I keep buying NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) because it turns the world's largest capital spending cycle into cash faster than I can decide where to redeploy the dividend.
Nvidia Corporation is rated Buy, with skepticism and competitive risks already fully priced into its compressed 23x forward P/E multiple. NVDA's business doubled year-over-year, with Q1 2026 revenue at $81B and net profit at $58.3B, while shares have traded flat for six months. Gross margin stability above 70% in the upcoming report will signal continued pricing power and absence of destructive price wars.
The semiconductor sector has spent the past two years proving that artificial intelligence can overcome almost any market headwind.
After enjoying a stock market recovery through most of July, Nvidia (NASDAQ: NVDA) took a nosedive late in the month, effectively leaving investors who took the June decline as a buying opportunity flat.
In March, the DOJ announced it had charged three people, including Super Micro co-founder Yih-Shyan “Wally” Liaw, with one count of violating U.S. export control law, one count of conspiring to smuggle goods from the U.S. and one count of conspiring to defraud the U.S. The Justice Department alleged that the trio had conspired to illegally divert advanced servers assembled in the U.S. with sophisticated American AI chips to China. Liaw, who is a U.S. citizen, was one of the two people arrested.
The chipmaking giant is in talks with OpenAI to provide a $250 billion financial backstop for the project, which would be among the largest of the A.I. boom.
South Korean chip stocks slumped on Tuesday, with Samsung Electronics and SK Hynix falling as much as 9.5% and 10.9%, respectively, as investors dumped AI-related bets amid mounting concerns over financing risks tied to AI infrastructure spending and intensifying competition from China.
In the closing of the recent trading day, Nvidia (NVDA) stood at $196.51, denoting a -4.99% move from the preceding trading day.
Nvidia's backing of the data center project – which could cost $500 billion – would allow the SoftBank-owned developer to raise debt at more favorable terms than it could if OpenAI had no financial backer.
Investors are fretting over a report that Nvidia could backstop an OpenAI data-center lease, in what would be the largest such arrangement yet.
Western Digital is riding AI storage demand with rising revenues, expanding margins and bullish analyst targets. See why WDC could extend its rally.
Bloomberg's Ed Ludlow speaks with Nvidia CEO Jensen Huang amid renewed concerns about the AI industry's circular financing deals. Plus, Apple aims to take on Meta in the smart glasses department.