Nvidia's Stock Soars Past $3 Trillion Valuation Amid AI Chip Demand and Global Deals

Nvidia share price soars by over 5 per cent as valuation crosses $3 trillion mark amidst Saudi deal, rising AI chip demand

Nvidia's stock rose over 5 per cent, pushing its value past $3 trillion. New global deals and upcoming faster AI chips are boosting investor confidence, despite trade worries and fears of lower tech spending.Nvidia share price went up by more than five per cent on Tuesday. This led to Nvidia's total value soar past the $3 trillion mark. It is the first time since February that Nvidia has crossed this $3 trillion mark. Nvidia stock skyrocketed 5.7 per cent and was the biggest single force lifting the S&P 500. Nvidia CEO Jensen Huang announced a new partnership with Saudi AI company Humain, a deal which will see the latter use Nvidia's chips for its data centers. According to a Bloomberg report, the Trump administration may allow UAE to buy over 1 million Nvidia chips. These sales were earlier restricted by Biden's rules on chip exports. This shows that more countries, not just China, are important for Nvidia's business. Nvidia is a technology company that makes highly advanced computer chips. These chips are mainly used for doing tasks related to Artificial Intelligence (AI). Since the beginning of 2023, Nvidia became very valuable, as its market value grew by $2.5 trillion. But now, Nvidia's stock has tanked down by 22 per cent from its peak value, mostly because of worries about global trade tariffs launched by US president Donald Trump. The fear of an ensuing economic recession might lead to Nvidia's customers spending less money on buying its chips. Even though computer chips are not taxed under old U.S. tariffs, investors are still worried. However, big AI companies are still spending a lot on Nvidia's chips. Nvidia's latest chip, the H100 GPU, was the most popular for AI in 2023. Nvidia had 98 per cent of the AI chip market in 2023. Newer chips are coming, Blackwell and Blackwell Ultra series. The latest chip is Blackwell Ultra GB300 coming in the second half of 2025. These new chips are up to 50 times faster than the H100. Perfect for next-gen AI called "reasoning models". These models are smarter and cleaner, but take longer to think. Users may leave if the model is too slow, so faster chips are needed. CEO Jensen Huang claims that the new AI models would need 100 X more power than the current models. More power- hungry models can shoot up chip sales for Nvidia, despite the current global trade tensions. Some of Nvidia's high- value clientele include names like Meta (Facebook), Amazon, Microsoft, Google. Together, these tech powerhouses plan to splurge nearly $320 billion in 2025 on just AI infrastructure and chips. Meta even increased its spending plan to $64-72 billion, from a previous range of $60-65 billion. Nvidia will announce its financial results for the first quarter of fiscal year 2026 which is February-April 2025. Investors are very interested in these results. Nvidia's expected revenue is around $43 billion, 65 per cent more than last year. Expected Earnings Per Share is about $0.89, 46 per cent more than last year.90 per cent of the money will come from data center chips used for AI work. Investors will look at Nvidia's future forecast next quarter. They want to know, will customers still spend big on AI? Wall Street expects $46.4 billion revenue for the next quarter. If Nvidia predicts less than this, the stock might fall. If Nvidia gives a strong forecast, the stock will likely rise. Stock is currently cheaper than usual, It trades at a P/E ratio of 40. Its 10-year average P/E ratio is 59.7. If Nvidia reaches its expected earnings of $4.41 per share in 2026, the stock could go up by 126 per cent to match the average. At Nvidia's event in March, CEO Huang said, AI data centers will need to spend $1 trillion each year by 2028. Nvidia may also give updates about a future chip called Rubin, Rubin will be 3.3 times faster than Blackwell Ultra. Expected to come out in 2026. Nvidia's May 28 report could calm investor fears, prove that customers are still spending on AI chips, and announce powerful new chips for the future. If all this happens, Nvidia's stock may go up sharply. This may be a great time to invest before the stock rises again. Why did Nvidia's stock go up recently? Nvidia's stock rose due to strong global demand, new international deals, and high expectations for its next-generation AI chips. Will Nvidia's new Blackwell chips be faster than current ones? Yes, the Blackwell Ultra chips are expected to be up to 50 times faster than Nvidia's current H100 chip.

