We recently covered 7 unstoppable artificial intelligence (AI) stocks to buy. Let’s discuss whether NVIDIA Corporation (NASDAQ:NVDA) is the most unstoppable AI stock. The company has been making headlines and popping up on the radars of analysts, hedge funds, and even retail investors on Wall Street Bets. To view the other unstoppable AI stocks, go to 7 Unstoppable Artificial Intelligence (AI) Stocks To Buy.
NVIDIA’s Position in the AI Industry
NVIDIA Corporation (NASDAQ:NVDA) produces the industry’s leading GPUs for AI applications and has been at the forefront of the AI boom. The company’s new Blackwell GPU, set to launch by the end of this year, is capable of producing trillion-parameter-scale AI models. The company also directs ample investment to the development of AI software products such as its Advanced AI platform for Enterprise that offers generative AI, data analytics, and inference.
NVIDIA Corporation (NASDAQ:NVDA) is signing deals with large tech players to push demand for its industry-leading GPUs. On May 21, NVIDIA Corporation (NASDAQ:NVDA) announced a collaboration with Microsoft to facilitate the development and deployment of AI applications. Microsoft Corporation has developed an AI model, the Phi-3 family of small language models, optimized to operate on NVIDIA GPUs. NVIDIA Corporation (NASDAQ:NVDA) also offers microservices such as the CuOpt route optimization AI that is added to the Microsoft Azure Marketplace and is part of the NVIDIA AI Enterprise Platform. The two companies are also strictly involved in developing a range of optimizations and integrations for developers to create AI applications. These optimizations and integrations will be available in PCs powered by NVIDIA GeForce RTX and NVIDIA RTX GPUs.
On May 22, NVIDIA Corporation (NASDAQ:NVDA) reported strong earnings for the fiscal first quarter of 2025. The company reported earnings per share of $6.12, beating estimates by $0.54. The company reported a staggering $26.04 billion in quarterly revenue, up 262% year-over-year and ahead of market consensus by $1.45 billion. The company’s data center revenue grew by 23% to reach $22.6 billion, primarily driven by the demand for its Hopper GPU computing platform. Large cloud providers who are customers of NVIDIA Corporation’s (NASDAQ:NVDA) AI infrastructure, accounted for 40% to 50% of data center revenue. Here are some comments from the company’s Q1 2025 earnings call:
“In Q1, we worked with over 100 customers building AI factories ranging in size from hundreds to tens of thousands of GPUs, with some reaching 100,000 GPUs. From a geographic perspective, Data Center revenue continues to diversify as countries around the world invest in Sovereign AI. Sovereign AI refers to a nation’s capabilities to produce artificial intelligence using its own infrastructure, data, workforce and business networks.”
The comments also reinforced the role of its new Blackwell GPU:
“At GTC in March, we launched our next-generation AI factory platform, Blackwell. The Blackwell GPU architecture delivers up to 4x faster training and 30x faster inference than the H100 and enables real-time generative AI on trillion-parameter large language models. Blackwell is a giant leap with up to 25x lower TCO and energy consumption than Hopper. The Blackwell platform includes the fifth-generation NVLink with a multi-GPU spine and new InfiniBand and Ethernet switches, the X800 series designed for a trillion parameter scale AI. Blackwell is designed to support data centers universally, from hyperscale to enterprise, training to inference, x86 to Grace CPUs, Ethernet to InfiniBand networking, and air cooling to liquid cooling.”
Photo by Christian Wiediger on Unsplash
What Does the Stock Split Mean for NVIDIA?
NVIDIA Corporation (NASDAQ:NVDA) also announced a 10-1 stock split and a dividend hike of 150% on May 22 along with its earnings release. On May 23, Lou Basenese, Public Ventures President and Chief Market Strategist, appeared in an interview on Yahoo Finance where he discussed the stock’s performance after its awaited earnings release. The stock is up 90% year-to-date, as of May 23, and has reported strong earnings. The analyst, however, raised concerns about the slim margin by which NVIDIA Corporation (NASDAQ:NVDA) beat earnings. According to Basenese, the stock beat earnings expectations by 8%, the smallest it has ever been, relative to its 40% beat in the first blowout quarter preceding the AI hype. In response to NVIDIA Corporation’s (NASDAQ:NVDA) decision for the stock split, Basenese hinted that the move was great if looked through a psychological lens. He suggests that 40% of trading volume comes from retail investors, and the stock split will eventually push more in retail. He concludes the discussion by highlighting that NVIDIA Corporation’s (NASDAQ:NVDA) products are the backbone of AI applications produced by mega-tech companies, meaning the earnings results were quite predictable.
On May 23, Morgan Stanley maintained an Overweight rating on NVIDIA Corporation (NASDAQ:NVDA), and raised their price target from $1,000 to $1,160. Rosenblatt, on the other hand, maintained a Buy rating on the stock and maintained a price target of $1,400. Over the past three months, 36 Wall Street analysts have held buy-equivalent ratings on NVIDIA Corporation (NASDAQ:NVDA) and have an average price target of $1,104. The stock’s high forecast of $1,400 represents an upside of 35% from its current price of $1,041.19, as of May 23. According to analysts polled by Yahoo Finance, NVIDIA Corporation’s (NASDAQ:NVDA) earnings per share is expected to expand by 94% in 2025, compared to 2024. Despite NVIDIA Corporation’s (NASDAQ:NVDA) strong earnings report and a stellar year-to-date performance, the company ranks second on our list of the most unstoppable stocks to buy. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
If you are interested in reading the most unstoppable AI stock to buy, head over to 7 Unstoppable Artificial Intelligence (AI) Stocks To Buy.
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Disclosure: None. This article is originally published at Insider Monkey.