Nvidia (NVDA) stock has surged nearly 70% in the past six months, recently touching an all-time high of $195.30. While that performance has pushed its valuation higher, Nvidia’s dominant role in artificial intelligence and strong demand may still justify the price.
In a recent CNBC interview, NVDA CEO Jensen Huang stated that the past six months have brought an unprecedented surge in AI-driven computing needs, calling it the beginning of a new industrial revolution. He emphasized the overwhelming demand for Nvidia’s next-generation Blackwell chips, which are central to the training and deployment of advanced AI models capable of complex reasoning.
This optimism is backed by significant investments in AI infrastructure and its major partnerships. The company’s management said during the Q2 conference call that global AI infrastructure investment could hit $3 trillion and $4 trillion by the end of the decade. As the leader in GPUs and AI networking systems, Nvidia is well-positioned to capture a large share of that spending.
Moreover, Nvidia will benefit from its deepening integration into the world’s AI infrastructure. Nvidia recently announced a partnership with OpenAI to build 10 gigawatts of AI data centers powered by Nvidia systems. Nvidia plans to invest up to $100 billion over time as each gigawatt is deployed, with the first gigawatt of systems coming online in late 2026 through its Vera Rubin platform. This is not a one-off deal. It’s a long-term investment in the backbone of global AI computing, which will support NVDA’s growth.
Crucially, Nvidia’s growth is no longer tied to any single region or customer. Despite restricted sales to China, the company’s data center momentum has continued at full strength, highlighting the broad-based global demand for its AI technology. From cloud service providers to national “sovereign AI” initiatives, Nvidia’s reach spans nearly every corner of the tech ecosystem.
The financial results reflect this. In the most recent quarter, Nvidia’s revenue hit record levels, with data center sales growing 56% year-over-year. Its Blackwell architecture has emerged as a key growth driver. In its latest quarter, NVIDIA’s Blackwell platform hit record revenues and was up 17% sequentially. The transition from its GB200 to GB300 systems has been smooth, and Nvidia has started production shipments of GB300. The company is producing roughly 1,000 GB300 racks per week, a pace that’s expected to rise further as new capacity comes online. The expansion of production capacity and its solid product roadmap position Nvidia to capture more of the swelling demand for AI infrastructure.
Meanwhile, Nvidia’s networking business has also emerged as another pillar of growth. Revenue nearly doubled year-over-year to reach $7.3 billion in Q2, as technologies like InfiniBand, Spectrum-X, and NVLink became essential to building large-scale AI clusters. New products such as Spectrum-XGS aim to enhance Nvidia’s dominance in data center networking, an increasingly critical area for AI workloads.
Beyond hyperscale customers, Nvidia is expanding into sovereign AI projects and enterprise computing. The company has also diversified across gaming, automotive, and robotics, which provide significant opportunities for growth.
Given the recent rally, Nvidia trades at a forward price-earnings (P/E) ratio of around 44x. While this may appear rich, analysts expect Nvidia’s earnings to surge 43.7% in fiscal 2026 and another 40.4% in fiscal 2027. Further, with soaring demand for AI computing power, the company’s earnings will likely accelerate, driving its share price.
Wall Street remains bullish on NVDA stock, with a “Strong Buy” consensus rating. Moreover, the highest price target of $275 implies about 43% upside from current levels.
As demand for advanced computing power accelerates, Nvidia’s leadership in GPUs, data center networking, and its next-generation platforms like Blackwell and Spectrum-X positions it well to capitalize on the AI infrastructure spending. Further, its strategic partnerships, including large-scale collaborations with OpenAI, solidify its long-term growth potential.
While the stock’s valuation is rich, Nvidia’s solid earnings growth potential, expanding production capacity, and diversified revenue streams provide strong justification for its premium. In short, Nvidia stock is a compelling long-term investment despite the recent run.
On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com