Prediction: Nvidia Stock Is Going to Soar After May 28 | The Motley Fool

Nvidia (NVDA 5.41%) added an eye-popping $2.5 trillion to its market capitalization since the start of 2023, thanks to surging sales of its data center chips, which are the best in the world for processing artificial intelligence (AI) workloads. However, Nvidia stock is down 22% from its all-time high as investors try to navigate growing tensions between the U.S. and its trading partners. Although semiconductors are exempt from President Donald Trump's tariffs, investors fear trade tensions could cause an economic slowdown, which will force Nvidia's customers to spend less money on chips and components. Based on the recent guidance investors received from some of the most powerful AI companies, there is no sign of a spending slowdown just yet. But investors will receive an important update on May 28, when Nvidia releases its financial results for its fiscal 2026 first quarter (ended April 27). Here's why I think its stock will soar following the report. Nvidia's H100 graphics processing unit (GPU) was the hottest data center chip on the market for AI developers in 2023, giving the company a staggering 98% market share that year. It continued to dominate sales in 2024, but developers are now lining up for Nvidia's newer chips, which are based on its Blackwell and Blackwell Ultra architectures. The new Blackwell Ultra GB300 -- which will start shipping in the second half of this year -- can deliver up to 50 times more performance than the H100 in certain configurations, making it ideal for next-generation "reasoning" AI models. These new models spend more time "thinking" in the background than traditional large language models (LLMs), cleaning up potential errors to deliver the most accurate responses to the end user. However, Nvidia CEO Jensen Huang says reasoning models need 100 times more computing power to offset the additional tokens (words, punctuation, and symbols) they consume, and to speed up the thinking process -- otherwise, users might abandon them because they are too slow to render responses. This growing need for additional computing capacity will help support Nvidia's sales for years to come, and global trade tensions are unlikely to stand in the way. Meta Platforms, Amazon, Microsoft, and Alphabet are four of Nvidia's top customers. They entered 2025 expecting to spend approximately $320 billion combined on AI data center infrastructure and chips, but Wall Street was recently concerned that tariffs would impact their core businesses, and force them to lower their forecast capital expenditures (capex). However, those four companies recently reported their latest quarterly financial results, and none of them slashed their capex plans. In fact, Meta Platforms revised its forecast capex range upward to between $64 billion and $72 billion, from a previous range of $60 billion to $65 billion. Nvidia's guidance suggests its fiscal 2026 first-quarter revenue will come in at around $43 billion, representing 65% growth compared to the year-ago period. If previous quarters are anything to go by, the data center segment will represent around 90% of the company's total revenue. This is where sales of AI GPUs and components are accounted for. According to Wall Street's consensus estimate (provided by Yahoo! Finance), Nvidia could also deliver earnings per share (EPS) of $0.89 during the first quarter, which would be a 46% increase from the year-ago period. This is an important number for investors to watch, because it influences the company's stock price and valuation. Wall Street analysts will also be laser-focused on Nvidia's guidance for the current fiscal 2026 second quarter, because it will tell them whether the company expects at least some customers to start pulling back on their AI spending due to the economic uncertainty triggered by global trade tensions. Analysts will be looking for total revenue guidance of around $46.4 billion, based on the consensus compiled by Yahoo!. A forecast below that figure could result in a sell-off in Nvidia stock. Although investor fears about economic headwinds pushed Nvidia stock down 22% from its all-time high, I think its Q1 financial report on May 28 could set the stage for a sustained upside move, especially if Huang officially puts those concerns to bed. Valuation is a key reason why. Based on the company's fiscal 2025 EPS of $2.99, its stock trades at a price-to-earnings (P/E) ratio of nearly 40 as of this writing, which is a steep discount to its 10-year average of 59.7. Plus, Wall Street expects Nvidia to deliver $4.41 in EPS during fiscal 2026, placing the stock at a forward P/E ratio of 26.4. In other words, the stock would have to soar by 126% over the next year just to trade in line with its 10-year average P/E ratio of 59.7. But the long-term picture looks even more exciting. At Nvidia's GTC conference in March, Huang told the audience he expects annual data center spending to reach $1 trillion by 2028, primarily because of the computing power required by reasoning models. On that note, Nvidia might even provide an update on its upcoming Rubin GPU architecture on May 28, which could deliver a further increase in performance of 3.3 times compared to Blackwell Ultra. It's expected to officially launch sometime next year, and it'll pave the way for developers to create even more advanced reasoning models. Simply put, I think the May 28 report will not only put short-term sales concerns to bed, but it will also remind investors that Nvidia is looking to dominate the AI industry for years to come.

3 Reasons Why Nvidia Is Still a Must-Own Stock | The Motley Fool

Nvidia (NVDA -0.52%) has been one of the best-performing stocks in the market since early 2023, but some investors are starting to wonder if its incredible run is running out of steam. I'm not in that group. The economy is still in the early stages of what is shaping up to be a generational shift, and Nvidia is right at the heart of it. There are plenty of reasons investors should hang on to their Nvidia shares (or buy more). But I want to focus on three that have me convinced that Nvidia is still a must-own stock. In terms of overall excellence, Nvidia's graphics processing units (GPUs) are best in class, which explains why its products are so dominant. GPUs are designed to handle tough computing tasks due to their ability to process multiple calculations in parallel. This gives them a leg up in processing tasks like artificial intelligence (AI) model training. In a separate but related issue, GPUs have been integral to facilitating the move from on-premise computing to cloud computing, powering the data centers that make cloud computing work. The buildout of AI and the data centers to facilitate AI processing is scaling up at a fast pace, but recent concerns about a global economic slowdown and rising uncertainty related to ever-changing tariff policies has left some investors wondering what effects this will have on Nvidia. At the moment, most AI hyperscalers have confirmed plans to spend record amounts on building data centers, which is excellent news for Nvidia. Even better, Nvidia expects this increased spending to persist over multiple years. Using third-party data, Nvidia estimated that about $400 billion was spent on data center capital expenditures in 2024. Nvidia management expects that to rise to $1 trillion by 2028. Because of their size, data centers take years of planning to build, so growth of this magnitude over the next few years is quite plausible. Data centers have grown to become Nvidia's biggest business segment, and it looks like it will grow even bigger going forward. Artificial intelligence usage has certainly ramped up over the past few years, but it's nowhere near peak usage. Businesses worldwide are still working on integrating AI into their operations, which will require more computing power to support the increased workloads. A survey from North Carolina's Elon University estimates that 52% of U.S. adults have used a generative AI model at least once. Of this group, only 24% said they used AI for work activities. For frequency of use, only 34% said that they use it once daily, and 10% said that they use it constantly. So, there's still a lot of room for growth with generative AI tools, and Nvidia will benefit from this buildout. Somewhere along the way, Nvidia gained a reputation for being an expensive stock. While it has sometimes had what would be considered an expensive valuation, its valuation is relatively reasonable right now. Nvidia stock trades for about 28 times forward earnings, which isn't bad considering that many of its big tech peers trade in this valuation range. Nvidia's stock might be considered relatively expensive using the trailing earnings metric (42 times earnings), but using the trailing earnings metric doesn't give Nvidia any credit for the growth it's about to deliver. Essentially, Nvidia has about one year's worth of growth baked into the stock price, so if it can continue growing at a good pace over the next year (and there are already monster data center growth projections out there, as discussed above), the stock will justify its current price. Nvidia is a top investment in the AI realm because of its universal usage. As long as AI continues to become more popular, Nvidia will continue to be a successful stock pick.

