Nvidia Corporation (NASDAQ:NVDA) has consistently defied skeptics, surpassing revenue expectations and expanding margins amid an AI-driven surge in demand. However, it’s reasonable to anticipate that the growth trajectory of the $3 trillion company could eventually slow, particularly if its 90% ownership of the data center market begins to erode.
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And yet, NVDA is clearly not waiting around for the competition to catch up. Speaking last week at the Consumer Electronics Show, CEO Jensen Huang highlighted the company’s efforts to lead the transition to the robot-inspired “physical AI” that can interact in tangible ways with the physical world.
This announcement was enough to convince top investor Danil Sereda that Nvidia’s leadership in the coming iterations of AI will keep the company in the winner’s circle for years to come.
“I think this will definitely impact all industries, from robotics to driverless cars, with new platforms and technology coming from Nvidia to support this,” asserts the 5-star investor, who sits in the top 4% of TipRanks’ stock pros.
Sereda explains that the expansion into other AI realms will lessen NVDA’s reliance on GPUs. In addition, the investor posits that NVDA’s existing technological superiority could very well enable the company to establish further industry-dominating verticals.
Sereda acknowledges that one of the big marks against NVDA is its high valuation, as its P/E multiple for FY2025 comes in around 45x. Looking forward, however, Sereda notes that its P/E for FY2026 should fall below 30x if one factors in EPS consensus estimates.
“The ‘overvaluation’ that might seem to exist at first glance today may be quite justified if one intends to buy and hold the stock for the medium term,” Sereda points out, adding that the firm’s efforts to diversify should create “smoother growth” beyond 2029.
Encouraged by Nvidia’s ambitious entry into the robotics domain, Sereda concludes that the company’s diversification efforts and long-term growth potential warrant a fresh perspective, issuing a Buy rating for the stock. (To watch Sereda’s track record, click here)
Wall Street is equally enamored of Nvidia. With 36 Buy and 3 Hold recommendations, Nvidia boasts a Strong Buy consensus rating. Its 12-month average price tag of $176.44 implies 32% upside potential for the coming year. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
