In the investment landscape of the technology sector, NVIDIA has become the focus of investors' attention due to its outstanding performance in key areas. With the rapid development of industries such as artificial intelligence, data centers, games and autonomous driving, NVIDIA's technology and products are deeply integrated into them, and its stock price is expected to continue to maintain a strong growth momentum .
In this new round of global AI trading boom , how can investors participate in NVIDIA's development?
What kind of company is NVIDIA?
NVIDIA's business portfolio covers core areas such as artificial intelligence, high-performance computing, gaming, autonomous driving, and professional visualization. In terms of artificial intelligence, the company continues to innovate, and the launch of the Blackwell architecture and GB200 super chip has greatly improved performance and efficiency, meeting the needs of many industries. At the same time, the upcoming new generation of Rubin GPU and Vera CPU will also inject new impetus into the development and deployment of edge AI solutions in the fields of medical, industrial, and scientific computing.
In the GPU product line, the GeForce series, as the flagship product for the consumer level, brings gamers an excellent graphics processing experience and rich gaming features. In the professional visualization market, NVIDIA not only provides powerful accelerated GPU computing solutions, but also continuously introduces innovative solutions for various industries. In the data center field, NVlink technology is used to achieve efficient combination of multiple GPUs, and the DGX supercomputer is successfully built, which strongly supports large-scale data processing and complex computing tasks.
In addition, NVIDIA is actively deploying in emerging technology fields. Its Omniverse enterprise technology has built a software system for the metaverse, industrial digital twins, and robot training, providing support for the digital transformation of various industries. The emergence of the cuLitho lithography computing library has greatly increased the speed of computational lithography, while reducing power requirements and production costs, and has had an important impact on related fields such as semiconductor manufacturing. In the field of autonomous driving, NVIDIA's DRIVEThor autonomous driving platform has reached cooperation with many well-known automobile manufacturers such as Ideal, Great Wall, Zeekr , and Xiaomi. Its autonomous driving chip product line is rich and diverse, from the Tegra series to Parker, Xavier, Orin and other high-computing power chip products, which have been widely used in the automotive industry.
Recently, NVIDIA has had a series of new developments in its business. In January 2025, NVIDIA's robotics business team had in-depth exchanges with the Beijing National Land Center, and the two sides discussed cooperation on cutting-edge directions such as world models and data generation. At CES 2025, NVIDIA released Cosmos, a generative world basic model platform, which focuses on generating high-quality synthetic data for AI running in the physical world such as embodied intelligence and autonomous driving, marking an important step for NVIDIA in the field of AI data generation. At the same time, in the field of consumer electronics, NVIDIA's PC-side RTX50 series graphics cards have further consolidated its position in the AIPC market, and the supporting AI basic models and microservices also provide developers with more powerful tools.
In addition, NVIDIA has made new progress in automotive processors. The Thor processor has entered the full production stage. The cooperation with many car manufacturers has been continuously deepened, and the growth prospects of the automotive business are optimistic. Moreover, NVIDIA has also expanded its influence in related fields and strengthened its cooperation ecology with start-ups by participating in the seed round of financing of digital twin technology company MetAI.
Is Nvidia profitable ?
Profit growth helps drive stock prices higher in the long term, so it's an ideal area for novice investors to focus on before buying a company's shares .
According to NVIDIA's third-quarter financial results for fiscal year 2025, as of October 27, 2024, NVIDIA's third-quarter revenue was US$35.1 billion, a year-on-year increase of 17% and 94%, setting a new record high; net profit was US$19.3 billion, a year-on-year increase of 16% and 109%; gross profit margin reached 74.6%, a year-on-year decrease of 0.5 percentage points and an increase of 0.6 percentage points.
Among them, data center revenue greatly promoted the growth of Nvidia's performance. The revenue of this business was 30.8 billion US dollars, an increase of 17% from the previous quarter and 112% from the same period last year.
In terms of earnings per share, GAAP diluted earnings per share were $0.78, up 16% from the previous quarter and 111% from the same period last year; non-GAAP diluted earnings per share were $0.81, up 19% from the previous quarter and 103% from the same period last year.
Nvidia also generates a lot of cash. Nvidia's cash reserves have doubled over the past year to $35 billion as of November 2024. Bank of America analysts expect Nvidia to generate $200 billion or more in free cash flow over the next two years. At the current pace, two years of dividends and stock buybacks will consume about $60 billion, increase its net funds by about $140 billion, and have about $175 billion in idle liquidity by early 2027.
Cash flow gave it ample funds to invest in continued innovation while returning capital to shareholders through dividends and share repurchases ($15.4 billion in the first half). Even with the strong cash returns, the company ended the quarter with a cash-rich balance sheet ($26.3 billion in net cash).
Driven by the AI boom, Nvidia 's investment in accelerated computing may continue to drive Nvidia 's profit growth.
Should You Invest in Nvidia ?
investing in Nvidia , you have to decide if its stock is worth buying. Here are some reasons to consider investing in Nvidia.
Reasons You Might Invest in Nvidia
Driven by industry growth: NVIDIA is in a long-term growth phase in the computing power sector. With the development of technologies such as artificial intelligence, big data analysis, and cloud computing, the demand for high-performance computing chips continues to grow. As an industry leader, NVIDIA is expected to benefit from this trend and achieve business expansion and profit improvement.
Good profitability and financial status: NVIDIA has performed well in terms of profitability based on past financial data. For example, in many quarters of fiscal year 2025, revenue and net profit maintained rapid growth. Its strong cash flow generation capacity provides financial support for continuous innovation, and it can also return dividends to shareholders through stock repurchases, reflecting the company's healthy financial strength.