Nvidia Stock Soared This Week. Why There Could Be More Gains Coming Soon. | The Motley Fool

It was only three weeks ago that Nvidia (NVDA 0.06%) stock was trading for less than $100 per share. As of early Friday trading, investors have to pay 35% more than that. This week alone, Nvidia shares have surged 16.2%, according to data provided by S&P Global Market Intelligence. That's because many of the concerns of slowing growth and declining spending for its advanced artificial intelligence (AI) chips have been diminished with new announcements this week. Nvidia first announced it would be partnering with Saudi Arabian state-owned AI start-up Humain to build AI factories with up to 500 megawatts (MW) in capacity over the next five years. Nvidia said it would supply "several hundred thousand" of its most advanced GPU chips to power the data centers. It also doesn't appear that CEO Jensen Huang stopped there on his trip to the Middle East. The U.S. Commerce Department announced the U.S. and United Arab Emirates (UAE) will partner to build a data center campus in Abu Dhabi with a capacity of 5 gigawatts (GW). Reports also said that Nvidia could supply 500,000 AI chips to the project. Those announcements quashed concerns of slowing data center sales for Nvidia and sent the stock soaring. Yet there could be much more upside ahead. Several large tech companies in the U.S. have also reiterated plans to continue capital spending for AI infrastructure. Investors still fearing a growth slowdown may be waiting for the company to provide specific guidance as proof that investments in AI continue at a healthy pace. Yet the market is forward-looking, and the stock may move higher ahead of Nvidia's upcoming quarterly report due on May 28. It seems to have started that march higher this week, and I'd expect that to continue until that May 28 reporting date.

Did Elon Musk Just Give Nvidia Investors 40 Billion Reasons to Cheer? | The Motley Fool

When it comes to training generative AI models, Nvidia's (NVDA 0.28%) graphics processing units (GPUs) are hailed as the gold standard among industry experts. That's not exactly a novel conclusion considering the semiconductor powerhouse has amassed an estimated 90% or more of the GPU market. The more subtle idea here is how exactly Nvidia built such a gigantic lead over the competition. While it does not explicitly specify which companies buy its GPUs, it's widely speculated across Wall Street that cloud hyperscalers Microsoft, Alphabet, and Amazon, as well as Meta Platforms are among Nvidia's largest customers. Considering that these players are forecasting well in excess of $300 billion on AI infrastructure spending just this year, I wouldn't be shocked at all if these "Magnificent Seven" members are repeat customers of Nvidia. But beyond the typical mega-cap AI names is another company quickly emerging as a top client. Let's explore how Elon Musk's new start-up, xAI, is deploying Nvidia's hardware and assess just how much it could be spending on the industry's best chip architecture. Musk's xAI is a start-up building a large language model (LLM) called Grok, which is meant to compete with the likes of other popular LLMs such as ChatGPT, developed by OpenAI. For the last year, xAI's primary focus was building a supercomputer to train its AI applications. The initial stage of development for the supercomputer, called Colossus, used 100,000 Nvidia GPUs. Shortly thereafter, Musk and his team scaled up its GPU cluster to 200,000 chips. A couple of months ago, Musk sat down with a team of developers and talked shop about how Grok is trained and what's next for xAI. Perhaps unsurprisingly, he doubled down on securing more GPUs. At the time, he implied that the next training cluster would be five times larger than the current infrastructure. In other words, Colossus 2 would need 1 million chips (five times the 200,000 referenced above). He estimated the total cost for this project would fall between $25 billion and $30 billion. However, according to a more recent report from Beth Kindig, the CEO and lead tech analyst at the I/O Fund, Colossus 2 may cost closer to $40 billion. Considering Nvidia's chips sell for between $30,000 and $40,000 on average, it's not unreasonable to think Musk's next big project could cost tens of billions of dollars -- as Kindig implies. One of the main concerns surrounding an investment in Nvidia right now is the rise of custom silicon. Even though the hyperscalers all buy its GPUs today, each is also working on developing its own chips in-house. When you layer on top that Advanced Micro Devices (or AMD) is quickly gaining steam in the data center realm, there are legitimate reasons to be concerned about Nvidia's current growth trajectory. Check out Wall Street's revenue and earnings forecasts above for Nvidia over the next couple of years. While the company's growth may begin to show some signs of deceleration, I'd say this is actually quite normal for a mature business, especially in the face of rising competition. The bigger idea underscored by the financial profile above is that industry analysts are still forecasting growth for Nvidia over the next couple of years. In addition, if xAI does spend near the higher end of the estimated total cost I referenced above, this also showcases that the chipmaker is able to maintain some relative pricing power despite the intensifying competitive landscape. I think these trends suggest that even if the cloud hyperscalers begin to diversify away from Nvidia, and AMD maintains its current momentum, it is still in a unique position, with emerging customers such as xAI willing to absorb demand from traditional customers. Right now, Nvidia stock is trading near its lowest price-to-earnings (P/E) multiple in a year. I think concerns around tariffs, export controls in China, and rising competition have all made for a short-term souring on the semiconductor leader. But if the forecasts above and Musk's aggressive buying of Nvidia GPUs say anything, it's that the company shouldn't have much trouble fulfilling demand. I think now is a great opportunity to take advantage of Nvidia's stock price action and prepare to hold for the long run.

