Nvidia’s (NVDA) stock performance has remained subdued on a year-to-date basis despite the company consistently posting strong quarterly results. Broader macroeconomic uncertainties, new export restrictions to China, and questions surrounding long-term demand for its chips, especially following the launch of DeepSeek’s low-cost model, have dampened investor enthusiasm and limited the stock’s upward momentum.

However, Nvidia has staged a solid comeback as fears of a macroeconomic slowdown ease. Over the past month, its stock has climbed 22.6%.

Moreover, Nvidia recently delivered strong fiscal first-quarter financials. The company posted robust revenue growth, both year-over-year and quarter-over-quarter, reflecting the continued strength in demand for its artificial intelligence (AI) offerings.

Despite facing tighter restrictions on exports to China, Nvidia’s outlook remains resilient. Its latest guidance indicates confidence in sustaining business momentum, thanks in large part to growing demand for its Blackwell platform and a solid product pipeline. These drivers are expected to continue powering its top-line performance and provide meaningful support to its share price.

Thanks to the solid demand, Wall Street sentiment toward Nvidia remains bullish. Further, at least one analyst, Ivan Feinseth of Tigress Financial, has set a 12-month price target of $220 for the stock— the highest on the Street — which implies roughly 60% upside from current levels.

Nvidia’s Data Center Business to Power Future Growth

The momentum in Nvidia’s data center business remains solid. In its latest quarterly results, Nvidia reported $44.1 billion in revenue, a 69% year-over-year surge and a 12% jump from the previous quarter. The key catalyst behind this explosive growth was Nvidia’s data center business, which pulled in $39.1 billion in revenue, up 73% compared to the same period last year. This performance reflects strong demand for its AI chips.

Even as U.S. export controls restricted Nvidia’s access to the Chinese market for AI accelerators, the company will more than compensate for that with the ramp-up of Blackwell. NVDA’s Blackwell platform is ramping faster than any in the company's history and has already accounted for nearly 70% of data center compute revenue. The shift away from the previous Hopper generation is almost complete, with Blackwell fueling much of the recent growth in the segment.

Nvidia also launched the GB200 NVL system, and rack-level shipments to customers are now ramping up quickly. Further, the success of the GB200 is paving the way for Nvidia’s future roadmap, including Blackwell Ultra and GB300 systems. Sampling of GB300 is already underway, and production shipments are expected to begin soon. With a product roadmap stretching through 2028, Nvidia is well-positioned to capitalize on high demand.

Nvidia is also benefiting from the acceleration in AI factory deployments. These large-scale computing facilities are witnessing an increase in the number of GPU utilization, supporting NVDA’s growth. Furthermore, the transition from traditional generative AI to more advanced, agentic AI is creating new growth opportunities. To support this shift, Nvidia introduced a new open reasoning model.  

Networking business has reaccelerated after a brief slowdown. Networking revenue rebounded strongly in Q1, climbing 64% quarter-over-quarter to reach $5 billion. Customers are turning to Nvidia’s networking solutions to scale their AI workloads efficiently. Nvidia launched NVLink, the fastest switch, which already surpassed $1 billion in Q1 shipments. Moreover, Nvidia’s Ethernet-based Spectrum-X platform continues to deliver strong growth and is on track to generate over $8 billion annually. Adoption is expanding rapidly among hyperscale cloud providers and major internet companies, strengthening Nvidia’s leadership in AI networking.

Nvidia’s Growth Story Is Far From Over

Nvidia’s Q2 revenue guidance of $45 billion reflects a 50% increase compared to the same quarter last year despite tough comparisons. The surge will be driven by continued strong performance in its data center business, as well as improvements across its other businesses. The rollout of Nvidia’s next-generation Blackwell platform and its solid demand will help balance out weakness in sales to China.  

Wall Street analysts are bullish about Nvidia’s prospects and see further upside potential in NVDA stock over the next 12 months.