A $15 Billion Reason to Buy Nvidia Stock Here
What can be said about Nvidia (NVDA) that hasn’t already been said?
The Jensen Huang-led chip giant is perhaps the most critical company in the world today, due to its significant role in the artificial intelligence (AI) revolution. Almost unanimously lauded by experts and investors for its advanced chips, which are preferred by hyperscalers such as Microsoft (MSFT), Google (GOOGL), and Amazon (AMZN), among others, Nvidia is one of those rare companies that hardly anybody is bearish on.
However, a material headwind for the company has been its operations (or recent lack thereof) in China. First impacted adversely by the emergence of AI startup DeepSeek in January, Nvidia was again dealt a blow when President Donald Trump imposed export restrictions for its H20 chips to the world’s second-largest economy.
But it seems that the company’s China woes may finally come to an end, as it was recently reported that Nvidia has been given the green light to resume the sale of its H20 chips to the country. Analysts have cheered this development as they believe that this can add about $15 billion to the company’s top line, taking its sales in the region to $20 billion for the full year.
This also sent the Nvidia share price soaring, and it is now up 29% on a YTD basis. It also recently became the first company in the world to cross a market capitalization of $4 trillion.
Is it too late to enter the Nvidia party? No, and here’s why.
One would think that a stock that has rewarded its shareholders with an eye-popping rally of 1,596% over the past five years may not offer further room for upside. Think again.
Since my last piece on the company about a month ago, Nvidia’s shares are up about 19%. Of course, the bulk of this can be attributed to the China news, but there is more, as the legion of supporters for Nvidia grows every day and with good reason.
For instance, when it comes to AI training workloads, Nvidia doesn’t just participate, it leads, and by a wide margin. Industry data suggests the company controls more than 80% of that market. A big part of this leadership is due to CUDA, its own proprietary platform. In many ways, CUDA acts like the operating system of the AI compute world, and developers have built around it for years. That kind of ecosystem is difficult to replicate.
Finally, what gives Nvidia even more of an edge is its ability to deliver not just components, but entire AI computing environments. Instead of offering a chip here and a piece of software there, Nvidia delivers full systems. This includes CUDA, yes, but also networking solutions like NVLink and Spectrum-X, as well as scalable hardware frameworks such as MGX. On top of that, there are its enterprise-grade tools like DGX Cloud, AI Enterprise, and Workbench, that allow customers to deploy AI without starting from scratch. The result is a vertically integrated package that few can match, and one that solidifies Nvidia’s place at the center of the AI computing stack.
Nvidia’s unmatched leadership in the semiconductor space, combined with its ongoing focus on scaling and innovation, has not come at the expense of its financial discipline or performance. Rather, the company has continued to deliver a string of strong results that reinforce its position as one of the most consistently high-performing firms in the market today.
In the fiscal first quarter of 2026, Nvidia posted revenue of $44.1 billion, reflecting a substantial 69% rise compared to the same period a year ago. This exceptional performance was driven primarily by its data center business, which accounted for $39.1 billion in sales, representing annual growth of 73%, and further cementing its importance as the company’s key growth engine.
Nvidia’s bottom-line performance also stood out, with earnings per share rising to $0.81, surpassing the consensus estimate of $0.75. Looking forward, analysts expect this momentum to carry into the next quarter, with projections indicating earnings of $0.94 per share on revenue of approximately $45.59 billion.
Still, not every figure was without concern. The company’s gross margin slipped to 61%, significantly lower than the 78.9% recorded in the corresponding period last year. Despite this decline, Nvidia remains the dominant player in the GPU space, which has helped soothe investor concerns regarding margin pressures and intensifying competition. Management reaffirmed its full-year gross margin target, which remains set in the mid-70% range, signaling sustained confidence in the company’s long-term model and execution.
On the cash flow front, Nvidia continued to display financial strength. Cash generated from operating activities reached $27.4 billion, marking a year-over-year increase of 79.1%. The company concluded the quarter with $53.7 billion in cash and equivalents and no short-term debt obligations, highlighting the firm’s robust liquidity position and reinforcing its flexibility to fund capital expenditures, acquisitions, and future strategic initiatives.
At the broader level, Nvidia’s forward-looking estimates remain well ahead of the industry. Analysts currently expect revenue and earnings growth rates of 59.97% and 64.95%, respectively, which far exceed the sector medians of 7.14% and 11.08%, providing further evidence of the company’s continued outperformance and leadership in its field.
Considering all of this, analysts have attributed a rating of “Strong Buy” for NVDA stock, with a mean target price of $181.09. This indicates upside potential of about 5% from current levels. Out of 44 analysts covering the stock, 39 have a “Strong Buy” rating, two have a “Moderate Buy” rating, three have a “Hold” rating, and one has a “Strong Sell” rating.
On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com