Nvidia stock facing concerns but evidence suggests continued growth, positive.

From Nasdaq: 2024-09-29 05:03:00

Nvidia’s stock has soared 730% since early 2023, but recent concerns have caused it to stagnate. Fears of a slowdown in AI adoption, rumors of Blackwell chip delays, margin declines, and high valuation have some investors worried. However, evidence suggests these concerns may be unfounded, leaving room for continued growth.

Tech giants like Alphabet, Microsoft, Amazon, and Meta are increasing capex to support AI, indicating sustained growth for Nvidia. Generative AI is projected to add trillions to the global economy, providing further confidence in the company’s future. Despite rumors, Blackwell chip production remains on schedule, alleviating concerns over delays.

While Nvidia’s gross margin declined in Q2, it still remains strong compared to historical averages. Revenue forecasts for Q3 show a 79% increase, signaling continued growth. With a relatively high P/E ratio, Nvidia may seem pricey but forward earnings paint a different picture, suggesting the stock is actually undervalued.

Despite recent challenges, Nvidia’s fundamentals remain solid, with strong customer spending on its products, on-track production of Blackwell chips, high gross margins, and a favorable valuation. These factors indicate a clear path for Nvidia’s future growth and potential for new highs in 2025.



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