Investing
Nvidia’s shares gained steadily from their April lows and reached a three-month high last week. Since then, the stock traded sideways and has maintained a downtrend ahead of the earnings. In the past twelve months, Nvidia gained about 40%. A positive aspect of the recent dip is that the stock has become less expensive, presenting a compelling opportunity to invest in this blue-chip company.
From Nvidia’s Q4 2025 earnings call:
“Customers are racing to scale infrastructure to train the next generation of cutting-edge models and unlock the next level of AI capabilities. With Blackwell, it will be common for these clusters to start with 100,000 GPUs or more. Shipments have already started for multiple infrastructures of this size. Post-training and model customization are fueling demand for NVIDIA infrastructure and software as developers and enterprises leverage techniques such as fine-tuning reinforcement learning and distillation to tailor models for domain-specific use cases.“
Strong Q4
In the final three months of FY25, Nvidia’s adjusted earnings grew a whopping 71% from the prior year to $0.89 per share. That was driven by a 78% surge in Q4 revenues to $39.33 billion. Data Center revenue, which represents more than 90% of the total business, nearly doubled, partially offset by an 11% drop in gaming revenue. Reported profit, including special items, rose to $22.1 billion or $0.89 per share in the January quarter from $12.3 billion or $0.49 per share in the year-ago period. The company has consistently beaten analysts’ revenue and earnings estimates over the past several quarters.
Nvidia has signed many partnerships and business collaborations in the recent past, including a tie-up with contract electronics maker Foxconn to build an AI factory supercomputer that will deliver advanced Nvidia-Blackwell infrastructure to researchers, startups, and industries. Earlier, the company announced a multibillion-dollar chip deal with Saudi Arabia to build a large 500-megawatt data center powered by over 18,000 Blackwell AI chips.
Headwinds
Meanwhile, like most technology companies in the US, Nvidia faces pressure from recent trade tensions, with the US government’s stringent controls on the export of high-performance AI chips to China affecting sales in that market. The Trump administration’s decision to bring semiconductor production back to the US could disrupt global semiconductor supply chains, which doesn’t bode well for Nvidia. The company has already been facing stiff competition from Chinese tech firms including Huawei and DeepSeek in the AI space.
On Tuesday, NVDA opened lower and continued to lose momentum in the early hours of the session. The last closing price is above the stock’s 52-week average and almost matches the levels seen at the beginning of the year.