3 Reasons to Buy Nvidia Stock Hand Over Fist Before May 28 | The Motley Fool

Every previous time that shares of Nvidia (NVDA 0.28%) fell 30% or more presented a tremendous buying opportunity for investors. History appears to be repeating itself. Nvidia has mounted a strong comeback after declining as much as 37% from its previous peak set early this year. Is it too late to get in on the rebound? I don't think so. Here are three reasons to buy Nvidia stock hand over fist before May 28. Why May 28? That's when Nvidia is scheduled to announce its results for the first quarter of fiscal year 2026, which ended on April 27, 2025. Quarterly earnings updates often provide nice catalysts for the chip stock. Based on Nvidia's past performance, there's a good reason for investors to be optimistic about the Q1 update sparking a further surge in the company's share price. The GPU maker has topped consensus Wall Street earnings estimates in each of the previous four quarters by at least 5%. Granted, an earnings beat doesn't always translate to a bump in Nvidia's share price. For example, the company reported adjusted earnings per share (EPS) of $0.89 in the fourth quarter of fiscal 2025, while analysts expected adjusted EPS of $0.85. However, Nvidia's shares fell despite the better-than-expected earnings. That could happen again, even if Nvidia outpaces Wall Street's earnings projections. But my hunch is that investors are looking for a reason to be bullish about the once-high-flying stock again. If I'm right, a positive earnings surprise could be just what they need to resume piling into the stock. We can't assume that Nvidia will beat earnings estimates just because it has done so in the past. However, hints from several major customers are encouraging about the company's prospects of exceeding expectations. Amazon CEO Andy Jassy said in his company's Q1 earnings call that Amazon Web Services (AWS) has been aggressive in installing Nvidia AI chips as well as its own Trainium chips. He added, "[A]s fast as we actually put the capacity in, it's being consumed." Jassy noted that AWS will deploy "a lot more" of Nvidia's next-generation GPUs and its Trainium chips over the next several months. Microsoft continues to expand its data center capacity, opening new data centers in 10 countries in its latest quarter. CFO Amy Hood said in the fiscal 2025 Q3 earnings call that demand is outpacing capacity for AI services. She revealed that Microsoft "expect[s] to have some AI capacity constraints beyond June." That bodes well for Nvidia. Sundar Pichai, CEO of Google and its parent Alphabet, highlighted Google's ties with Nvidia in his company's Q1 earnings call. Pichai noted, "Our strong relationship with Nvidia continues to be a key advantage for us and our customers." He added that Google Cloud was the first cloud provider to offer Nvidia's B200 and GB200 Blackwell GPUs to customers and planned to deploy Nvidia's new Vera Rubin GPUs as well. Speaking of Blackwell, Nvidia CEO Jensen Huang stated in his company's last quarterly update that demand for the new GPUs is "extraordinary." CFO Colette Kress mentioned in her comments, "We delivered $11 billion of Blackwell revenue to meet strong demand. This is the fastest product ramp in our company's history, unprecedented in its speed and scale." I expect Blackwell to be the key source of good news for Nvidia when the company reports its fiscal 2026 Q1 results later this month. Kress expects a "significant ramp" for the new GPU in Q1. The good news probably won't be just about the Q1 numbers, though. Nvidia plans to launch its Blackwell Ultra GPU in the second half of this year. Blackwell Vera Rubin chips are expected to begin shipping in 2026. I wouldn't be surprised if Nvidia provides a rosy outlook for these next-generation chips in its Q1 update. While I think buying Nvidia stock before May 28 could be a smart move because of these three reasons, there's one reason investors might want to hold off. The Trump administration's tariffs and overall trade policies continue to cause major uncertainty for the economy, especially for Nvidia. I'm not convinced that the recent relaxation of tensions with China is as positive as some investors think. The pause in exceptionally high tariffs lasts for only 90 days. Steep tariffs of 30% on Chinese imports remain in place, while China will continue to levy tariffs of 10% on U.S. imports. Nvidia could beat earnings expectations and provide an optimistic outlook for the rest of the year. But if the trade dynamics change for the worse between now and May 28, that might not be enough to propel the stock higher over the near term. Over the long term, though, I think Nvidia's future remains bright. If you buy the stock and hold it for the next five to 10 years, I predict you'll make money -- regardless of whether you buy it over the next few weeks or over the next few months.

Prediction: Nvidia Stock Could Rally After May 28

A long-time darling of the stock market, Nvidia's (NVDA 0.28%) stock fell more than 40% from its 52-week high in January 2025 to a 52-week low in April 2025. Investors were concerned about the potential decline in enterprise spending on artificial intelligence (AI) infrastructure and the impact of tariff wars. However, investor sentiment has recently turned for the better after Nvidia announced recent developments regarding its partnership with Humain, a new AI-focused branch of Saudi Arabia's Public Investment Fund. The stock has recovered most of its losses and is up 30% in the last month. While the stock remains approximately 9% below its January high, it appears positioned to surge in the coming months, especially after it releases its first-quarter 2026 earnings results (for the period ending April 27) on May 28. Here are some reasons that support this hypothesis. Continued dominance in the AI infrastructure market Nvidia is an undisputed leader, accounting for roughly a 90% share of the data center graphics processing unit (GPU) market. The company stands to benefit significantly from the rapid expansion in data center capital expenditures, projected to increase from roughly $500 billion in 2025 to $1 trillion by 2028. Many cloud players reiterated their commitments to investing in AI infrastructure, which contradicts the narrative of a potential slowdown in AI spending. Nvidia's market dominance is also set to continue, as evidenced by the robust demand for its Blackwell architecture systems, which are in full production across multiple configurations. Blackwell is already a success, accounting for $11 billion in revenues in the fourth quarter. Blackwell has been optimized for running inference workloads, including the real-time deployment of AI models, such as computationally intensive reasoning AI or long-term thinking models. AI inference presents a significantly larger opportunity than AI training workloads, since a trained model is used multiple times in production. By offering dramatically higher price performance than previous Hopper architecture chips, Blackwell is well positioned to capitalize on this opportunity. American-made AI supercomputers and product innovation In April 2025, Nvidia announced plans to build up to $500 billion in AI infrastructure in the U.S. within the next four years in partnership with several manufacturing players. Both the AI chips and other supercomputer components will be manufactured entirely in the U.S. This move could enable the company to mitigate the risks associated with its supply chain, which is currently significantly vulnerable to geopolitical tensions. Nvidia is also committed to maintaining its technological superiority in the AI chip market. The company plans to release the Blackwell Ultra system in the second half of 2025 and the next-generation Vera Rubin architecture in 2026. In addition to hardware, Nvidia has built a robust software ecosystem comprising mainly the CUDA programming model, NVLink and Spectrum-X networking technologies, software solutions for optimizing and deploying AI models, and domain-specific libraries. With 5.9 million developers in its ecosystem, this has become a solid competitive moat, difficult for competitors to replicate. Recent developments In May 2025, the U.S. Department of Commerce revoked the Biden-era AI Diffusion interim rule, which was set to take effect on May 15. This is good news for Nvidia, as the rule would severely restrict the export of AI chips to several countries. With fewer restrictions on international sales, investors can expect stronger revenue guidance for the rest of fiscal 2026. Furthermore, U.S. Treasury Secretary Scott Bessent announced a dramatic reduction in trade tensions between the U.S. and China, with U.S. tariffs on Chinese goods dropping from 145% to 30% and Chinese duties on U.S. imports dropping from 125% to 10% during the 90-day pause period. President Donald Trump is referring to this event as a "total reset" in U.S.-China relations, which may signal a more favorable international environment in the coming months. Lower tariffs can benefit Nvidia, as the company relies extensively on the global supply chain for components and manufacturing. With reduced cost pressures, investors could see better margin projections for Nvidia in the coming quarters. Financials and valuation Nvidia's revenue growth trajectory has been exceptional for the past few years. The company guided for revenues of $43 billion, plus or minus 2%, in the first quarter of fiscal 2026, implying 63% to 67% year-over-year growth. Despite this impressive growth, Nvidia currently trades at 25.4 times forward earnings, well below its five-year average of 69.2 times. This steep discount is unjustifiable in the current market environment. Considering Nvidia's robust AI-optimized ecosystem, cutting-edge technological offerings, and historical tendency to report performance that exceeds guidance, there is a high likelihood that the company will deliver better-than-expected results in the first quarter. The company could also provide strong guidance for the second quarter of fiscal 2026. This, in turn, will boost investor confidence and could trigger either an increase in future earnings estimates, expansion in valuation multiples toward the historical averages, or both. Hence, with its current reasonable valuation, the stock seems well positioned to soar significantly in the coming months.

