Nvidia stock has strong growth prospects with new technology, making it a buy.

From Nasdaq: 2024-10-12 11:41:00

Nvidia (NASDAQ: NVDA) has been a top performer in the stock market due to high demand for its GPUs in AI systems. However, concerns about demand sustainability remain, with potential for sales to slow as buyers reach capacity and upgrade cycles play out. The chip business is cyclical, but new technology could drive demand beyond 2025. TSMC’s energy-efficient chips and Nvidia’s faster Blackwell architecture point to ongoing growth.

Investors considering Nvidia stock should assess its long-term prospects past 2026. While the current valuation at 45 times forward earnings may seem high, strong growth prospects and technological advancements suggest that Nvidia’s growth trajectory could continue well into the future. The upgrade cycle and demand for more efficient chips indicate that Nvidia may be well-positioned for sustained growth beyond 2026. The buy case for Nvidia appears stronger than the sell case given these factors. Investors looking for opportunities in the stock market should consider other top-performing stocks recommended by The Motley Fool Stock Advisor team, which have the potential for significant returns.

Disclosure: The author holds positions in Taiwan Semiconductor Manufacturing, and The Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The views expressed in this article are solely those of the author and do not necessarily reflect the views of Nasdaq, Inc.



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