Nvidia (NASDAQ:NVDA) stock continues its record-breaking streak, as it races toward the $5 trillion valuation mark – just weeks after breaching the $4 trillion mark.
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Yet, NVDA’s journey through 2025 hasn’t been entirely smooth. Early in the year, concerns over excessive AI capex by hyperscalers weighed on the stock before the tech giants ultimately confirmed massive investment plans that reignited investor enthusiasm.
Still, all good things come to an end eventually. Could the AI spending spree be on the cusp of slowing down?
One investor, known by the pseudonym Simple Investment Ideas, believes the AI infrastructure race is only gaining steam, pointing to Elon Musk’s latest advances with Grok 4 as a sign that the urgency to expand compute capacity is intensifying across the board.
“AI progress is driven primarily by scaling compute and data, not by new algorithms, as shown by Grok 4’s performance leaps,” explains the 5-star investor. “Hyperscalers are incentivized to over-order GPUs to avoid falling behind, fueling an arms race in AI infrastructure investment.”
That arms race, Simple Investment says, plays directly into Nvidia’s hands. The company’s advantage lies not just in cutting-edge technology, but in its unmatched ability to support the brute-force scaling needed to power increasingly complex AI models.
And it’s not just about compute power, it’s also about energy. Training Grok 4 reportedly consumed 6 GW-hours of energy, enough to power a city for an entire day. That level of demand underscores why Nvidia’s energy-efficient accelerators are becoming essential tools for AI leaders.
“The Blackwell GB200 only further extends these advances. When the laws of thermodynamics and scale converge, the advantage that Nvidia holds almost seems unfair,” notes Simple Investment.
Moreover, Nvidia’s CUDA platform serves as the backbone for AI development across academia and industry. Simple Investment highlights how CUDA’s deep integration – from low-level optimization to high-level domain abstraction – creates a productivity moat that rivals struggle to breach. This all-in-one ecosystem not only streamlines AI deployment but also attracts thousands of software vendors and engineers to standardize on Nvidia’s stack. As AI adoption accelerates, this sticky software advantage is poised to become an increasingly powerful driver of long-term growth.
With infrastructure needs surging and Nvidia supplying the tools to meet them, the AI boom that has propelled the company’s rise is unlikely to let up. To this end, Simple Investment’s recommendation is simple: Buy NVDA. (To watch Simple Investment Ideas’ track record, click here)
Wall Street appears to echo that sentiment. With 34 Buy ratings easily outpacing 3 Holds and just 1 Sell, NVDA holds a Strong Buy consensus rating. (See NVDA stock forecast)
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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.