Is Nvidia Still an Investible Tech Stock?

With 94% year over year growth in revenues to a Q4, 2024 record high of $113.26 Billion, it’s hard to understand why investors could doubt the value of Nvidia’s stock.

Yet with each week that passes, new events and threats emerge to make investors begin to doubt Nvidia’s long running bullish trend. Today, it was reported that Jensen Huang has been selling stock to the tune of $14 million a day. NVDA dropped 3%.  To me his sneaky actions show a lack of integrity.

When a company is in trouble, the CEO/Founder should not be selling his shares, however small the value. It simply doesn’t look good. If he needs money, he should get some credit. I’m sure he’s good for it. The move is causing shareholders to doubt their investment in Nvidia.

Today, Feb 3rd, Nvidia took another nosedive in price due to the Trump tariff threats.  It reminds all investors of the threat in general, but more importantly to the bubbled up AI sector which is been embarrassed by China’s DeepSeek.

DeepSeek’s Emergence Casts Doubt on the Trillion Dollar US AI Spend

Just this week, the China-backed company DeepSeek announced a rival AI assistant solution to OpenAI’s ChatGPT. Supposedly, its platform called DeepThink R1 could undercut OpenAI’s generative AI platform’s pricing and ruin the demand for Nvidia’s Blackwell processors.  DeepSeek then has threatened the entire US technology industry with one simple cost-effective product.  The potential losses to the US tech sector could be staggering.

Of course, DeepSeek hasn’t really been verified and the threat to national security hasn’t been assessed. Trump may try to ban it and its derivative products. Right now however, Nvidia along with other Ai chip companies and NASDAQ listed stocks are taking a beating in price.  AMD seems to be benefiting from the picture given it can supply lower-quality processors to power up DeepSeek and cheaper platforms.

You can view and use DeepSeek’s AI assistant now.

OpenAI, Google, Microsoft All Quaking about DeepSeek

While the AI software companies such as OpenAI, Google, or Microsoft are definitely threatened by the DeepSeek arrival, Nvidia may not be as much. Yet, experts point out that the sky-high valuations due to the high margin outlook might be gone forever. All of them will have to lower their prices.  So, profitability over the next 5 years is being put into question.

The recommendation of Jensen Huang has lost a lot of credibility pushing him from visionary to perhaps, snake oil salesman.

The question is, how well can the US tech sector and Nvidia gloss over this period of big uncertainty/lower credibility?  Are AI stocks the best technology stocks to buy or the best stocks to buy right now?  My guess is Nvidia will survive but the massive infusion of speculative cash coming into AI might be over.  As I mentioned before, AI hasn’t demonstrated profitability and real business results.

Jensen Huang is meeting with Donald Trump today to discuss events in Singapore and with DeepSeek. Trump has launched Stargate, a project that might increase demand for Nvidia chips significantly. All told, the US seems to be heading toward a situation where Nvidia and AMD might be favored.

Nvidia’s Weak Marketing and PR Effort

Marketing, PR, and politics determine the fate of stocks.  Value is communicated and negotiated.

However, doubts remain and it could be Huange and Nvidia’s marketing team haven’t articulated this vision, nor how Nvidia will earn trillions in the next 5 years and keep their winning streak going.  My point is that marketing to investors is hugely important to a stock’s valuation. A focus on technical features splashed in press releases is not really an effective way to market complex investment information today. Investors buy the promise and they get that from the investment media.

For instance, it was Jensen Huang’s big media splash last March introducing their Blackwell GPU platform that spawned sales and created brand dominance. We can’t expect that kind of big media extravaganza every quarter, but the company could do more on a consistent basis to remind investors of Nvidia’s crystal-clear value proposition. Because NVDA price outlook could have more to keeping competitors out of the media spotlight. It’s already beginning the year end rally jump, and Seeking Alpha points out a recent event that could really accelerate its price:

• OpenAI’s recent o3 breakthrough signals massive demand for Nvidia Corporation’s inference GPUs in the coming years.
• Nvidia now has two major vectors of scaling to pull demand from, which are pre-training compute and test-time compute.
• NVDA is best positioned to capitalize on growing inference GPU demand, given its state-of-the-art technology and supply chain mastery.

Nvidia’s Temporary Dip: Why Smart Money Sees a Golden Entry Point

The company’s current price lull is regarded as a buying opportunity. I’ve spoken about these lulls as a marketing and promotion gap, and the assumption by some industry analysts that the competition for Nvidia is growing and that they have no strategy to defend is ridiculous.  As companies such as OpenAI ramp up new products, the demand explodes again. So, it’s actually the economy and the capabilities of OpenAI, Claude, Google Gemini, Microsoft, and Perplexity that generate demand for their exceptional chipsets.

As this chart from Google Finance depicts, price volatility is intense, and has pulled back from its early November high. But with the Trump 2.0 economy with deregulation of cryptocurrency and support of AI awaiting, why would Nvidia be left behind?  NVDA still powers the stock market forecast.