Billionaire Stanley Druckenmiller Dumped Nvidia Last Year. Now He Just Sold All of His Shares of a Market-Beating Monster AI Stock That's Soared 1,500% Over the Past 3 Years. | The Motley Fool

Artificial intelligence (AI) stocks have surged in recent years as the AI boom picked up speed -- investors eagerly piled into these players with the hope that AI would become the next game-changing technology, much like the Internet, or moving much farther back in history, the steam engine. This is very possible, considering AI's ability to help companies gain in efficiency, problem solve, and even develop better products faster. This investing theme hasn't only appealed to small retail investors but also to billionaires. In fact, many got in on some of the top players early and have already locked in profit. A great example is Stanley Druckenmiller, who for 30 years at the helm of Duquesne Capital delivered an average annual gain of 30% and never had a money-losing year. So Druckenmiller has proved his ability to choose winning stocks over time. Last year, now at the head of the Duquesne Family office, the billionaire made a shocking move, selling all of his shares of AI chip leader Nvidia (NVDA 0.28%) as the stock soared. He originally bought the stock in the fourth quarter of 2022, so he scored a win on the investment, but at the time of Druckenmiller's sale, it was clear Nvidia still had a bright earnings growth story ahead. Even Druckenmiller expressed some disappointment at his own move, saying Nvidia stock had gotten expensive, but he believes in the company's potential and would consider buying the stock again. Now, in the first quarter of this year, Druckenmiller has made another bold move -- this time concerning a market-beating AI stock that's soared 1,500% over the past three years. Let's take a closer look at this latest billionaire bet. First, a quick note about what's happened with Nvidia stock since Druckenmiller sold it. The billionaire could have gained a bit more if he held on an extra quarter -- he sold Nvidia in the third quarter, and it went on to climb another 14% in the fourth quarter. But if he'd held on to it through the first quarter of this year, he would have accompanied Nvidia through its 29% loss from the start of the year through its lowest point last month. All of this shows it's impossible to time the market and buy at the absolute lowest and sell at the highest -- but if you hold on for a matter of years, you don't have to do that. Long-term investing offers us plenty of time to score a very satisfactory win. Now, let's consider Druckenmiller's latest move. In the first quarter of this year, the billionaire sold all of his shares of Palantir Technologies (PLTR 1.00%), a software company that's generated explosive revenue growth amid demand from government and commercial customers. Palantir offers them AI-driven software to aggregate their data and make better use of it -- and the technology has produced game-changing results that have kept the company's momentum going. In fact, even as analysts warn that Palantir shares have become too expensive, trading for a mind-blowing 222 times forward earnings estimates, the stock has continued to rise. Druckenmiller originally bought Palantir stock in the first quarter of last year, so he held on to it for about a year. Last year, the shares surged 340%, then continued to march higher, advancing more than 70% from the start of this year through today. Druckenmiller, after winning on his Nvidia investment, scored a win on Palantir too. In both cases, Druckenmiller accomplished this by holding on for only a year or two because leading AI stocks have delivered gains very quickly -- this happens from time to time in an industry that's particularly in favor during a given period. Now, the question is, should you follow Druckenmiller and sell names like Nvidia and Palantir and move on? The answer depends on your investment strategy. It's important to remember that Druckenmiller is a professional and has the time and resources to quickly enter and exit positions -- and benefit from gains over a relatively short time period. And when Druckenmiller closes a position, it doesn't necessarily mean he no longer believes in the long-term story -- as he said regarding Nvidia last year. The billionaire may simply be allocating funds into other players that he believes could gain more quickly in the months to come. But smaller non-professional investors may find that by staying invested in a particular player -- such as Nvidia or Palantir -- yes, they may accompany the stocks through a low period or two, but over the years to come they might score an additional win. So, it's often worth holding on for a number of years, as long as the companies' long-term growth prospects remain compelling. Today, Nvidia and Palantir both offer bright outlooks thanks to their solid technology, their strong market positions, and general forecasts for AI growth this decade -- and that means holding on to these players for a number of years also could be a great move.

