Sustainable recovery of the Nvidia share? Analyst looks primarily at this key figure

• Nvidia share 2025 so far with weak performance
• Analyst: gross profit margin is the key to recovery
• Nvidia predicts the decline in margins, expert awaits relaxation in the second half of the year

The year 2025 has not yet been as good as usual for the successful Nvidia share: Since the beginning of the year, paper on the US exchange Nasdaq has fallen by 10.99 percent, the last final course was $ 119.53 (as of March 17, 2025). In the meantime, the minus had even been a whopping 22 percent since the start of the year than the share certificate on March 11 marked an annual low of $ 104.77. Above all, uncertainties about the future AI editions of the large tech companies burdened the course after the Chinese startup Deepseek showed that a competitive AI can also be developed and operated with cheaper chips. Finally, however, the Nvidia share was able to recover somewhat and won 11.73 percent within the last five trading days (as of: the final course of March 17, 2025). But will this development continue? For analyst Vivek Arya from the Bank of America, the key to a significant recovery in the Nvidia share is primarily in the development of a key figure.

Gruttom margin as a key factor for the Nvidia share

As ARYA recently wrote in an analysis, according to “Marketwatch”, the development of the gross margin is the decisive factor for sustainable recovery in the NVIDIA share-and less the AI ​​expenditure of the hyperscales. “The Nvidia share reached its top value last year (June) exactly at the time when the gross margins reached their peak of around 79 percent in the Hopper product cycle,” said the analyst according to the news side. After that, however, this key figure went downwards: In the third quarter of the 2025 financial year, the gross margin of the chip giant, according to the company, only at 74.6 percent, in the recent annual quarter, the fourth quarter of 2025, was only 73 percent.

The reason for the declining gross margin lies in the high investments in the new Blackwell product line, which reduce profitability and raise the question of whether the profit margins have already reached their climax and exceeded. “In retrospect, 79 percent were an unusually high value,” added the Bofa analyst in this context. Grossy margins in the middle 70 percent area are likely to be “closer to the trend”, Arya continues. But Nvidia also seems to be away from these too.

When does Nvidia return to the old profitability?

As Nvidia said when presenting the latest balance sheet, the company expects a further decline in gross margins to 70.6 percent (GAAP) or 71.0 percent (non-gaap) “Plus or minus 50 basis points” in the current first quarter of its fiscal year 2026. Expert Arya expects according to “Marketwatch” that the gross margin will reach its low point in the first quarter. In the second business district, it should remain stable before getting back into the middle 70 percent area in the second half of the year. Blackwell requires major changes in the entire system design, the costs of which will briefly burden the gross margin, but future changes are then easier to manage, according to the Bank of America. Specifically, the gross margin is likely to improve again as soon as Nvidia has managed the current challenges in the supply chain and at the costs, “Investing.com” writes, citing Arya. This recovery should then strengthen Nvidia’s financial performance and support a further increase in the share.

Course goal with great upward potential

Overall, the analyst of the Bank of America remains very optimistic about the Nvidia share and confirmed its “Buy” evaluation. Arya’s price target for the paper is also $ 200, which implies a clear upward potential of around 67 percent based on the current level (as of March 17, 2024). It should be crucial for this whether the gross margin rises again in the second half of the year, because “we concentrate on the gross profit span as a key indicator for Nvidia’s price law power, cost structure and supply chain version,” the analyst confirmed according to “Proactive Investors”.

However, whether the Nvidia share price is so closely linked to the development of the gross parade as analyst Vivek Arya implies. Because after the Nvidia share he mentioned in June last year, when the gross margin had reached its peak, the share certificate was able to record further records – most recently in January 2025 – although the key figure was already declining.

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