5 Reasons Why Nvidia Is Still in a League of Its Own

Last week was the roller ship Nafidia (Nasdaq: nvda). The shares emerged before the profits were reported on February 26, 8.5 % fell in the next session, then regained nearly half of that loss on Friday.

Once the dust stabilized, the stock decreased by only 1.4 % during a three-day period-a sign that investors were somewhat neutral in the latest publication, management and management in NVIDIA on the profit call.

Wall Street can get a quarterly results and outperform slight changes in the main standards. A better way is to display the quarterly results in the context of the comprehensive investment thesis.

Here are five reasons why NVIDIA is still in the top of its game, which are growth shares worth buying now.

SIVIDIA growth in recent years will not be possible without an increase in spending on GPU from a handful of customers.

In the annual report for the year 2025 (ended on January 26, 2025), NVIDIA said: “Sales for the guidance of customers A, B and C 12 %, 11 %, and 11 % of total revenues, respectively, for the fiscal year 2025, are all due to the government and networks sector.”

These unveiled companies are probably from the surplus companies, such as Amazonand Microsoftand alphabetAnd Definition platforms All of them are well -known NVIDIA customers and discourage capital expenses (Capex). In the current financial years, Meta directs $ 65 billion in 2025, expects Alphabet $ 75 billion, Microsoft plans about $ 80 billion, and Amazon expects about $ 100 billion.

Meta builds the Institute for AI’s Obstetrician Institution Instagram Infrastructure, and making Instagram a higher platform for advertisers. At the same time, Amazon Web Services, Microsoft Azure and Google Cloud use a NVIDIA mathematical capacity to expand large data centers.

While NVIDIA’s dependence on a few companies can be considered a risk, it also represents an advantage because it is reliable buyers who have deep pockets. These companies have the resources needed for investment even during periodic slowdown, while smaller players may not be flexible.

One of the biggest threats to the NVIDIA business model is competition. You can eat the huge competition in the higher growth in NVIDIA and cut the margins. But so far, it hasn’t happened.

Advanced small devices It continues to predict Si growth in GPU’s business in the data center, especially if it can get its share in the market from NVIDIA by saving high -reckoning energy at a lower price. But so far, AMD does not simply provide results, and the stock price reflects the disappointment of the investor. AMD is about 52 weeks, as more than 55 % of its highest level has fell ever from March last year.

Compared, Broadcom It suffers from tremendous growth in artificial intelligence, especially in the integrated circuits of the application (ASIC). ASICS is devoted to specific tasks and can be less expensive than graphics processing units. But Broadcom is not the name AI for pure play as NVIDIA. Instead, it is a varied network company with a fast -growing Amnesty International SIM.

During, Intel He failed to make a bouvary in the GPU market.

NVIDIA’s ability to capture a percentage of artificial intelligence is a testimony on its elite products wallet and its continuous innovation. Blackwell – the latest NVIDIA chip, designed for data centers and data centers – has achieved $ 11 billion in the last quarter, which is the fastest productive slope in the history of the company. Instead of sitting and enjoying its success, NVIDIA continues to advance the limits of developing new products. This is a great sign that you can maintain its hegemony, even if there is a periodic slowdown.

One of the reasons why Nvidia was sold the next day after reporting the profits was a knee reaction to the low total margins.

For the last quarter, in the fourth quarter of 2025, NVIDIA recorded a total margin of 73 %. This decreased three percentage points compared to the same quarter in the fiscal year 2024. But for the full year, the total margin was 75 %, compared to 72.7 % in the fiscal year 2024. However, NVIDIA directs only 70.6 % margins in the first quarter of the fiscal year 2026.

The lower margins have nothing to do with any fractures at work. As NVIDIA CFO COLETTE Kress explained in the latest profit call:

During the Blackwell slope, our total margins will be in the lowest seventies. At this stage, we focus on expediting our manufacture to ensure that we can provide customers as soon as possible. Once Blackwell’s tours completely, we can improve our cost and our total margin. Therefore, we expect to be in the mid -seventies later this year.

The margin was an integral aspect of the NVIDIA investment thesis. The company’s high margins allow converting more than 60 % of sales to operating income, making NVIDIA a very profitable work.

As you can see in the scheme, NVIDIA has grown sales, working margins, and diluted profits per share significantly over the past few years.

This impressive growth is why NVIDIA is still a good value despite the high price of its share.

NVIDIA, who is Muslim, is difficult to value. The arrow is a deal if it maintains its growth, even at a lower rate. But if its spending fades due to competition, periodic slowdown, or artificial intelligence models that need a lower computing power, NVIDIA estimate can be exaggerated.

However, it can be said that some uncertainty in NVIDIA’s evaluation. NVIDIA is 27.8 forward to the towers (P/E)-less than Amazon, Apple, Broadcom and Microsoft.

Chips companies like Taiwan manufacturing semiconductors And AMD is cheaper than NVIDIA on the basis of profits forward. But there is no Mega-Cap Tech or Close has a mixture of industry dominance, revenue growth, and margins.

NVIDIA finished the fiscal year 2025 with $ 8.6 billion in cash and cash rewards, 34.6 billion dollars in marketing securities, and only $ 8.5 billion of long -term debts.

The interest income in NVIDIA jumped from $ 866 million in the fiscal year 2024 to $ 1.8 billion in the fiscal year 2025, where it gained more interest on its assets. Therefore, the company does not only have a clear cash position, but rather it achieves interest revenues instead of paying cash at interest expenses. Meanwhile, high interest rates negatively affect companies that depend on the capital’s structure.

The rocky solid public budget in NVIDIA is particularly impressive, taking into account the timing of the product increase. NVIDIA does not take debts to develop products in the hope that their fruits will come. Instead, it makes a lot of cash flow on its current high margin products that can withstand new innovations such as Blackweell with work cash, instead of debt. This is an enormous advantage for NVIDIA to compete, especially if there is a periodic shrinkage, because NVIDIA can continue to pay the boundaries of science and technology. The most poorest financial health companies cannot do so.

NVIDIA is still an irrational purchase of investors who are confident in spending on long -term artificial intelligence. Even if sales growth and margins gradually decrease over time, NVIDIA may remain a great value because the arrow is not expensive.

Investors who have at least three to five years have an investment horizon from three to five years to take a closer look at NVIDIA. However, it should be noted that the stock price may still be very volatile, so tolerance with risks and patience is very important.

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Randy Zuckerberg, former Director of Market Development and Speak for Facebook and Sister to Meta Platforms, Mark Zuckerberg, member of Motley Fool Board of Directors. John Maki, former Chole Foods Market, a affiliate company, a member of the Motley Fool Board of Directors. Susan Fry, CEO of Alphabet, is a member of the Motley Fool Board of Directors. Daniel Veterber has no position in any of the mentioned shares. Motley Fool has positions in advanced advanced devices, flowers, Amazon, Apple, Intel, Meta, Microsoft, NVIDIA, and Taiwan SemiDuctor Manufacturing. Motley Fool Broadcom recommends the following options: Long January 2026 $ 395 on Microsoft, short January 2026 $ 405 calls on Microsoft, and shorten $ 2025 $ 30 on Intel. Motley Fool has a disclosure policy.

5 reasons why NVIDIA still in its own bond was originally published by Motley Fool