It has not been the loveliest of springs for Nvidia Corporation (NASDAQ:NVDA). The dominant AI chipmaker is down some 15% for the year – thanks in large part to tariff fears, export restrictions, and concerns over decreases in AI capex spending.
Another potential threat now looms, as the Chinese conglomerate Huawei is progressing with its 910D AI chip, which could very well seize market share from Nvidia’s H100 offering.
Especially now, with the Trump administration placing roadblocks on sales to China, there are growing fears that Huawei’s efforts could make the domestic firm “the hardware of choice” for Chinese companies, according to one analyst.
Nvidia, which in the last fiscal year earned about 13% of its annual revenues from China, has shared that U.S. export restrictions will cause it to absorb losses of $5.5 billion in the recently ended quarter.
Could we be witnessing a chip in Nvidia’s previously impenetrable armor?
Not according to 5-star investor Nauman Khan. Acknowledging the bear case, the investor still believes that Nvidia will remain the king of the hill for years to come.
“Trade tensions and rising competition pose risks, but Nvidia’s deep partnerships with major cloud providers and upcoming Blackwell chips provide strong growth catalysts,” explains the 5-star investor.
Khan further details that the 910 chips will not pose a real threat to Nvidia’s primacy. According to the investor, Nvidia’s Blackwell GPU is step ahead, offering greater efficiency and better software integration. In addition, Khan points out that NVDA continues to increase its partnerships with the leading cloud providers, including AWS, Microsoft, and Google.
“The 910D is a solid technical effort, but due to software lock-in, production limits, and Nvidia’s ecosystem lead, is unlikely to unseat the H100 in the near term,” adds Khan.
Of course, the declines in Nvidia’s share price this year have also created an opportunity to acquire NVDA at rather cheap levels, notes the investor. Khan details that NVDA is currently trading at a Price-to-Earnings ratio of 24x, well under the 65x multiple it averaged during the past five years.
“My suggestion is to load up while the price is attractive, and let NVIDIA’s AI juggernaut drive returns over the next several years,” concludes Khan, who rates Nvidia a Strong Buy. (To watch Khan’s track record, click here)
Wall Street heartily agrees. With 34 Buy, 5 Hold, and 1 Sell, Nvidia possesses a Strong Buy consensus rating. Its 12-month average price target of $164.23 has an upside north of 40%. (See NVDA stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.