Nvidia (NASDAQ:NVDA) proved yet again in its October quarter (F3Q) report why it wears the crown in the AI chip arena, delivering robust revenue growth driven by its data center products.
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The company dominates the AI GPU market with advanced products like the new Blackwell architecture, which showed a 2.2x performance improvement over Hopper in MLPerf Training benchmarks. At the same time, global consulting giants such as Accenture and Deloitte are integrating Nvidia’s AI solutions into enterprise operations worldwide, while Japan’s SoftBank is leveraging Nvidia’s DGX Blackwell to construct the country’s most powerful AI supercomputer.
“We believe that NVDA’s leadership in the AI GPU space is poised to drive continued revenue and profit growth in the near term,” remarked PhillipsCapital analyst Jonathan Woo. He attributed this outlook to the overwhelming demand for Nvidia’s GPUs, which “far outstrips supply.” Even with supply constraints, the initial rollout of Blackwell is expected to make a substantial contribution to NVIDIA’s 4Q25e revenue.
However, looking a bit further ahead, with gross margins stabilizing, Woo anticipates a slowdown in revenue and PATMI (profit after tax and minority interests) growth beyond mid-FY26e, as Blackwell shipments peak.
There’s also another risk lurking and that revolves around the “potential effects of trade tariffs.” The US-China trade war, which escalated in July 2018, led to a drop of over 50% in NVDA’s share price from its October 2018 peak. As such, with Trump about to re-enter the White House, a recurrence of similar tariff policies could significantly affect the stock. The company has acknowledged that the Chinese market will remain “very competitive,” as domestic players like Huawei capitalize on Nvidia’s inability to sell its most advanced chips in China due to US export restrictions. That said, Woo believes the impact of trade tariffs on Nvidia will be less severe than in 2018. China’s contribution to the chip giant’s revenue (approximately 13% of 9M25 revenue) is now significantly lower than pre-restriction levels (around 24% of FY19 revenue), mitigating geographical risks associated with the superpower in the East.
As for Woo’s model, to account for a “stronger ramp-up of its data accelerator platforms (Hopper + Blackwell) and lower anticipated corporate tax rates,” the analyst has increased his FY26e revenue/PATMI by 5%/7%, respectively. At the same time, he has reduced his FY26e margin to reflect management’s guidance indicating lower margins driven by Blackwell products.
To this end, Woo nudged his price target from $155 to $160, implying a 17% upside over the next year. Yet, citing “recent price movements” — the stock has skyrocketed 177% year-to-date – he tempered his rating from Buy to Accumulate. (To watch Woo’s track record, click here)
Looking at the consensus breakdown, of the 44 analyst reviews on NVDA over the past three months, 40 say Buy while 4 implore to Hold, all adding up to a Strong Buy consensus rating. The average target stands at $175, making room for one-year returns of ~28%. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