Billionaire David Tepper Sold 56% of Appaloosa's Stake in Nvidia and Is Loading Up On This Artificial Intelligence (AI) Titan Instead

There may be more to Tepper continuing to sell Nvidia stock than just simple profit-taking. Investors have been privy to a seemingly overwhelming number of data releases and announcements in recent weeks. From President Donald Trump's tariff policy reveal to a steady stream of economic data releases centered around inflation and jobs growth, it can be easy for something important to fall through the cracks. On Thursday, May 15, arguably one of the most important data dumps of the quarter occurred -- and it's possible you missed it. May 15 marked the deadline for institutional investors with at least $100 million in assets under management (AUM) to file Form 13F with the Securities and Exchange Commission. A 13F allows everyday investors to track which stocks Wall Street's leading money managers bought and sold in the most recent quarter (in this instance, the first quarter of 2025). Although 13Fs have their limitations -- they're up to 45 days old when filed, and therefore might present a stale picture for an active hedge fund -- they can provide invaluable insight into the stocks, industries, sectors, and trends that have the full attention of Wall Street's most-successful asset managers. While Warren Buffett is often the first name that comes to mind when investors peruse the trading activity of Wall Street's top money managers, he's far from the only prominent investor. Appaloosa Management's David Tepper, who oversees north of $8.3 billion in AUM, has an exceptional investing acumen of his own. Tepper and his team are fairly active, with Appaloosa's top-20 holdings held for just over an average of two years. But he and his team are particularly active in the tech sector. During the first quarter, Tepper continued a recent theme and sent more than half of his fund's shares of artificial intelligence (AI) darling Nvidia (NVDA 0.28%) to the chopping block, all while loading up on another market-leading AI stock. David Tepper slashed Appaloosa's stake in Nvidia in the first quarter Selling Nvidia stock is nothing new for Appaloosa's chief investor. Accounting for Nvidia's historic 10-for-1 stock split in June 2024, Tepper's fund held 4.42 million shares of Nvidia, as of March 31, 2024. One year later, this position is down to just 300,000 shares, with Appaloosa's 13F showing that Tepper disposed of 380,001 shares in the first quarter, which represents a 56% sequential quarterly reduction. The all-important question is: Why is Tepper selling shares of Wall Street's leading AI-graphics processing unit (GPU) developer? It's quite possible this persistent selling is nothing more than Appaloosa's chief locking in gains on a stock that was first purchased in early 2023 and has skyrocketed since then. But it's also possible more sinister motives are behind this selling activity than just simple profit-taking. For one, competition is picking up in a big way for Nvidia. Direct rivals like Advanced Micro Devices (AMD 1.91%) and China-based Huawei are developing next-generation AI-GPUs of their own for sale in high-compute data centers. Yet the bigger issue on the competition front may come from within. Most of Nvidia's top customers by net sales are internally developing AI chips to use in their data centers. While these chips are mostly viewed as complementary to Nvidia's hardware, they're notably cheaper and more readily accessible (i.e., they're not backlogged like Nvidia's AI-GPUs). This creates a scenario where Nvidia can lose out on future data center real estate to these internally developed chips. To build on this point, we're already witnessing evidence that competition is weakening Nvidia's greatest advantage: its pricing power. In early 2024, Nvidia's Hopper (H100) chip was commanding north of $40,000, compared to $10,000 to $15,000 per chip for AMD's Instinct series chips. But as competition has manifested in the AI arena, Nvidia's gross margin has declined in each quarter since peaking a year ago. The other concern that may be warranting David Tepper's ongoing sale of Nvidia stock is the role history has played in next-big-thing investments for more than three decades. Since (and including) the advent of the internet in the mid-1990s, every game-changing trend has navigated its way through a bubble-bursting event during its early expansion. This occurs because investors consistently overestimate the adoption and utility of a next-generation technology or innovation. With most businesses lacking a clear AI game plan and/or not optimizing their AI solutions as of yet, the likelihood of an AI bubble brewing appears to be high. No company would be more directly hit if the AI bubble bursts than Nvidia. There's a new apple of David Tepper's eye -- and it's another AI stock Though Appaloosa's 13F depicts more selling than buying activity during the March-ended quarter, David Tepper did pick out more than a half-dozen new stocks to add to his fund. Perhaps none stands out more than the 130,000 shares purchased of AI-networking specialist Broadcom (AVGO -1.76%). Broadcom's stock began to soar roughly two years ago when it introduced its Jericho3-AI fabric, which connects up to 32,000 GPUs at once. Broadcom's solutions aim to maximize the compute potential of the hardware in an enterprise AI data center, all while minimizing tail latency, which is critical for the split-second decisions being made by AI software and systems. If an AI bubble were to form and burst, Broadcom wouldn't be immune. Artificial intelligence has been its core catalyst, and a bubble-bursting event could very well encourage businesses to taper their spending on GPUs and networking solutions. But unlike Nvidia, Broadcom is substantially more diversified in its operations, and would therefore be expected to handily outperform Wall Street's AI darling in a worst-case scenario. For instance, Broadcom is one of the leading providers of wireless chips and accessories used in smartphones. Even though smartphones aren't the growth story they once were, the expansion of 5G wireless networks leads to relatively steady demand for Broadcom's chips. Broadcom has its proverbial fingers in a number of other key industries that would help partially insulate it in the event of an AI bubble. It provides a wide assortment of networking and optical solutions for next-generation vehicles, has solutions for enhancing industrial automation, offers cybersecurity solutions, and even has products for medical systems and equipment. Another reason Tepper may be loading up on Broadcom is its gross margin. Unlike Nvidia, which has seen its gross margin dip over the last year, Broadcom's been consistently climbing over the trailing-12-month period. Higher margins usually translate into earnings growing at an even faster pace than sales. Lastly, first-quarter weakness in Broadcom's stock opened the door for David Tepper to potentially scoop up shares at roughly 23 times forward-year earnings in March, which was near a two-year low.

