Nvidia Joins Dow Jones: A Buy as AI Leader Surges 910% Since Stock Split

The Dow Jones Industrial Average is the oldest stock market index in the U.S. It tracks the performance of 30 of the largest publicly traded companies, spanning various sectors. This index serves as a key indicator of stock market performance and the overall economy. To be included in the Dow, a company must meet several criteria:

1. The company must be incorporated and headquartered in the U.S.
2. It should generate a significant portion of its revenue from U.S. operations.
3. The company must be part of the S&P 500.
4. It cannot be a transportation or utility company.
5. The highest-priced stock in the index should not exceed 10 times the lowest-priced stock.
6. The company must have an excellent reputation, exhibit sustained growth, and attract a large number of investors.

Nvidia (NASDAQ: NVDA) is the latest addition to the Dow, replacing Intel on November 8. Nvidia’s inclusion brings the total number of companies added to just three this year.

Over the past decade, Nvidia’s revenue has increased by 2,300%, while its net income soared by 8,460%. As a result, the stock price surged by 28,940%. Nvidia recently completed a 10-for-1 stock split, facilitating its entry into the Dow.

Despite significant gains, Wall Street analysts believe Nvidia’s stock still has growth potential. The company is pivotal in the AI sector, currently controlling about 98% of the data center GPU market. Nvidia’s GPUs are essential for AI processing, driving ongoing demand.

In its fiscal 2025 third quarter, Nvidia reported record revenue of $35 billion, a 94% year-over-year increase. Management forecasts Q4 revenue of $37.5 billion, indicating 70% growth. Supply constraints may hinder some growth, but increased output could boost sales.

Analysts are bullish on Nvidia’s future. Among 64 analysts as of November, 94% recommend buying the stock, with an average price target of about $170, suggesting 16% upside. Notably, Rosenblatt analyst Hans Mosesmann raised his price target to $220, indicating potential 50% gains for investors.

While Nvidia’s valuation appears high, with a current price of 69 times earnings, analysts expect EPS of $4.36 for fiscal 2026, bringing the forward P/E ratio down to about 33. This valuation may still be appealing given Nvidia’s market leadership and growth prospects.

In summary, Nvidia is a strong buy based on its growth trajectory and positive outlook from analysts. Investors interested in high-potential stocks should consider Nvidia as a key opportunity.