‘It’s Tough to Beat,’ Says Investor About Nvidia Stock

For a company delivering extraordinary growth, Nvidia (NASDAQ:NVDA) has recently faced an unusual problem – skepticism.

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The chipmaker’s GPUs remain the backbone of today’s AI systems, and demand for them has surged as companies rush to train powerful models. That surge has pushed Nvidia into a league of its own within the semiconductor industry.

The numbers underline just how dramatic the expansion has been. Nvidia’s latest results showed revenue reaching $68.1 billion, up 73% year-over-year, while margins hovered around 75%. Looking ahead, the company expects Q1 FY2027 revenue to climb to roughly $78 billion.

Yet, despite those blockbuster results, investors continue to wrestle with a lingering question – whether the enormous spending fueling the AI build-out can keep going at the current pace.

One investor, known by the pseudonym Pythia Research, acknowledges the concern but argues there is more to the story.

“The company is not just riding the AI train; it is slowly turning itself into the platform for the entire stack of artificial intelligence,” states Pythia.

For instance, it’s not just the hyperscalers that are driving the growth. Sovereign AI spending is also increasing, notes Pythia, as it more than tripled to reach $30 billion during Nvidia’s 2026 fiscal year.

Moreover, enterprises and model developers are building their own inference infrastructure. In other words, the sources of demand are broadening – making the AI boom less dependent on a handful of large technology companies.

However, Pythia also points out that this isn’t just about the GPUs. While the gaps in chip performance can close over time, it will be difficult for other hardware providers to compete with Nvidia’s “integrated stack of hardware, networking, and CUDA-based software.”

The last quarter provided a concrete demonstration of this dynamic. Pythia notes that two-thirds of the company’s data center sales were for Grace Blackwell systems.

“If Nvidia continues to increase the percentage of the value chain it captures within the AI cluster, the conversation about GPU competition is not as relevant as the investment community makes it out to be,” adds Pythia.

Nor is Nvidia content to rest on its laurels, as it is currently pushing forward with its Rubin architecture. This should ramp while demand for Blackwell remains robust, ensuring that there are no lulls in Nvidia’s business.

“Nvidia’s moat keeps expanding,” emphasizes Pythia, who rates NVDA a Strong Buy. (To watch Pythia Research’s track record, click here)

Wall Street doesn’t offer much of a counterargument. With 38 Buys and only 1 Hold, NVDA enjoys a Strong Buy consensus rating. Its 12-month average price target of $273.61 points to ~52% upside from current levels. (See NVDA stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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