The Future of Nvidia: Still a Smart Buy After the Surge?

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Nvidia (NVDA) stands tall, a towering figure in the sun-scorched desert of the artificial intelligence (AI) market, a beacon of hope for those who dare to believe that progress can come from the unseen forces of silicon and code. This company, the shepherd of GPUs that power the world’s most complex AI systems, holds sway over giants like OpenAI, Microsoft, and Meta Platforms, whose creations hum and whir with Nvidia’s heart at their core. It is a source of power, both literal and metaphorical, for an industry that refuses to slow its rapid march forward.

In the last five years, Nvidia has surged ahead like a river breaking free from the mountains, rising by a staggering 1,230%. Revenue has swollen from a modest $10.9 billion to an impressive $130.5 billion, a journey marked by an average growth rate of 64%. Its adjusted gross margin, once a humble 62.5%, has now swelled to 75.5%, while net income exploded with a compound growth rate of 83%, from $3.6 billion to a towering $74.3 billion.

Such numbers have propelled Nvidia into the realm of giants, making it the world’s most valuable company, its market cap now a stratospheric $4.41 trillion. But here, beneath the shine of these astronomical figures, the question persists: Should one still hold faith in Nvidia’s stock after its soaring ascent? Let’s walk the tightrope between the bulls and the bears, and see where the winds blow.

Why the bulls still have faith in Nvidia

The bulls, those optimistic wanderers who see the future through the lens of endless opportunity, would say that Nvidia’s stock is still a fine bet. They would point to its unrivaled dominance in the market for discrete GPUs – the essential tools of the AI revolution. These chips are the very backbone of the AI engines running across the world, and Nvidia controls more than 90% of this precious market. The sheer demand for AI products is expected to grow at a compound rate of 31.5% from 2025 to 2035, according to Grand View Research, fueling Nvidia’s relentless rise.

But it’s not just the numbers that speak for Nvidia. It’s the way Nvidia holds its ground. The company’s CUDA programming platform has become the gold standard for AI development, creating a situation where developers, once they’ve written their programs in a common language like C++ or Python, find their work optimized for Nvidia’s hardware. This is no mere advantage – it is a stranglehold on the future of AI development, ensuring that Nvidia’s chips are the ones that power the next generation of AI applications.

Sure, there’s a shadow on the horizon: AMD (AMD) has entered the fray with its own AI chips, attempting to carve out a piece of the market with its more affordable Instinct MI300X GPUs. But even with this competition, Nvidia’s Blackwell GPUs still outperform AMD’s chips when it comes to large-scale AI and high-performance computing tasks. In the world of corporate alliances, Nvidia has also formed lasting relationships with the giants of the cloud, like Amazon Web Services (AWS), Microsoft Azure, and Alphabet’s Google Cloud. These partnerships create a sturdy moat around Nvidia’s business, making it difficult for rivals to break through.

Analysts project that from fiscal 2025 to 2028, Nvidia will continue its growth at an impressive pace, with revenue and earnings per share (EPS) both increasing at 36% annually. At $183 per share, the stock still seems reasonably priced for those willing to bet on the future of AI.

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Why the bears remain cautious

The bears, however, have a different tale to tell. They remind us that Nvidia’s path is not one of unbroken triumph. The company’s exposure to the ever-volatile world of international trade, with its web of tariffs and regulations, could spell trouble. U.S. regulators have already blocked Nvidia from sending its top-tier A800 and H800 GPUs to China, and the ban has since expanded to include its less powerful H20 chips. As a result, Nvidia is losing out on a significant portion of the Chinese market, which accounted for roughly 17% of its revenue in fiscal 2024, and 13% in fiscal 2025.

Moreover, Nvidia’s long-standing dominance in the AI chip market is being tested by AMD’s increasing inroads. Recently, OpenAI and Oracle have secured new AI infrastructure deals with AMD, suggesting that Nvidia’s competitors are becoming more enticing. AMD’s cheaper chips might offer a lifeline for those looking to diversify their infrastructure and reduce costs. In this game, no one stays on top forever – not even Nvidia, which has seen the slow, steady erosion of Intel’s former dominance in the x86 CPU market.

Finally, there’s the looming specter of regulation. The rapid rise of AI has not gone unnoticed by governments around the world, and tighter restrictions could put the brakes on the headlong rush into AI development. If restrictions are imposed on how AI can be used, or if it faces broader economic headwinds, the flood of money into AI infrastructure may slow down, taking Nvidia’s fortunes with it.

Which side holds the stronger argument?

In the end, the question isn’t so much about whether Nvidia will continue to rise at the same rate it has in the past five years – that much seems unlikely. But the company’s growth is still robust, its technological advantages strong, and its position in the AI landscape is more than just a passing moment. For those looking to make a calculated bet, Nvidia’s stock still holds promise. Keep an eye on its rivals, watch the regulatory landscape closely, and be mindful of the broader economic currents. At this point, the stock is worth considering, though perhaps not without a hint of caution.

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2025-10-19 14:09