Nvidia (NASDAQ:NVDA) is a key reason that the S&P 500 closed the first half of the year up 15.3%, the Nasdaq Composite gained around 18.6%, and the Nasdaq-100 rose 17.5%. Clearly, artificial intelligence applications drive growth. And Nvidia’s products lead this digital wave. Increased investment in AI hardware infrastructure should support the company’s next-generation GPUs and AI CPUs.
Nvidia is always coming up with new ideas. For example, the NVIDIA DRIVE technology is for self-driving cars, and the Omniverse software is for metaverse and 3D internet apps. Because of these changes, Nvidia will be able to take advantage of new virtual world trends and car technology on top of AI chip sales, which are forecasted to be $200 billion this year.
Many analysts have raised their price estimates for Nvidia based on robust demand for AI gear. The average price target points to a potential gain of 27% from the last close of $111.59. If you want to invest in AI, few plays are better than Nvidia stock.
Revolutionizing AI with Hopper H100 and Upcoming Blackwell GPUs
With an estimated 80% market share in AI processors, Nvidia’s GPUs are essential to AI workloads and drive future expansion. Propelled by tech giants such as Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN), the demand for AI processors is projected to keep rising.
AI and high-performance computing depend on these GPUs. Deep learning algorithms and big language models are among the challenging AI tasks the H100 and H200 manage.
Nvidia’s ongoing innovation—introducing the Blackwell series, among other things—and strategic alliances with firms like Cisco (NASDAQ:CSCO) and OpenAI help position it for future expansion. These projects will improve its financial performance and market supremacy.
Announced for the second half of 2024, the Blackwell series is predicted to be the most potent AI processor available, surpassing present versions from rivals such as AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC). These GPUs will meet the rising market for sophisticated AI applications.
In addition, the newest desktop workstation GPUs, the Nvidia RTX 5000, 4500 and 4000, driven by the newest Ada Lovelace design, provide professional visualization, graphics and real-time rendering.
Also, the Nvidia DRIVE Orin and DRIVE Thor Platforms are automotive computer systems that enable autonomous driving and enhanced driver-assistance systems. Large manufacturers use these methods, including Li Auto (NASDAQ:LI), Great Wall Motors (OTCMKTS:GWLLF) and XPENG (NYSE:XPEV).
Nvidia Gets Lift From $6.8 Billion Plant and Key Partnerships
Strategically, Nvidia’s actions—including the $6.8 billion investment in a new chip facility by SK Hynix—showcase the robust ecosystem supporting its technologies. Moreover, Nvidia’s partnership with Chinese companies to provide AI chips assures continuous development.
With one of China’s leading cloud service providers, Alibaba Cloud, Nvidia has joined to provide AI and machine learning solutions.
Together with Tencent (OTCMKTS:TCEHY), Nvidia provides AI research and GPU-accelerated cloud gaming solutions. Tencent improves speed and user experience by running artificial intelligence systems and games on Nvidia’s GPUs.
Besides, the Omniverse platform combines 3D design and simulation space. It uses AI to address goods and services for industrial businesses and developers, thus maximizing their 3D operations.
Nvidia’s regularly excellent performance results from these projects. Up 18% from the previous quarter and 262% year-over-year, Nvidia posted a record $26 billion in first-quarter fiscal 2025 earnings.
Nvidia has just adopted a ten-for-one forward stock split. Also, the company raised its quarterly cash dividend by 150%, generating a post-split payout of one cent per share rather than four cents.
Furthermore, Nvidia improved its AI infrastructure and teamed with Google, AWS and Microsoft. Among its innovations were Quantum and Spectrum X800 series switches, AI Enterprise 5.0 and Nvidia Blackwell AI computing platform.
Nvidia Stock Still a Buy Despite Massive 2024 Rally
Based on conventional valuation criteria, Nvidia’s stock would seem overpriced. Nevertheless, its outstanding financial performance, commanding market share and future development prospects in the Ai industry make it a good investment.
Though significant insider selling sometimes points to overvaluation, the general market attitude is positive. As part of a pre-announced trading strategy, Nvidia’s Chief Executive Officer Jensen Huang has sold shares, so it would not be necessary to see this as a negative indication.
Based on strong demand for AI gear, several analysts have revised their price predictions for Nvidia. UBS (NYSE:UBS) and Wolfe Research recently boosted their price goals on Nvidia stock, thereby underscoring the company’s solid foundations and future development possibilities.
“The next industrial revolution has begun,” Huang stated, adding his business is setting the path. Therefore, consider purchasing Nvidia stock if you want to stay a step ahead.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.