Missed Out on Apple in 2012? Buying Nvidia Stock Today Could Be Your Second Chance | The Motley Fool

By now, it's clear that artificial intelligence (AI) is the next major technology platform. The new technology featured in chatbots like ChatGPT has rapidly gained adoption, and big tech companies are pouring tens of billions of dollars into data centers to run the computing power required for AI. Thus far, Nvidia (NVDA 0.28%) has been the biggest beneficiary of this boom, and it's easy to see why. The company's graphics processing units (GPUs) have been flying off the shelves ever since ChatGPT launched, and demand continues to outstrip supply. Nvidia dominates market share of data center GPUs, a technology the company has been advancing for decades through innovations like its CUDA programming language that makes it easy for developers to write code that can be run directly on Nvidia's GPUs, and build high-performance applications. For early investors, Nvidia has already delivered monster returns, but plenty of investors are wondering if the company's stock is still a good buy. One example from recent history offers a good corollary. As you probably know, Apple has continued to deliver strong returns to investors as it now has a market cap of around $3 trillion, but that's not only due to the growth in the business. It's also because investors drastically underestimated its growth prospects. Perhaps because it was already the most valuable company in the world, the market assigned it a price-to-earnings (P/E) ratio of just 13.5. Investors seemed unable to envision the dramatic future growth of the iPhone or Apple's services business, built around the App Store, becoming a massive cash cow. At the time, Apple was trading at a discount to the S&P 500, which was valued at a P/E of 15.9. While Apple's market cap has risen about six times, or 500%, the growth in the stock price has been nearly 1,000%, or 11 times, due to share buybacks. The gains in the stock were propelled not only by growth in the business. Apple also benefited from multiple expansion as the stock now trades at a P/E ratio of 33, accounting for a significant portion of the stock's gains. There are a number of lessons to be taken away from Apple's path over the last 13 years and its valuation in 2012. First, it's easy for investors to underestimate the potential growth of the world's largest companies. Investors can also underestimate the potential of the next big technological shift. Back in 2012, mobile technology was just at its dawn, and the boom that would drive Apple and many other tech stocks higher was just picking up steam. However, instead of factoring that into Apple's valuation, investors seemed to ignore it. Nvidia may be in a similar position today. While the semiconductor industry is notoriously cyclical, leading to skepticism about future growth for Nvidia and its AI peers, the stock looks surprisingly cheap. After a run-up over the last few weeks, Nvidia stock has gotten more expensive and now trades at a P/E of 45 and a forward P/E of just 31. That compares to a 25.7 P/E ratio for the S&P 500 and a forward P/E of 20.5. On a forward basis, the stock is also cheaper than a number of slow-growth stocks like Walmart and Costco even as Nvidia is the driving force behind the most important technology today. Nvidia might be trading at a premium to the S&P 500, but it's also growing much faster as analysts expect its revenue to increase 53% this year and 24% next year. Nvidia might not become a ten-bagger like Apple was in 2012, but just like investors were underestimating the growth of mobile technology back then, there's a good argument that they're underestimating the growth in AI today. If that's the case, Nvidia is likely to be a big winner over the next five to 10 years.

Should You Buy Nvidia Before May 28? | The Motley Fool

Nvidia (NVDA 0.01%) soared over the past two years, but in recent weeks, it's offered investors a fresh buying opportunity that some may have never believed possible. After all, the artificial intelligence (AI) chip giant's earnings have been climbing, and the AI market is set to reach into the trillions by the end of the decade. And all of this should support more gains for Nvidia's stock price. But general concerns about the economy, spurred by President Trump's plan to impose tariffs on imports, weighed on Nvidia -- and the overall stock market. Investors also worried about export restrictions that recently halted Nvidia's sales of chips to China. As a result, Nvidia stock fell as much as 29% from the start of the year through its lowest point last month. It's since started to rebound but still remains at a very reasonable price in relation to forward earnings estimates. Now, investors are wondering how long it might stay at that price -- especially with a big potential catalyst coming up on May 28. I'm talking about Nvidia's quarterly earnings report, a moment that generally offers us important updates and a glimpse into what's ahead for this industry mover and shaker. This is particularly important these days, as concern remains about the impact of potential tariffs on electronics and on the future of chip exports. Should you buy Nvidia before this key date? Let's find out. It's important to note that Nvidia has wowed investors quarter after quarter with its earnings growth and product updates and plans. The company has reported double- or triple-digit revenue growth, and that revenue has each time reached new records. At the same time, profitability on sales has been fantastic, with gross margin consistently above 70%. And even during the costly time of a product launch -- I'm talking about the recent release of the Blackwell architecture and chip -- Nvidia has managed to maintain gross margin above that level. Meanwhile, the company marches forward with its emphasis on innovation, outlining its plans to release chip and/or full architecture updates on an annual basis. Blackwell Ultra will arrive in the second half of this year, followed by the Vera Rubin architecture in the second half of next year. This should keep Nvidia in its leadership position in the AI market. Finally, in recent weeks, Nvidia has demonstrated its ability to manage challenges such as tariffs or export restrictions to China. For example, to minimize impact of potential tariffs on electronics products, Nvidia announced a major investment in manufacturing in the U.S. The company's goal is to fully produce AI supercomputers in the U.S. -- today, most manufacturing happens in Taiwan, so this represents a major shift. As for the China situation, Nvidia is looking to build a research and development center in Shanghai, according to a Financial Times report. The idea would be to develop designs to suit the needs of Chinese customers while respecting the stringent requirements of U.S. export controls, according to the newspaper. So, Nvidia is showing itself to be proactive and resourceful when faced with challenges. Now, what should you expect on May 28? Nvidia has a long track record of beating analysts' expectations, and in the recent earnings report the launch of Blackwell was going strong -- with the product generating $11 billion in revenue during its first quarter on the market. Investors already know that Nvidia will be taking a $5.5 billion charge after the U.S. further restricted exports to China -- so that specific element shouldn't perturb sentiment. Still, in spite of Nvidia's moves to manage the export and tariff issues, these risks do remain and could weigh on stock performance at any moment. And any setbacks in the tariff agreement process between the U.S. and China or the U.S. and other countries as well as any weaker-than-expected economic data represent potential headwinds for the stock. Nvidia depends heavily on the financial health of other big tech giants and their ability to spend on AI infrastructure. Considering all of this, should you buy Nvidia before May 28? Nvidia is trading for 30 times forward earnings estimates, higher than it was a few weeks ago. But it's still much lower than its peak last year and this year, making it very reasonably priced today. It's possible that positive earnings news will lift the stock and valuation, but I wouldn't expect a dramatic move in valuation that would immediately push it into overvalued territory. And though potential risks to near-term growth exist, as mentioned, in my opinion, Nvidia's positive long-term prospects are far stronger. So, Nvidia is a buy, but whether you make the move today or after May 28 it won't make a huge difference for your eventual returns -- if you invest for the long term. That's because this hot stock may get even hotter as the AI story enters its next chapters, meaning that even if it stagnates or falls at a certain point, over time, Nvidia stock could offer your portfolio a significant boost.

