Nvidia (NASDAQ: NVDA) has rebounded significantly since an April sell-off, rising 17.5% year-to-date, as opposed to a 5% gain in the S&P 500. This performance positions Nvidia to exceed the benchmark index for a third consecutive year, following an impressive 819% increase in 2023-2024. Currently, Nvidia is the most valuable company globally, nearing a market valuation of $4 trillion.
Nvidia’s profitability has surged, showcasing net income growth that ranks it fifth among major companies like Alphabet, Apple, Microsoft, and Berkshire Hathaway. The company’s net income margin is over 50%, a notable achievement for a hardware manufacturer. Despite a strong market position, Nvidia faces risks from growing competition, geopolitical challenges, and potential downturns in chip spending from major clients.
As of the latest reporting, Nvidia has $53.69 billion in cash and equivalents against $8.46 billion in long-term debt, placing it in a solid financial position to invest in innovation. However, analysts predict a slowdown in growth, estimating earnings of $4.29 per share for fiscal 2026 and $5.76 for fiscal 2027. At the current stock price of $157.75, Nvidia has a price-to-earnings ratio of 36.8, based on fiscal 2026 estimates.