Isn’t next year’s trajectory all too obvious? And is this Santa Claus rally something to wait out as a January freeze-up occurs?  There are a few talking about a 10% correction this year, (e.g., Sarat Sethi managing partern of DCLA, and Ed Yardeni of Yardeni Researh) but the data doesn’t support that well.

As discussed in the Nvidia stock post, the long-running chipset producer has carved out an almost unassailable leadership in the AI chip production sector. While others nervously clamor to catch up and grab a share of the multi-trillion dollar AI chip opportunity, each lacks the cache and business infrastructure to make them a good alternative for most businesses to use in their IT systems, including data centers.

We all know that market leaders are very difficult to unseat, and if Nvidia keeps its allies and believers informed and loyal, it is most likely to be the monopoly that most experts believe it will be for the next 5 years.

Buying the Dip

If you’re scanning the latest stock market forecasts for the next 6 months or next 5 years, or just looking for a buy the dip opportunity, NVDA is one Megacap high revenue performer available at a bargain price (currently at $134 a share).  Its meteoric growth this year has been dramatic, but of late, with global economic insecurities, China trade problems, and some believing spending on AI might falter. And with a broadening out and rotation into other sectors, some are selling off NVDA or switching to other microchip stocks.

Some believe other stocks, including small caps have a better earnings upside and more room to grow.  Broadcom is making big waves, but AMD, Intel, and Qualcomm are light years behind. As I mentioned in my post on AMD’s stock, they too have struggled in their marketing communications. Nvidia could turn it on big time, anytime, and flatten these wannabe competitors. An Blackwell price drop in late 2025 for instance would likely devastate them.

Whichever company takes the lead in assertive, impactful, engaging and persuasive marketing and promotion is going to reach influential analysts and sway their views and understanding. It’s not enough to be a leader, you must present your company as the unquestioned pre-eminent presence in a convincing, consistent fashion.

Hopper and Blackwell Systems an Unbeatable Tag Team

But there’s nothing like Nvidia. To doubt this company’s leader and innovation commitment is unwise.  Their two GPU platforms fulfill unique segments of demand.

“Both Hopper and Blackwell systems have certain supply constraints, and the demand for Blackwell is expected to exceed supply for several quarters in fiscal 2026,” Nvidia CFO Colette Kress wrote in her commentary for its third-quarter 2024 earnings report in November.

Nvidia’s management and marketing team may not be articulating the value of its fast-growing collection of Nvidia Inference Microservices, or NIM for short. They expect it will be a significant source of software revenue growth as an extension of the Nvidia AI Enterprise platform.  NVIDIA’s CUDA (Compute Unified Device Architecture) software plays a pivotal role in its Network Interface Module (NIM) capabilities and its business service offerings, particularly in the AI, high-performance computing (HPC), and cloud industries. Cloud hyperscalers like Amazon, Microsoft, and Alphabet are driving Nvidia’s booming chip sales.

Doubters feel NVDA’s sales peak will end by 2026 leaving it diminished earnings and nowhere to go.  But they’ve got the hardware/software vision that enterprise buyers will believe in.

Let’s look at its key financials right away.

• Revenue: $35.1 billion, a record quarterly high, up 17% from the previous quarter and 94% from the same period last year
• Data Center revenue: $30.8 billion, a record quarterly high, up 17% from the previous quarter and 112% from the same period last year
• Earnings per share: 81 cents, beating the Zacks Consensus Estimate by 8%
• Growth: The top line grew 94% year over year and 17% sequentially
• End markets: Record sales in the Data Center end market, along with higher sales in the Gaming, Professional Visualization, and Automotive end markets

NVIDIA’s outlook for the third quarter of fiscal 2025 includes:

• Revenue expected to be $32.5 billion, plus or minus 2%
• GAAP and non-GAAP gross margins expected to be 74.4% and 75.0%, respectively, plus or minus 50 basis points

The Company Providing the Processors for the AI Revolution

CEO Jensen Huang said he believes the AI era is ushering in a new Industrial Revolution, where data centers will be transformed into AI factories as technology becomes fully dependent on AI. Nvidia A will feed the $2.3 trillion cloud computing market (by 2032), which has an insatiable hunger for accelerated computing architectures which are powered by NVDA GPUs.

So let’s summarize Nvidia’s business advantage and why it remains one of the hottest and best stocks to buy.

• Dominance in GPU technology
• Dominant brand recognition — first choice consideration for hyperscalers
• Diversified product portfolio
• Strong strategic business partnerships
• Innovative microprocessor technologies
• Massive revenues, high margins and strong cash flow
• Industry-leading research and development team
• Significant market share in gaming sector
• Best power saving technology and a commitment to sustainability

I’m obviously biased about NVDA’s stock price outlook, but most analysts still give it a strong buy rating.

Take another look at the NVDA stock review and get deeper into the company’s revenue, market demand, and cost fundamentals before your decision to buy.   A positive stock market forecast for megacaps is supported by the FED’s high-for-longer policy which is believed to be net positive for Mag7 stocks.

Enjoy your golden investment opportunity in these amazing years ahead for the United States and investors.

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