Nvidia (NASDAQ:NVDA) is undoubtedly the king of AI. The company’s advancements have sparked a revolution, invigorated markets, and made it the third-largest stock on Wall Street.
Last week, Nvidia released another impressive set of results in its Q2 earnings report. The company reported revenue of $30.4 billion and EPS of $0.68, beating expectations on both top and bottom lines, and also beat expectations on Q3 guidance.
Despite the strong numbers, investors appear spooked by slowing quarterly growth, concerns about delays to NVDA’s new Blackwell chip, and news that the U.S. Department of Justice is investigating the company for antitrust violations.
While Nvidia’s long-term dominance appears solid, the magnitude and rate of future growth is unclear. The key question now is how much longer Nvidia can sustain its phenomenal triple-digit year-over-year growth.
One investor who goes by the pseudonym Stone Fox Capital isn’t worried about that, and is confident that Nvidia’s best days are far from over.
“NVIDIA will eventually face margin adjustments, but the company is likely to be able to maintain high margins for another year or two before competitors catch up,” SFC said.
SFC downplayed the threat from competitors such as AMD and Intel, noting that those companies are smaller and concerns that Blackwell’s production delays would cause Nvidia to lose market share seem exaggerated.
SCF attributes much of the recent decline in NVDA shares to potential DOJ action, but again, investors aren’t too worried about this, as there’s been no (public) allegation that Nvidia is making it difficult for customers to switch to other chip providers.
For now, the investor sees the drop as an opportunity to buy back into AI GPU stocks. SCF calls the company “still firing on all cylinders” and recommends NVDA as a buy. (To watch Stone Fox Capital’s track record, click here)
Wall Street largely agrees with SFC. Over the past three months, Nvidia has received 39 buy recommendations and 4 hold ratings, giving the stock a strong buy consensus rating. The 12-month target price is $151.79, which implies a potential gain of about 42%. (See NVDA stock price forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investors. The content is for informational purposes only. It is extremely important that you always conduct your own analysis before making any investment.