Diversified market applications: NVIDIA's technology is widely used in many fields with great growth potential, such as games, artificial intelligence, and self-driving cars. In the game market, its GPU promotes the improvement of game image quality and performance, consolidating market share; in the field of artificial intelligence, it provides core computing power support for enterprises and research institutions; in the field of autonomous driving, it cooperates with automakers to promote the development of intelligent driving technology. This diversified layout reduces market risks.
Innovation drives growth: NVIDIA has deep accumulation and strong capabilities in technological innovation. The company continues to invest in research and development, and continuously launches new products and technologies, such as achievements in accelerated computing and GPU architecture upgrades, which enable it to maintain its leading position in the fiercely competitive technology market and provide support for the long-term growth of its stock price .
Reasons You Might Not Invest in Nvidia
Impact of fluctuations in technology spending: The development of the technology industry is cyclical and uncertain. If the market's spending on technology-related investments slows down, especially the decline in demand for purchasing high-performance computing chips in data centers, it will impact Nvidia's data center business, and in turn affect the company's overall revenue and profits.
Technological competition risk: Although Nvidia currently has an advantage in the GPU field, the technology industry is highly competitive and other competitors may launch competitive alternative technologies or products. For example, in the field of artificial intelligence chips, the emergence of new architectures or technologies may weaken Nvidia's market share and threaten its business growth.
Overvaluation risk: Nvidia's stock price has risen sharply due to its outstanding performance in the AI boom, and the market has high expectations for its future growth. If the company's future performance growth fails to meet expectations, it may trigger a stock price correction and investors may face market value losses.
Inadequate Dividend Yield: Nvidia's dividend yield is relatively low compared to some dividend-focused companies. For investors who rely on dividend income, Nvidia may not meet their income needs .
How to buy Nvidia stock ?
Buying Nvidia stock is a relatively easy process that can be done through a variety of brokerage accounts. If you don't already have a brokerage account, there are many well-reviewed brokers and trading platforms to choose from.
For example, investors can use Fidelity to buy Nvidia stock . Here are the detailed purchase steps:
First, after logging into the platform's official website, fill in the relevant information accurately on the trading page. You need to specify the number of shares to be purchased. If you choose to invest in fractional shares, enter the corresponding amount; enter Nvidia's stock code NVDA; at the same time, determine the order type based on your own investment strategy, whether to choose a market order to ensure that the transaction can be completed immediately at the current market price, or a limit order. Generally speaking, if investors pursue timeliness and certainty of transactions, market orders are a more appropriate choice.
After completing the above information, carefully check the order details and click the "Submit Order" button after confirming that they are correct. Once the order is successfully executed, the investor will officially become a shareholder of NVIDIA and start his investment journey in NVIDIA.
Nvidia pay a dividend?
Nvidia began paying a dividend in 2012 and steadily increased it in the first few years after announcing its first dividend. While the company stopped raising its dividend in recent years, it came to an abrupt halt in 2024 when it announced a massive 150% payout increase.
However, the company's dividend yield at the end of 2024 is still low ( 0.03% ) . Although Nvidia does not pay a large dividend, it returns a lot of cash to investors through stock repurchases. In 2024, the company authorized a significant increase in its stock repurchase program by $25 billion.
Nvidia-related investment vehicles
In addition to directly purchasing Nvidia shares, investors can also invest in Nvidia indirectly through a variety of investment tools. Among them, exchange-traded funds (ETFs) are a more convenient and risk-diversifying option. As a world-renowned technology giant, Nvidia is a component stock of many important stock market indices, such as the S&P 500 and the Nasdaq Composite Index. Therefore, ETF products that track these indices usually hold Nvidia shares.
According to ETF.com, 525 ETFs hold 2.3 billion Nvidia shares by the end of 2024. The ETFs with the most holdings include the SPDR S&P 500 ETF Trust ( NYSEMKT:SPY ) , iShares Core S&P 500 ( NYSEMKT:IVV ) , Vanguard S&P 500 ETF (NYSEMKT:VOO) , Invesco QQQ Trust ( NASDAQ:QQQ ) , Vanguard Total Stock Market ETF ( NYSEMKT:VTI ) , etc.
Will Nvidia Stock Split?
Looking back at Nvidia's stock split history, the company has carried out stock split operations many times. In June 2024, Nvidia implemented a 10-to-1 stock split, which significantly reduced the stock price from the high price before the split to a more affordable level. The stock price after the split was around $120 per share (about $125 per share in early October). This move effectively improved the liquidity and market accessibility of the stock and attracted more investors' attention.
Looking ahead, if Nvidia's stock price continues to rise, considering the company's past stock split practices and market factors, the possibility of another stock split cannot be ruled out. Stock splits are usually a strategy adopted by companies when stock prices are high and market demand is strong, aiming to optimize the stock price structure, enhance the market attractiveness of the stock, and further promote the circulation and trading of the stock.
Conclusion
Over the years, NVIDIA has relied on its advantages in accelerated computing and GPU technology to participate deeply in industries such as artificial intelligence, gaming, and autonomous driving, achieving growth in profits and stock prices. Although there are risks in investment, in the long run, its important position in the field of science and technology and its innovative capabilities make it a potential high-quality long-term investment target.
Investors should weigh the pros and cons, formulate reasonable investment strategies and seize investment opportunities based on their own investment objectives, risk preferences and financial status.
The above pictures are from NVIDIA's official website
