As Nvidia’s (NVDA) fourth-quarter earnings for its fiscal 2025 approach, anticipation is building. Analysts predict the report could shake up the Nasdaq Index ($NASX), given Nvidia’s dominant role in the artificial intelligence (AI) boom. While many expect another strong quarterly performance, a Mizuho analyst has flagged potential hurdles. According to this analyst, the company’s ambitious launch of its Blackwell GPUs promises long-term rewards, but could introduce short-term volatility. These next-gen chips may temporarily strain revenue trends as Nvidia scales production and navigates supply chain challenges.

With these contrasting perspectives in mind, let’s take a closer look at Nvidia’s stock to better understand the risks and opportunities ahead.

Nvidia Stock Performance

Valued at a massive $3.4 trillion by a market capitalization, shares of Nvidia have delivered almost triple-digit returns over the past year, while it has flattened in the year to date, up just 4.5%. 

Two weeks ago, Nvidia shares were hit hard by DeepSeek news, losing almost 17% in a single day. However, the tech giant managed to bounce back from its YTD low of $116.50 and is now trading around $140.

Nvidia stock is now trading at an attractive valuation. Its price-earnings multiple is 53x, representing a 16.6% discount to its historical 5-year average of 63x. Nvidia’s P/E multiple may seem high, but if you’re betting on substantial future growth, the valuation could still make sense.

Will Nvidia Deliver Another Blowout Quarter?

As we approach Nvidia’s Q4 earnings report on Feb. 26, the market is buzzing with anticipation. Analysts expect the semiconductor giant to post EPS of $0.79 in the quarter, a substantial jump from $0.49 in the prior-year period. Last quarter, Nvidia’s EPS surged by over 110% year-over-year to $0.78, comfortably beating Wall Street’s estimates. Given its asset-light model, strong pricing power, and high operating leverage, I think Nvidia is well-positioned to continue its robust earnings growth in fiscal 2025.

If Nvidia meets these estimates, its revenue could jump by 112% year-over-year to reach an impressive $129.3 billion in fiscal 2025. I believe this surge will likely be driven by its leadership in AI and data center technologies, areas that are rapidly expanding as demand for high-performance computing intensifies. 

Additionally, with projected full-year EPS climbing to $2.77 in fiscal 2025 and further growing to $3.98 in fiscal 2026, the company’s future looks bright. 

However, while I remain optimistic about Nvidia’s long-term potential, it’s essential to acknowledge short-term risks. Macroeconomic headwinds, supply chain constraints, and market volatility could temper immediate results. Still, with forecasts projecting nearly $42 billion in revenue for the first quarter of fiscal 2026, I think any concerns are largely overblown. Overall, Nvidia appears set to deliver strong performance, making it a compelling play for investors looking to benefit from the AI-driven revolution.

Will Nvidia Remain the Leader in AI?

Nvidia’s dominance in AI continues to impress investors, driven by its industry-leading GPUs and breakthrough CUDA software, which serve as the backbone of data centers, powering complex AI workloads. Its flagship H100 GPU has been a key growth driver, fueling a roughly 40% year-over-year surge in data center sales. This impressive performance underscores the market’s confidence in Nvidia’s technology and its ability to maintain a leadership position in the AI space.

However, recent buzz surrounding DeepSeek’s AI model, a cost-effective contender reportedly matching the performance of ChatGPT, has stirred up concerns about whether the era of heavy investment in Nvidia’s chips might be coming to an end. I think this emerging trend could signal that training future AI models may not require the same level of computational muscle Nvidia has long championed, potentially dampening the company’s growth outlook. 

What Do Analysts Say About Nvidia Stock?

As mentioned earlier, Mizuho’s Vijay Rakesh expects Nvidia to meet data-center estimates in the January quarter but warns of “growing pains” as its new Blackwell GPUs drive “complex connectivity and power upgrades.” He anticipates “more flattish” revenue trends in April, partly due to challenges in China, yet remains optimistic, rating Nvidia “Outperform” with a $175 target. Overall, he foresees substantial long-term growth. Meanwhile, Morgan Stanley’s Joseph Moore is confident that Nvidia will maintain its dominant market share, even as competitors stir up the chip space with alternative solutions. 

Evercore’s Mark Lipacis sees the recent dip as a golden buying opportunity, emphasizing that Nvidia’s CUDA ecosystem and customer relationships provide an edge. I believe these varied opinions underscore the complex balance between short-term challenges and long-term potential, making Nvidia a stock to watch closely as it navigates evolving market dynamics.

Overall, Wall Street analysts are highly optimistic about Nvidia’s stock prospects, with a consensus “Strong Buy” rating. Analysts have a mean price target of $177.55, which implies approximately 30% upside potential over current levels.

As the market braces for Nvidia’s upcoming earnings report, investors are keenly watching for signs that these challenges could temper the bullish sentiment that has propelled the stock to its lofty heights.