TLDR:
- Nvidia’s Q4 earnings report due February 26, with Wall Street expecting $38bn revenue and $0.84 EPS
- Company has consistently beaten estimates since early 2023, though surprise margins are decreasing
- Major tech companies plan to spend up to $320 billion on data centers and AI infrastructure in 2025
- Amazon leads planned spending with $100 billion, followed by Microsoft ($80bn), Alphabet ($75bn), and Meta ($65bn)
- Stock trades at 31x forward earnings despite 1,817% gain over five years
Nvidia’s stock maintains its momentum in early 2025, up 3.4% year-to-date despite January volatility, as major technology companies announce massive AI infrastructure spending plans totaling up to $320 billion for the year ahead.
The chipmaker’s share price has delivered an extraordinary 1,817% return over the past five years, reflecting its dominant position in AI chip manufacturing. The company now approaches a crucial Q4 earnings report scheduled for February 26.
Wall Street analysts project Q4 revenue of $38 billion and earnings per share of $0.84, representing year-over-year growth of 72% and 64% respectively. The company has consistently exceeded analyst expectations since early 2023.
Quarterly revenue has shown steady progression throughout 2024 and early 2025, rising from $26 billion in Q1 to $35.1 billion in Q3. This growth trajectory has helped Nvidia add $2.8 trillion in market capitalization since the AI boom began.
AI Infrastructure Spending
Amazon leads the pack in planned AI infrastructure spending, committing $100 billion for 2025. CEO Andy Jassy emphasized that “the vast majority of that capex spend is on AI for AWS (Amazon Web Services).”
Microsoft plans to invest $80 billion in AI through June 2025, with early results showing promise. The company reports its AI business has reached an annual revenue run rate of $13 billion, marking a 175% year-over-year increase.
Alphabet and Meta Platforms have announced their own substantial investments, planning to spend $75 billion and $65 billion respectively on data centers and AI infrastructure.
The gaming segment remains Nvidia’s second-largest revenue source, showing acceleration over three consecutive quarters and reaching its highest level since May 2022.
Professional visualization, another key division, has seen revenue more than double over the past two years, with consistent quarter-over-quarter growth.
The company’s automotive and robotics revenue has also shown steady growth across five consecutive quarters, adding diversity to its revenue streams.
New Products
Nvidia continues to innovate with new products. Its H100 and H200 GPU chips drive current revenue growth, while the Blackwell AI architecture enters production. CEO Jensen Huang describes demand for Blackwell as “insane.”
The next-generation Rubin AI platform is scheduled for 2026, potentially extending Nvidia’s technological advantage.
Current analyst coverage shows an average 12-month price target of $175, approximately 26% above current trading levels near $138.
The stock trades at 31 times forward earnings based on FY26 estimates, reflecting market expectations for continued growth.
Recent concerns emerged after Chinese startup DeepSeek claimed to create a high-performing language model for just $6 million, though many question this figure’s accuracy.
Nvidia faces some concentration risk, with 36% of sales coming from just three customers in the latest quarter.
