Is Nvidia‘s (NASDAQ: NVDA) incredible run finally over? Since the company released its latest earnings report — for the first quarter of its fiscal year 2027, ending April 26 — on May 20, the stock has been trending south. Nvidia’s market cap recently dipped below $5 trillion, after peaking at above $5.5 trillion earlier this year. However, despite the market’s skepticism, there remain excellent reasons to invest in Nvidia, especially at current levels. Here’s why the stock is a no-brainer buy on the dip.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
The bull case remains intact
Nvidia’s bears will point to increased competition in the GPU (Graphics Processing Unit) market, including from companies such as Cerebras Systems (NASDAQ: CBRS), which recently went public. Others will highlight that the hyperscalers — Nvidia’s biggest customers — are increasingly relying on internally developed custom artificial intelligence (AI) chips, which could decrease their exposure to Nvidia’s hardware. Some of them are even exploring selling their AI chips to other data centers, a move that will pit them directly against Nvidia.
These are reasonable concerns. However, several factors make Nvidia’s prospects attractive despite these potential obstacles. First, Nvidia still reigns supreme in the GPU space, with a 94% market share, according to some estimates. Whatever the exact number, nobody denies that Nvidia has a runaway lead. Competitors aren’t just facing a hardware problem when trying to knock Nvidia off its pedestal. The company’s wide moat stems from its sticky CUDA ecosystem, which makes it difficult for customers to switch to competitors. Even seasoned semiconductor leaders like Advanced Micro Devices (NASDAQ: AMD) have made little progress in capturing market share from Nvidia.
Further, the company is launching a new platform, Vera Rubin (Rubin is the GPU, while Vera is a CPU, or Central Processing Unit), that is even better than its previous Blackwell architecture. The Rubin GPU is expected to offer significantly better performance and cost efficiency than Blackwell. That will help Nvidia mitigate the threat from custom AI chips, since one of their appeals is that they offer better price-to-performance for specific workloads than comparable GPUs.
