Nvidia (Nvda 2.91%))An icon in the world of artificial intelligence (AI), has generated enormous wealth for its long -term shareholders. In the past five years only, its shares have increased by 1,610% (April 9), driven by a ridiculous demand for its graphic processing units (GPU). This trend shows no signs of slowdown.
However, things have not been so smooth for its investors in recent months. When writing these lines, the IA stock Exchange about 24% on top of all time, he reached in January in the middle of a volatile market sale. But when pessimism and fear are in the air, some stocks can become occurred. Could this be the case here? East Nvidia A purchase opportunity without the object right now?
Feed the trend of AI
The training and food of all the AI models that have struck the market require advanced IT solutions. Nvidia sells GPUs which provide the type of computing power at high speed that these applications require. During his fourth quarter of the 2025 financial year, which ended on January 26, 91% of his income came from the data centers segment, which experienced a sharp increase in demand. Nvidia took a dominant advance in the AI chip segment, where it holds the vast majority of the market.
Nvidia’s growth trajectory will probably be the subject of numerous business school case studies in the future. Its turnover increased by 78%, compared to $ 22.1 billion during its fourth quarter of the fiscal year 2024 to 39.3 billion dollars during its last final quarter. This was supported by cloud infrastructure providers who increase their AI capabilities to better serve their customers. Nvidia’s income during its 2025 financial year was 12 times higher than five years ago.
If you think that Nvidia’s higher growth is impressive, look later income. This incredibly profitable company’s net profit in the fourth quarter was 56% of sales. The operating lever effect inherent in this commercial model is clear.
Nvidia’s forces and threats
A company does not reach a market capitalization of 2.4 billions of dollars without doing things. There are important factors that position Nvidia well in its industry.
The first is its ability to innovate. NVIDIA has historically introduced new GPU architectures at a rapid pace. Before making its debut on its current blackwell architecture, its hopper and lovelace lines were the best offers for their rules, meeting customer needs and providing tangible improvement compared to the generations of the previous GPU.
Nvidia has also developed a large and multifaceted economic moat. A factor in its economic advantage is its unequaled technological know-how in terms of GPU design, in addition to the tools necessary for developers to use this equipment. It gave him a huge lead in the industry.
Another competitive field of force comes from its CUDA software platform-a computer platform and an application programming interface which allows developers to remove the most speed and power of its GPUs, and to facilitate the development of models. The result is that Nvidia also benefits from Switching costs. Cuda only works with Nvidia equipment. Developers who become programming experts on this owner platform will be less likely to want to buy competitors’ fleas.
Apple has undoubtedly become the most prosperous company in the world because it has developed a good balance between its hardware and software offers. Nvidia does something similar.
Despite these positive characteristics, Nvidia still faces significant financial risks. The best customers to hyperscalo like Amazon And Alphabet Work on their own AI accelerator chips.
In addition, it is easy to imagine that Nvidia’s revenues could take a serious blow in an economic slowdown. A summary sum of money is spent for AI. Some of these capital expenses will probably be delayed or canceled in a recession.
The price drop
The ongoing announcements and threats of President Donald Trump sent shock waves via the global financial markets. Technological actions have taken some of the greatest successes. The “Magnificent Seven” are all negotiated well with their heights. It seems that the story of the AI boom seems less convincing in the face of broader macroeconomic concerns.
However, NVIDIA’s assessment could be too tempting to ignore. Actions are negotiated now at a Price / benefit ratio (P / E) Out of around 25. It has rarely been close to this cheap in the past two years. It can be mentally difficult to buy actions in AI companies when macro-conditions are so volatile and uncertain. However, the increase in exposure of your portfolio to the AI trend by opening a small position in the main GPU provider is now logical.
Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Neil Patel And its customers have no position in the actions mentioned. The Motley Fool has positions and recommends Alphabet, Amazon, Apple and Nvidia. The Word’s madman has a Disclosure policy.