Artificial intelligence (AI) is fundamentally transforming the semiconductor industry. While there are numerous players in the semiconductor industry, Nvidia’s (NVDA) dominant position remains untouched.

Valued at $2.06 trillion, Nvidia stock has returned a staggering 48,223% to its shareholders over the last 20 years. Jim Cramer, host of CNBC's Mad Money, discussed last month why he believes Nvidia will “create the next industrial revolution.” In the words of Cramer, the chip maker "wields immense power because its software can speed up processes and innovation, as well as cut costs, for companies in a wide array of sectors."

Cramer believes Nvidia is worth its valuation even though the company’s business is more of a "behind-the-scenes kind of story." Nvidia’s high-performance graphics processing units (GPUs) are currently powering almost every industry as the AI era progresses.

Four months into 2024, the stock is up 77% year-to-date, far outpacing the tech-heavy Nasdaq Composite's ($NASX) 6.1% increase. Most Wall Street analysts expect the stock to soar as the company penetrates more industries. 

The stock has an overall "strong buy" rating, and Cantor Fitzgerald recently backed a high target price of $1,200 - implying about 36.7% upside in one year. I believe it is a realistic goal for the chip giant.

Nvidia’s Financials Are Soaring

One of Nvidia's key strengths is its ability to adapt and diversify its product offerings, which has helped it grow financially.

In the recent fourth quarter of fiscal 2024, total revenue rose an impressive 265% from the year-ago quarter to $22.1 billion. Additionally, adjusted earnings per share (EPS) also jumped 486% to $5.16 in the quarter. 

For the full fiscal year 2024, revenue and earnings jumped 126% and 586%, respectively.  In recent years, NVIDIA has emerged as a leader in the data center market. Its Data Center segment contributes the most to its top line, accounting for 83% of total revenue in Q1. The segment’s revenue increased 409% from the year-ago quarter. 

Revenue from its other segments, Gaming and Professional Visualization, increased 56% and 105% year on year in the quarter, respectively. 

Recently, Nvidia announced its decision to acquire Kubernetes-based workload management and orchestration software provider Run:ai. The agreement aims to help customers "make more efficient use of their AI computing resources."

Furthermore, the rise of autonomous vehicles has provided Nvidia with another lucrative opportunity. Nvidia's DRIVE platform offers automakers a comprehensive solution for developing self-driving cars. Though the Automotive segment fell 4% in Q4, strategic partnerships with leading automakers have the potential to enhance the performance of this segment. 

Notably, EV manufacturers such as ZEEKR, Xiaomi, and Great Wall Motor have chosen Nvidia's Drive Orin platform, while Li Auto (LI) has chosen Nvidia's Drive Thor platform for their autonomous vehicles.

Fiscal 2025 Could Be Another Strong Year

Nvidia will report its first-quarter fiscal 2025 results on May 22. Management anticipates a revenue increase of 234% (plus or minus 2%) to $24 billion. Similarly, analysts expect revenue and earnings growth of 238.4% and 527%, respectively, in Q1.

Analysts expect Nvidia to have another strong fiscal year in 2025, with revenue and earnings up by 83.4% and 92.8%, respectively. Currently, Nvidia stock trades at 33 times forward fiscal 2025 estimated earnings, versus its five-year historical average price-to-earnings ratio of 65.1x. 

I agree with Jim Cramer that Nvidia stock appears to be still reasonably priced, given the explosive growth potential of AI over the next decade or so.

What Do Analysts Say About Nvidia?

Recently, Citi analyst Atif Malik reiterated his “buy” rating on Nvidia stock, noting that AI server processor sales could double this year and grow at a 50% compounded annual rate over the next five years.

Overall, NVDA continues to maintain its “strong buy” rating among Wall Street analysts. Out of the 40 analysts covering the stock, 35 have a “strong buy” recommendation, with two “moderate buy” ratings and three “hold” ratings. 

Its average analyst target price is $948.73, which is 8.1% above current levels. Its Street-high target of $1,200 indicates an upside potential of 36.7% over the next 12 months. 

Nvidia Remains The Best AI Bet Now

Overall, Nvidia stock represents a compelling investment opportunity for those who believe in the future of technology and AI. Nvidia's relentless focus on innovation, extensive presence in a variety of industries, and strong financial performance may help Nvidia continue to rule the stock market.

Furthermore, a strong start to fiscal 2025 could cause Nvidia's stock to skyrocket. The stock is still down 10% from its 52-week high, making now the ideal time to buy this best AI bet on the dip.