Top Investor Criticizes Market’s View on Nvidia Stock
Nvidia Corporation (NASDAQ: NVDA) recently reported its Third Quarter Fiscal 2026 results, showcasing unprecedented financial performance. The company’s revenue reached $57 billion, marking a remarkable 62% increase compared to the previous year and a 22% rise from the previous quarter. Both GAAP and non-GAAP gross margins exceeded 73%, which indicates robust profitability.
CEO’s Optimism Amid Market Concerns
Jensen Huang, Nvidia’s CEO, described the results as “off the charts” and highlighted the company’s entry into a “virtuous cycle of AI.” He emphasized that the demand for computing resources is continually accelerating. However, some cyclical activities have raised alarms among investors, specifically regarding the financing dynamics in the AI industry.
The exchange of billions in AI funding among a select group of companies has led to apprehensions about a potential AI bubble. Following the earnings report, Nvidia’s stock took a 4% downturn, reflecting market unease.
Investment Insights from JR Research
JR Research, a renowned investor recognized among the top 2% of stock analysts by TipRanks, believes the market is undervaluing Nvidia’s future potential. Despite acknowledging the validity of AI bubble concerns, JR argues that the fundamentals supporting Nvidia remain strong. He urges investors to look beyond these fears, stating, “Nvidia’s bull case is far from imploding.”
Growth Potential in AI Infrastructure
JR highlights that spending on AI infrastructure is projected to reach between $3 and $4 trillion by 2030. This looming demand presents significant opportunities for Nvidia. Moreover, with every new technology generation, Nvidia is expected to increase its market share within the data center ecosystem.
Nvidia’s Dominance in Efficiency
Nvidia’s architectural performance also sets it apart, as it boasts the best performance per watt in the industry. JR believes that worries about potential underinvestment outweigh the risks associated with overbuilding AI capacities. Additionally, large tech companies are projected to invest over $600 billion in AI capital expenditures by calendar year 2026, which reinforces Nvidia’s promising outlook.
Nvidia currently has a backlog of $500 billion related to its forthcoming Blackwell and Vera Rubin projects. This backlog might even underestimate the potential spending in AI, as expenditures have frequently undergone substantial upgrades in recent years.
Market Consensus on Nvidia Stock
Analysts on Wall Street generally share a positive outlook on Nvidia. With a consensus rating of Strong Buy, there are currently 39 buy ratings against only one hold and one sell rating. The average price target for NVDA stands at $257.33, suggesting an upside of more than 40%.
In conclusion, investors may find that concerns over an AI bubble are misplaced. The long-term growth potential for Nvidia remains substantial, making it a compelling option in the tech landscape.
