Nvidia (NASDAQ: NVDA) is currently down by more than 10% from its all-time high, but it's bound to recoup all those losses by the end of the year. The company is too deeply integrated into the artificial intelligence (AI) boom to lose momentum anytime soon, and its valuation has suddenly become quite cheap.
A strong earnings report on Aug. 26 may be enough to break the current slide and help Nvidia reclaim all-time highs. However, Nvidia looks too good at current levels to wait until earnings.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Nvidia isn't the only AI chipmaker. However, its quarterly revenue exceeds the combined quarterly revenue of Broadcom, Advanced Micro Devices, and Intel. Nvidia also grows faster than all those companies, while having higher net profit margins.
AI chip demand hasn't slowed down. It's only heating up. Nvidia's 85% year-over-year revenue growth in its fiscal 2027 first quarter shows that hyperscalers are still lining up to buy Nvidia's chips.
Nvidia's graphics processing units (GPUs) are known as the superior chips, and that gives the company tremendous pricing power. Two years ago, Nvidia CEO Jensen Huang told investors that it would be cheaper for hyperscalers to buy Nvidia chips than if competitors gave away their chips for free. If you compare Nvidia's financial results to its peers', his comments stand. Hyperscalers are willing to endure higher prices and multi-month wait times for Nvidia chips, even when competitors can offer cheaper chips and shorter wait times.
It's very hard to find a company with the type of moat that Nvidia has, especially in an industry that is growing as quickly as AI chips.
Nvidia's biggest customers are reporting higher profits and taking out bonds to buy more chips. AI models like ChatGPT and Gemini have become mainstream products, but that's just the beginning.
Physical AI resources, like humanoid robots and self-driving vehicles, are gradually gaining traction. However, these products can go parabolic in a hurry, just as AI model ChatGPT showed investors. That AI model reached 1 billion monthly active users faster than any app in history, including famed social networks.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
