Nvidia Stock: Short Breather or Long-Term Potential?

Nvidia has achieved impressive stock gains in recent years, particularly thanks to its leading position in artificial intelligence (AI). The company holds over 80 percent of the market share in AI chips. However, the stock recently lost momentum and has fallen by more than six percent over the past month. Some investors are concerned about increasing competition in the chip market and fear that a potential decline in AI spending could harm the company. Despite these concerns, I believe that Nvidia still has enough potential to continue rising in the short and long term. A defining development in the fourth quarter could particularly help the stock soar. A look at Nvidia's development history underscores its significant future potential. A few years ago, the gaming segment was Nvidia's largest revenue source. The company's graphics units, capable of handling multiple tasks simultaneously, were predestined for this. It soon became apparent that this technology was also ideal for the AI sector. By focusing on this growth market, Nvidia's revenues exploded. Today, the datacenter business, which caters to AI customers, accounts for a substantial 87 percent of quarterly revenues. The demand and market forecasts, which predict AI market growth from $200 billion today to over $1 trillion by 2030, suggest that this trend will continue. Despite the competition, Nvidia remains ahead through continuous innovations. The annual update of the GPU product line ensures its leading position. Regarding AI spending, my colleague Trevor Jennewine expects it to gain further momentum in the coming years, which should benefit Nvidia. Now to my forecast: Although Nvidia's stock has weakened recently, it has already gained 144 percent this year and an impressive 2700 percent over the last five years. I am convinced that this is just a pause and that the introduction of the new Blackwell architecture in the fourth quarter will give the stock a new boost. Nvidia plans to ramp up Blackwell production and expects billions in revenue from this segment in the fourth quarter. Nvidia will not release its fourth-quarter financial results until early next year, but earlier announcements from the company about the Blackwell launch could move the market sooner. Investors are also known for their reaction to such news. Nvidia CEO Jensen Huang has emphasized that the demand for Blackwell exceeds supply and expects this to remain the case next year. The high demand clearly shows that customers are eager to get their hands on the new Nvidia chips. All these factors make me optimistic about Nvidia's long-term revenue potential in the AI market and the stock's potential to continue rising in the long term. This means that Nvidia remains an excellent investment, even if my short-term forecast does not come true. In conclusion, something to consider: the analyst team at Motley Fool Stock Advisor recently identified the ten best stocks for investors, and Nvidia was not among them. These ten stocks could yield enormous returns in the coming years. Before buying Nvidia shares, it is advisable to consider this information.