Artificial Intelligence (AI) prodigy Nvidia (NVDA), the world’s third-highest-valued stock, experienced a material decline in market capitalization following its Q2 earnings in late August. However, NVDA stock has shown some vigor again, rising 5% in the last week. After temporarily surpassing the $3 trillion milestone earlier this year, investors are wondering what the future will hold. My thesis remains unchanged — I’m bullish on NVDA shares as an investment due to its clear AI supremacy and exponential growth potential.
NVDA’s Long-Term AI-Driven Growth Trajectory Remains Intact
It is well known that NVDA is positioned for a long runway of growth with top-notch clients like Microsoft (MSFT), Alphabet (GOOGL), Meta (META), and Amazon (AMZN) bulking up on their AI efforts. However, beyond these leading customers, Nvidia’s AI penetration is still rising across all industries, increasing my optimism for NVDA stock. Enterprises across industries and geographies are eager to incorporate AI benefits into their operations. Likewise, NVDA continues to enter into collaborations with top businesses.
There’s a reason enterprises are flocking to NVDA for their AI ambitions. Beyond being the leader in AI GPU processors, NVDA provides a complete end-to-end AI infrastructure that supercharges productivity. That’s something that few, if any, of its global AI peers can deliver.
NVDA Remains a One-Stop AI Powerhouse with Margin Growth
Another reason for my optimism about NVDA is CEO Jensen Huang‘s relentless focus. He is committed to transforming NVDA into a fully AI-driven data center powerhouse that covers all aspects of hardware and software under the NVDA brand.
This strategy is a key reason why NVDA can maintain premium pricing for its products, contributing to steady growth in its profit margins. However, critics argue that NVDA’s exceptional revenue and margin growth may not be sustainable. Some members of the investment community are worried about a slowdown in revenue growth over the coming years.
For context, NVDA reported an extraordinary 217%…
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