NVIDIA (Nasdaq: NVDA) is the corporate incarnation of the hopeless romantic. The company and its enigmatic CEO wax poetic about how they have the technology that will revolutionize an industry. That the world is catching on, slowly but surely. Once in a while (Google, Apple, Cisco), the hopeless romantics are right. More often, the rhetoric runs flat in a few years, and the innovation doesn't turn into profits.

NVIDIA is standing out on the ledge, torn between those two potential fates. The graphics-chip maker is wedged between two uber-competitors in AMD (NYSE: AMD) (which swallowed up rival ATI in 2006) and Intel (Nasdaq: INTC). NVIDIA proclaims that its graphics products are more than just increasingly additive to the computing experience, but also bear the keys to the future of data processing itself. It's heady stuff, debated furiously by folks much more nerdy... er, knowledgeable, than myself.

What regular investors can determine by looking over the results is that for all the technology advances made by NVIDIA -- and to be fair, there have been many -- it has yet to pack a punch where it counts: at the top and bottom of the income statement.

The most recent quarter showed a slight uptick in revenues sequentially, but sales are still down from a year ago and the peak in 2008. This is to be expected since the lion's share of sales still come from the add-on graphics cards to PCs and notebooks to weakened consumers.

Is the stock ahead of itself?
NVDIA shares have been on a tear of late, shooting up 40% the past three months. Part of the run could be buyout speculation, which has popped up now and again and centers on names like Intel, Apple, and most recently, Oracle after Larry Ellison said the company could be looking to buy in the semiconductor industry.

But let's put the 40% move into context. Today's price of $14.30 is far below the $18.50 shares traded for in January, and NVIDIA has underperformed the Nasdaq by more than 30 percentage points for the year. Still, if you believe even a slice of NVIDIA's lofty ambitions, the potential end markets are huge, as would be the shareholder returns.

Back from the ledge
NVIDIA's next four quarters should be convincing, one way or the other. The company's new Tegra 2 chips were created to be both powerful (capable of 1080p video playback) and run on low power for the next generation of tablets, smartphones, and mobile media devices. After a sputtering start, NVIDIA seems to have found a friend in Google's Android, the only software able to mount a serious fight with Apple. NVIDIA has scored dozens of Android-based design wins and sees a "significant ramp-up" in Tegra production heading into 2011.

Analysts have put pretty low expectations on the stock, forecasting only 7% revenue growth in fiscal 2011 and EPS of $0.53, which puts the forward valuation right around 28 times. At face value, that's not a screaming endorsement, but we all know how quickly estimates can change if a company executes properly. And the balance sheet is splendid, with almost $3.50 per share in cash and no long-term debt.

Will NVIDIA shares have a fairy tale 2011, or will investors just be left with bad memories and a slipper? NVIDIA's recent win with a series of tablets and smartphones could have just enough wow factor to eat into some of gaudy market share Qualcomm is racking up in Android devices.

 And I believe that graphic horsepower will be a key trait of winning mobile devices in the next decade. If NVIDIA cannot only stay relevant, but lead the way in that regard, investors should see meaningful gains in both revenues and profits.

Fool writer Ryan Barnes owns no companies mentioned in this article. Google and Intel are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor selection. The Fool has written calls (bull call spread) on Cisco Systems. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Apple, Google, and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.