NVIDIA Stock Riding a Big AI Tailwind, According to Portfolio Strategists. Here’s Why Experts Predict Stock Will Continue to Trend Upward Over the Next 2-3 Years – NVIDIA (NASDAQ:NVDA), iShares Semiconductor ETF (NASDAQ:SOXX)

NVIDIA Corporation NVDA The company’s shares rebounded on Monday after dropping 14% in the week ending Sept. 6. Stock market strategists weighed in on the stock’s performance and the artificial intelligence giant’s valuation.

Reasonable valuation: Nvidia shares trade at 26 times earnings, on par with Coca-Cola and Procter & Gamble, but the company sees revenue growing 30% in 2025 and 20% the year after, Chris Grisanti, chief equity strategist and portfolio manager at Mai Capital Management, said in an interview with CNBC. The valuation is pretty reasonable, he said. “That’s why we’re interested, it ticks our boxes, and that stock is Nvidia,” he added.

The strategist also said he’s not worried about the impact of a potential economic slowdown or customers liquidating their inventory. “I’m not as worried about that because they’re not selling to consumers. They’re selling to Microsoft and Amazon AWS, because those are the companies that are building the AI ​​infrastructure,” he said.

Grisanti said that while these hyperscalers are stockpiling, they have long-term plans and a continuous supply of cash to fund them, so they have the cushion to withstand an economic downturn.

See also: How to buy Nvidia (NVDA) stock

Immediate risks: Grisanti said he’s concerned about the possibility of competitors emerging, “but we haven’t seen anything like that happen yet,” he added. He also expressed concern about antitrust concerns that have recently sent the company’s stock price plummeting.

Portfolio managers have looked closely at valuations (based on forward price-to-earnings multiples) and found them to be significantly cheaper. “The market has a somewhat outdated view of the semiconductor business,” he said, adding that semiconductors are to the 21st century what oil was to the 20th century.

There can’t be a thriving economy without semiconductors, and semiconductor stocks are less subject to economic cycles than they were 10 to 15 years ago, Grisanti said. “AI is just this huge tailwind that I have no doubt will carry Nvidia through the next two to three years,” he added.

Nvidia shares rose 0.24% to $106.73 in pre-market trading on Tuesday, according to data from Benzinga Pro. iShares Semiconductor ETF socks It fell 0.17% to $207.61.

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