NVIDIA Expands AI Dominance With New Chips: Should You Buy the Stock?

NVIDIA Corporation’s NVDA GTC 2025 conference has been a resounding showcase of the company’s commitment to maintaining its artificial intelligence (AI) supremacy. With CEO Jensen Huang unveiling next-generation Blackwell Ultra and Vera Rubin AI chips, alongside strategic partnerships and product expansions, the event underscored NVIDIA’s determination to stay at the forefront of the AI revolution.Despite the stock facing short-term headwinds, its long-term growth prospects remain intact, making it an attractive buying opportunity for investors.NVIDIA’s GTC 2025: A Game-Changing AI RoadmapAt GTC 2025, Huang revealed NVIDIA’s ambitious AI roadmap, aiming to outpace competitors and reinforce its leadership in the AI infrastructure market. The introduction of the Blackwell Ultra AI processor — set to launch in the second half of 2025 — is the first major upgrade. This chip offers 1.5x faster FP4 performance and boasts 50% more memory per graphics processing unit (GPU), significantly enhancing efficiency for AI model training and inferencing.Taking its ambitions even further, NVIDIA unveiled the Vera Rubin architecture, scheduled for release in the second half of 2026. Named after the astronomer who discovered dark matter, this architecture will feature 576-GPU clusters, a massive leap from Blackwell’s 72-GPU configuration.Rubin’s ultra version, planned for a 2027 release, will push AI performance boundaries even further. Looking ahead, NVIDIA also teased the Feynman architecture for 2028, highlighting a consistent pipeline of annual chip releases.These chip advancements cement NVIDIA’s position as the go-to provider of AI infrastructure, ensuring its dominance in hyperscale data centers and high-performance computing.NVIDIA’s Strategic Partnerships and Expanding ReachIn addition to its new chips, NVIDIA announced a series of strategic collaborations that broaden its AI influence. The company is working with The Walt Disney Company DIS and Google DeepMind on the Isaac GR00T N1 platform, which is designed to accelerate humanoid robot development. This initiative aims to enable realistic and responsive humanoid robots, making AI-powered robotics more practical for industrial and enterprise applications.NVIDIA also unveiled a partnership with General Motors Company GM, bringing AI capabilities to next-generation vehicles, factories and autonomous robots. This collaboration could significantly enhance AI integration in the automotive sector, providing NVIDIA with a lucrative growth avenue.Additionally, NVIDIA is expanding its reach into telecommunications infrastructure. Through partnerships with T-Mobile and Cisco Systems, Inc. CSCO, the company is developing AI-native wireless network hardware for 6G networks. This positions NVIDIA at the forefront of next-gen wireless technology, opening up new revenue streams.Personal Supercomputers: NVIDIA Brings AI Power to DesktopsOne of the standout announcements at GTC 2025 was NVIDIA’s plan to democratize AI computing with personal supercomputers. In collaboration with Dell, HP and other manufacturers, NVIDIA is bringing data center-grade AI performance to desktop systems. These personal supercomputers will empower researchers and developers to train and fine-tune AI models locally, reducing reliance on cloud infrastructure.This move makes AI development more accessible, potentially driving widespread adoption and fueling demand for NVIDIA’s GPUs. By catering to smaller-scale enterprises and developers, NVIDIA is expanding its customer base and creating new growth opportunities.NVIDIA Dynamo: Optimizing AI EfficiencyNVIDIA’s Dynamo operating system, introduced at the GTC 2025, further enhances its AI leadership. This inference framework is designed to maximize GPU efficiency by dynamically scheduling workloads, optimizing memory usage and accelerating data transfers. During the event, NVIDIA revealed that Dynamo boosted inference requests by up to 30 times when serving the DeepSeek-R1 671B model on its GB200 NVL72 platform.By making AI inferencing faster and more cost-effective, Dynamo gives NVIDIA customers a competitive advantage, driving demand for its AI hardware and software solutions.AI Infrastructure Spending to Aid NVIDIA’s GrowthDespite concerns over AI infrastructure sustainability, NVIDIA remains bullish on continued investments. According to Bloomberg Intelligence, hyperscalers like Microsoft, Amazon and Google are projected to spend $371 billion on AI infrastructure in 2025, a 44% year-over-year increase. This figure is expected to surge to $525 billion by 2032, reflecting sustained AI investment trends.During the GTC 2025 keynote, Huang revealed that four major cloud service providers — Microsoft, Amazon, Alphabet and Meta Platforms — purchased 1.3 million Hopper GPUs in 2024, but in 2025, they have already acquired 3.6 million Blackwell GPUs, indicating growing demand. These robust customer commitments highlight confidence in NVIDIA’s AI ecosystem and provide a clear path for revenue growth.Short-Term Stock Pressure, Long-Term Opportunity for NVDADespite the groundbreaking announcements, NVIDIA shares dipped 3.3% during the GTC event on Tuesday and have been down 14% year to date. Concerns over a potential recession, U.S.-China trade tensions and the DeepSeek disruption have weighed on the stock. In January 2025, NVIDIA lost $600 billion in market cap after DeepSeek claimed it had developed a competitive AI model with significantly fewer resources, raising fears of diminished infrastructure spending.NVIDIA Stock Price Performance YTDImage Source: Zacks Investment ResearchHowever, NVIDIA’s strong customer commitments and unwavering innovation cycle dispel these fears. The company’s pipeline of next-gen AI chips, combined with strategic partnerships and growing infrastructure demand, makes the stock a long-term winner.NVIDIA’s dominance in the AI and semiconductor markets has been driving its financial performance. In the last reported financial results for the fourth quarter of fiscal 2025, its revenues and non-GAAP EPS surged 78% and 71%, respectively, on a year-over-year basis.NVIDIA’s outlook for the first quarter of fiscal 2026 remains upbeat. The company projects first-quarter revenues of $43 billion, reflecting continued momentum in AI-driven demand. The Zacks Consensus Estimate for first-quarter revenues is pegged at $43.23 billion, indicating 66% year-over-year growth. The consensus mark for non-GAAP earnings stands at 92 cents per share, calling for a 50.8% increase from the year-ago quarter.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.NVIDIA has a strong history of beating earnings estimates. It surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 7.9%.NVIDIA Corporation Stock Price, Consensus and EPS Surprise NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation QuoteNVIDIA’s Discounted Valuation: A Buying OpportunityThe YTD decline in the share price has provided a buying opportunity for investors as NVDA now trades at an attractive valuation multiple. The stock trades at a trailing 12-month price-to-earnings (P/E) ratio of 25.51, below the Zacks Semiconductor – General industry average of 28.42. This suggests the stock is trading at a relative discount, offering potential upside for investors.NVDA Forward 12-Month P/E RatioImage Source: Zacks Investment ResearchConclusion: Buy NVIDIA for Long-Term AI DominanceNVIDIA’s GTC 2025 announcements reaffirm its AI market dominance. The introduction of Blackwell Ultra, Vera Rubin and personal supercomputers, coupled with key partnerships in the robotics, telecom and automotive sectors, solidifies its position as the undisputed leader in AI infrastructure.While the stock may face short-term volatility, its long-term growth trajectory remains robust. With hyperscalers continuing to invest heavily in AI infrastructure and NVIDIA’s consistent innovation, the stock is poised for substantial future gains. For investors seeking exposure to the AI revolution, NVIDIA remains a compelling investment option.Currently, NVDA carries a Zacks Rank #2 (Buy). 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(CSCO): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks