Since its meteoric rise catapulted it into the upper echelons of the stock market, NVIDIA (NVDA) has been a force to be reckoned with. Surpassing tech giants like Apple (AAPL) and Alphabet (GOOGL) in market cap, NVIDIA’s stock has soared over 140% year to date and a staggering 200% in the past year.

But amidst the frenzy, many question the sustainability of this growth. However, a deep dive into NVIDIA’s fundamentals reveals a company poised for more success in the months to come.

The AI Vanguard

At the heart of NVIDIA’s success lies its leadership in AI technology. Founder and CEO Jensen Huang’s vision for “AI factories” and accelerated computing has positioned the company as the go-to choice for AI chips in data centers. With an estimated 80% market share in AI chips for data centers, NVIDIA is well-positioned to capitalize on the growing demand for AI technology.

Despite competition from the likes of Advanced Micro Devices (AMD) and Intel, NVIDIA’s next-generation GPU chip and upcoming AI chip platforms indicate continued innovation and growth potential.

Stock Split Strategy

A recent game-changer for NVIDIA was the announcement of a 10-for-1 stock split. This move not only generated retail investor interest but also increased liquidity and accessibility of NVIDIA shares. The stock split, set to boost NVIDIA’s inclusion in the Dow Jones Industrial Average, mirrors Amazon’s path to the index after its own stock split in 2022.

Strong Performance

NVIDIA’s first-quarter fiscal 2025 results painted a rosy picture, surpassing both earnings and revenue expectations. Buoyed by robust demand for GPUs and data centers, the company reported record revenues, with robust projections for the upcoming quarter.

With solid earnings estimates and a history of positive earnings surprises, NVIDIA’s growth trajectory seems firmly on track.

Valuation Analysis

Despite its stellar performance, NVIDIA’s valuation remains reasonable compared to peers like AMD. Trading at a P/E ratio of 47.79, NVIDIA appears attractively priced considering its earnings growth.

Rallying Bulls

Wall Street analysts are doubling down on NVIDIA, raising price targets and issuing bullish forecasts. Bank of America recently labeled NVIDIA a “top pick,” underlining the company’s AI leadership and product upgrade cycle that promise further growth.

Final Thoughts

NVIDIA’s dominance in the AI chips market, coupled with its innovative product pipeline and strong financials, paint a promising future for the company. As NVIDIA begins trading on a split-adjusted basis, the stock is set to draw in a wider investor base.