Prediction: Nvidia Stock Is Set for a Massive Rally After May 28 | The Motley Fool

This has been a difficult year for Nvidia (NVDA -0.52%). Shares of the chipmaker are down around 8% so far in 2025 as of this writing. But a closer look at the recent stock price action suggests investors are regaining confidence in the artificial intelligence (AI) pioneer. The stock has jumped 27% in the past three weeks, thanks to positive reports from tech giants that use Nvidia's AI chips, along with encouraging commentary from peers in the semiconductor industry. Now, the latest development in the U.S.-China tariff standoff suggests that Nvidia's upcoming results for the first quarter of fiscal 2026 (which ended April 27), which will be announced on May 28, could further boost investor confidence in the stock and send it higher. The Trump administration's decision to implement duties of 145% on imports from China last month weighed on semiconductor stocks, including Nvidia, even though the White House exempted imports of chips, processors, and certain other electronic components from reciprocal tariffs. However, there were reports that a separate set of tariffs could be announced on semiconductors. But now, the U.S. and China have agreed on bringing down the reciprocal tariffs by 115% for a period of 90 days. As a result, the duties on Chinese goods imported into the U.S. will come down to 30%, while tariffs on U.S. goods imported into China will stand at 10%. This development comes in the wake of China's rollback of tariffs on imports of microchips from the U.S. Earlier, President Donald Trump had indicated that he was willing to reduce duties on Chinese imports. All this suggests that the storm of the tariff turmoil that has weighed on Nvidia stock so far this year could be fading. Nvidia customer Meta Platforms recently indicated that it was ready to bear the increase in costs of AI hardware thanks to the tariff imposition. There were reports last month that memory manufacturer Micron Technology, which supplies high-bandwidth memory (HBM) chips for Nvidia's AI graphics cards, was imposing a tariff-fueled surcharge on some of its products to account for the increased costs. So, the tariff burden could have hurt Nvidia's sales and margins considering that it outsources chip production across various locations globally. This explains why a recent report by DigiTimes (via Tom's Hardware) states that Nvidia raised the price of its AI graphics processing units (GPUs) by up to 15% to cope with the tariff-related effects. The global economic uncertainty fueled by the tariffs could have negatively affected AI spending. Reports of a pullback by Microsoft in leasing more data center capacity in February added to this fear. However, the positive tariff-related development between the U.S. and China should mitigate the concerns about a potential AI spending slowdown, and this could result in solid guidance from Nvidia later this month. Analysts are expecting Nvidia to deliver $43 billion in revenue for fiscal Q1, an improvement of 65% from the year-ago period. That's in line with the company's guidance range. However, a surge in orders from Chinese clients could help Nvidia's top line exceed those expectations. According to a Reuters report, the likes of ByteDance, Alibaba, and Tencent placed orders for at least $16 billion worth of Nvidia's H20 AI GPUs in the first three months of 2025. That's quite significant, considering that Nvidia's revenue from China in the previous fiscal year reportedly stood at just over $17 billion. So, China could move the needle in a much bigger way for Nvidia in Q1 of fiscal 2026 and play a key role in helping the company surge past analysts' expectations. The jump in Nvidia's China revenue has been attributed to an increase in demand for low-cost AI models. Meanwhile, the company has been altering its AI chips to bring them in line with the export controls imposed on the shipments of its chips to China, something that it has done in the past to ensure access to the Chinese market. Throw in the AI infrastructure projects going on in the U.S., such as Stargate, and Nvidia's terrific control over the AI chip supply chain, the stage seems set for the chipmaker to coast past Wall Street's expectations and ensure that its newly found stock market momentum continues beyond May 28. That's why savvy investors can consider buying this AI stock right now. It's trading at an attractive 28 times forward earnings, a big discount to the U.S. technology sector's price-to-earnings ratio of 44.

Nvidia's Q1 Detonation: Why This AI Juggernaut Is About To Rip Higher (NASDAQ:NVDA)

Nvidia's evolving revenue mix supports a premium multiple. In the shorter term, I see a price target at $167.5/share, giving me an upside potential of 23.7% to the current price. NVDA is a "Buy" before its Q1 earnings release. Intro & Thesis My investment coverage of Nvidia Corporation (NVDA) spans a couple of years here on Seeking Alpha. The last time I covered the stock was in mid-March 2025 Hold On! Can't find the equity research you've been looking for? Now you can get access to the latest and highest-quality analysis of recent Wall Street buying and selling ideas with just one subscription to Beyond the Wall Investing! There is a free trial and a special discount of 10% for you. Join us today! Daniel Sereda is chief investment analyst at a family office whose investments span continents and diverse asset classes. This requires him to navigate through a plethora of information on a daily basis. His expertise is in filtering this wealth of data to extract the most critical ideas. He runs the investing group Beyond the Wall Investing in which he provides access to the same information that institutional market participants prioritize in their analysis. Learn more. Analyst's Disclosure: I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.