Nvidia: The Comeback of the Chip Giant?

Nvidia has demonstrated an impressive track record in recent years. Within just five years, the stock price increased by nearly 2,800%. An initial investment of $5,000 would be worth over $140,000 today. However, the question arises: Has the stock become too expensive to remain attractive? Despite the enormous price gains of recent years, there are compelling arguments that Nvidia still holds further growth potential. The company is known for its innovative strength in developing new chips that are crucial for training and developing artificial intelligence (AI). Nvidia's current chips from the Blackwell series, which cost up to $40,000 each, are in high demand, which CEO Jensen Huang described in an interview as "insane demand." In August, Nvidia reported revenue of $30 billion for the quarter ending in July with a growth of 122%. Nevertheless, significant leaps in the stock price were absent, possibly due to high market expectations. However, if the demand situation develops as described by Huang, optimistic company forecasts for future quarters could drive the stock price up. The next earnings announcement is scheduled for November. In the long term, the AI revolution is still in its infancy. Analysts predict the AI chip market to grow to over $323 billion by the end of the decade. Due to its leadership role, Nvidia could strongly benefit from this boom, and even with a price-to-earnings ratio of 34, the stock is considered a relatively cheap growth investment. Even if Nvidia does not achieve four-digit returns over the next five years, the company remains an attractive investment opportunity. As a pioneer in the AI chip segment, Nvidia offers a certain level of stability and is thus one of the safer growth stocks that one can have in their portfolio today.