Chipmaker Nvidia (NVDA 1.13%) has been a growth beast over the past few years. The growth that the business has experienced due to artificial intelligence (AI) turned Nvidia into one of the most valuable companies in the world today, with a market cap of around $3 trillion.

Investors may be growing concerned, however, that due to the stock's massive 1,600% gains over the past five years, it may have already peaked -- and it's too late to invest in the tech company today. But Nvidia's recent earnings report highlights just how strong the business has become today, and why there can still be significantly more upside ahead for the AI stock, even if you invest in it right now.

Nvidia's profit in fiscal 2025 totaled $72.9 billion -- more than its earnings over the past 10 years combined

A lot of the attention is on Nvidia's top-line growth, but what really impresses me is its bottom line. The company's strong margins ensured that as the business grows, a lot of that growth on the top line flows through to net income and boosts earnings. And that profit growth prevents the stock from being too expensive.

The company reported its fourth-quarter earnings and its year-end numbers for the period ending Jan. 26, 2025. Not only did sales more than double to $130.5 billion for the full year, but the company's net income moved from $29.8 billion a year ago to $72.9 billion this past fiscal year. To put into perspective just how significant that number is, consider that over the previous 10 fiscal years, Nvidia's combined profit totaled around $61 billion.

The staggering size of its business today underscores the financial strength Nvidia has moving forward. The business is in excellent shape to weather rising costs while also having plenty of financial resources at its disposal to pursue growth opportunities, including potentially acquiring other companies. And with more opportunities out there, it may not be hard to see why the chipmaker's valuation can still go higher, as it arguably isn't all that expensive given its dominance.

The stock's valuation is improving

Nvidia's stock has fallen by 15% since the start of the year. Whether investors are concerned about the economy, or a slowdown in AI-related spending, there's clearly some apprehension about Nvidia's stock lately. But when you factor in the company's rapid earnings growth and its falling share price, its valuation looks much more reasonable compared with where it was a year or two ago.

NVDA PE Ratio data by YCharts

Nvidia's stock is now trading well below the price-to-earnings (P/E) multiple it has averaged over the past three years. It's a good example of how a fast-growing business that's trading at a high P/E could end up looking a whole lot cheaper in the future, as its bottom line grows.

Could now be an opportune time to buy Nvidia stock?

There's growing risk in the markets these days due to tariffs and the potential for trade wars to weigh on businesses in all industries. And that could result in more of a decline for Nvidia and other growth stocks that need to generate high levels of growth in order to attract investors; any type of slowdown may impact their valuations.

Nvidia's stock could continue to fall in value due to macroeconomic concerns, but with the business looking solid, it's an investment that may still have a lot of upside over the long haul. This can be an excellent stock to buy today, although investors should brace for the possibility of some greater volatility in the weeks and months ahead.