusion initiative will allow customers to integrate non-Nvidia components with Nvidia products. This flexibility could help the company maintain its competitive edge as the market evolves.

Nvidia has consistently beaten earnings expectations over the past several quarters. If this trend continues, the upcoming report could push the stock toward its all-time high of around $150 per share.

Revenue has grown more than tenfold over the past five years, from $11 billion in fiscal 2020 to $131 billion in fiscal 2025. Earnings have increased 25-fold during the same period, reaching $72 billion thanks to expanding profit margins.

Valuation Presents Opportunity

The stock currently trades at a forward price-to-earnings ratio of about 30 times based on fiscal 2026 estimates. This represents roughly a 35% discount to its five-year average of 48 times earnings.

Source; TipRanks

Wall Street analysts maintain a Strong Buy consensus rating on Nvidia shares. The rating is based on 34 Buy recommendations, five Hold ratings, and one Sell over the past three months.

The average analyst price target stands at $164.51, implying approximately 24% upside potential from current levels. This would mark the company’s tenth consecutive quarterly earnings beat if estimates prove accurate.

Other semiconductor stocks showed mixed performance on Friday. Advanced Micro Devices gained 0.7% while Intel rose 0.5%. Broadcom declined 0.2% and Qualcomm added 0.2%.

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