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Pat Gelsinger, former CEO at Intel (INTC), is not sweating over new, low-cost artificial intelligence models from Chinese startup DeepSeek. Instead, he believes that DeepSeek’s cost-effective AI model will be a net positive for the industry. He said, “Computing obeys the gas law. This means, it fills the available space as defined by available resources (capital, power, thermal budgets etc). … Making compute resources broadly available at radically lower price points, will drive an explosive expansion, not contraction, of the market. AI will be in everything going forward and today, it is orders of magnitude too expensive to realize that potential.”
And Gelsinger is putting his money where his mouth is by loading up on Nvidia (NVDA) stock.
About Nvidia Stock
Nvidia (NVDA) is a leader in specialized AI chips, and the company also supplies software to complement its hardware. More specifically, Nvidia designs and sells graphics processing units (GPUs) for the gaming and professional markets, and system-on-a-chip (SoC) units for the mobile computing market. Nvidia’s dominance in the chip market has led it to become one of the most valuable companies in the world with a market capitalization of $2.94 trillion.
NVDA stock is down 12.9% on a year-to-date basis, shedding almost $600 billion in market cap in a single day on Jan. 27 as part of the DeepSeek selloff. Yet, on a 52-week basis, the stock is still up an impressive 77%.
So, what is making Gelsinger so bullish about the Jensen Huang-led company? Let’s find out.
Solid Fundamentals
Nvidia has cemented its dominance in the semiconductor industry, delivering exceptional growth in both revenue and earnings. Over the past decade, the company has achieved a remarkable revenue compound annual growth rate (CAGR) of 37.84% and an even more impressive earnings CAGR of 59.72%.
The momentum continued in the third quarter of its fiscal 2025, with Nvidia posting record-breaking results yet again. Revenue surged to $35.1 billion, surpassing estimates of $33.2 billion, while earnings per share of $0.81 exceeded forecasts of $0.75. This marked the company’s eighth consecutive quarter of earnings beats.
Operational strength was evident as net cash from operating activities more than doubled year-over-year, reaching $17.6 billion from $7.3 billion. Nvidia ended the quarter with a formidable $38.5 billion in cash and no short-term debt, reinforcing its financial resilience.
Looking ahead, analysts expect Nvidia to maintain its industry-leading growth. The company’s projected revenue and earnings growth rates stand at 93.84% and 190.05%, respectively — far outpacing the sector medians of 5.61% and 8.79%.
Growth Drivers
The company recently unveiled the next generation of its GeForce RTX GPUs, powered by the Blackwell architecture, a development CEO Jensen Huang called the most significant computer graphics breakthrough since programmable shading 25 years ago. This launch further strengthens Nvidia’s already formidable high-performance computing portfolio, which is anchored by the H100 Tensor Core GPU — widely regarded as the world’s most powerful AI accelerator. With an estimated 90% market share in AI accelerators, Nvidia remains the undisputed leader in the space, benefiting from the unprecedented demand for generative AI and accelerated computing. According to Morgan Stanley, hyperscalers are expected to increase data center capital expenditures by 50% year-over-year, from $200 billion to $300 billion, with Nvidia positioned to capture a significant portion of this investment.
Beyond hardware, Nvidia’s software ecosystem remains a critical differentiator. Proprietary platforms such as CUDA, Nvidia AI, and Omniverse enable seamless AI scalability, while Inference Microservices significantly reduce AI deployment times, cutting processes that once took weeks down to minutes.
While emerging players such as DeepSeek are attempting to challenge Nvidia’s dominance, they do not pose an immediate threat to its business model or stronghold in the data center market. The demand for advanced AI computing remains insatiable, and companies continue to allocate massive amounts of capital to secure Nvidia’s cutting-edge GPUs.
Analyst Opinions on NVDA Stock
Overall, analysts continue to remain bullish on Nvidia stock. The consensus rating is a "Strong Buy,” with a mean target price of $178.09, indicating upside potential of about 52%.
Out of 43 analysts covering NVDA stock, 37 have a “Strong Buy” rating, two have a “Moderate Buy” rating, and four have a “Hold” rating.
