It may seem counterintuitive to characterize a company with a $3 trillion market capitalization as a growth stock, but that's exactly the situation in which Nvidia (NASDAQ: NVDA) finds itself.
After it reported fourth quarter 2025 financial results this week, it's clear that Nvidia's growth is hardly tapering off as demand for its artificial intelligence (AI) chips remains incredibly strong. For investors, looking to carve out a niche of their portfolios with growth opportunities, Nvidia shines as an exceptional opportunity.
Even investors with only a rudimentary understanding of the AI industry and its key players probably recognize that Nvidia stands at the forefront of the rapidly burgeoning industry. But how exactly is Nvidia benefiting from the AI boom? Unsurprisingly, it's related to data centers. Skyrocketing 93% compared to the same period last year, Nvidia's data center business provided fourth quarter 2025 sales of $35.6 billion, a high-water mark for the company. This, in turn, contributed to Nvidia reporting $115.2 billion in data center sales for fiscal 2025. For perspective, Nvidia reported overall revenue of $130.5 billion for fiscal 2025, so it's clear how prominently this business figures into the company's financials.
According to Nvidia, the main driver of growth for its data centers business stems from enthusiasm for the Blackwell chip among large cloud service providers' located in the United States. On the Q4 2025 conference call, Nvidia acknowledged that "Countries across the globe are building their AI ecosystem as demand for compute infrastructure is surging." In other words, Nvidia's growth in this business hardly seems to be tapering.
Investors would be shortsighted to conclude that it's only the company's data centers business where management sees a growth opportunity. Nvidia also achieved significant growth in its automotive and robotics business. Fiscal 2025 revenue for this business, $1.7 billion, soared 55% compared to fiscal 2024.
Automakers are continually selecting Nvidia and its chips to advance vehicle's autonomous capabilities. In fact, Nvidia forecasts its automotive business alone to reach $5 billion in 2026 as manufacturers adopt Nvidia's DRIVE AGX platform and technologies. Beyond cars, Nvidia is recognizing strong demand from robotics companies. Hyundai Motor Group, for example, announced its intent to use Nvidia's solutions to advance robotics development and smart factory initiatives as well as autonomous vehicles.
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Rising 21% year over year to $1.9 billion in fiscal 2025, Nvidia's professional visualization business is also in growth mode. From 3D models to sophisticated visual effects, the company's various offerings represent powerful tools for various industries including architecture to manufacturing.
Potential investors may fear that Nvidia stock comes with an exorbitant price tag, but the reality is that the stock is attractively valued right now. Trading at 44.3 times operating cash flow -- albeit still seemingly pricey -- shares of Nvidia are changing hands at a discount to their five-year average cash flow multiple of 55.4. Similarly, Nvidia stock is trading at 44.7 times trailing earnings, which seems much more palatable after recognizing that its five-year average P/E is a much steeper 73.3.
Ending fiscal 2025 on a good note, Nvidia has the AI wind at its back with the start of fiscal 2026. Between this and the attractive valuation, now's a great time for growth investors to click the buy button on Nvidia stock.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The Smartest Growth Stock to Buy With $500 Right Now was originally published by The Motley Fool
