Why Pat Gelsinger is Bullish on Nvidia Stock

Nvidia stock

Pat Gelsinger, the former CEO of Intel (NASDAQ:INTC), is no stranger to the competitive world of tech. Recently, he made waves by investing in Nvidia (NASDAQ:NVDA), a company dominating the AI chip industry. Gelsinger’s interest in Nvidia comes amid a period of market volatility, fueled by emerging competition like DeepSeek. Despite concerns over these new players, Gelsinger remains confident in Nvidia’s long-term prospects. In this article, we explore why Nvidia stock is still a strong buy and why Pat Gelsinger is putting his money behind the company.

Nvidia’s Dominance in AI Chips

Nvidia (NASDAQ:NVDA) is widely regarded as a leader in specialized AI chips, thanks to its focus on graphics processing units (GPUs) and system-on-a-chip (SoC) units. The company’s products are critical for the gaming, professional markets, and mobile computing, and it has cemented itself as one of the largest companies in the world with a market capitalization of $2.94 trillion.

Despite a 12.9% drop in Nvidia stock year-to-date, the company has proven its resilience over the past 52 weeks, with an impressive 77% increase. Pat Gelsinger’s decision to buy Nvidia stock signals confidence in its growth trajectory and strong market fundamentals, even in the face of competition from new, lower-cost AI models from startups like DeepSeek.

Nvidia’s Solid Fundamentals

Nvidia has experienced tremendous growth over the past decade. With a compound annual growth rate (CAGR) of 37.84% in revenue and 59.72% in earnings, the company has delivered exceptional results for its shareholders. In the third quarter of its fiscal 2025, Nvidia reported revenue of $35.1 billion, exceeding estimates by a significant margin. Earnings per share reached $0.81, surpassing forecasts of $0.75.

The company’s cash flow is equally strong, with net cash from operations doubling year-over-year to $17.6 billion. Nvidia’s $38.5 billion in cash, coupled with no short-term debt, demonstrates its financial stability and ability to navigate uncertain market conditions. With projected revenue growth of 93.84% and earnings growth of 190.05%, Nvidia is poised to outperform the broader tech sector, where the average growth rates are much lower.

Key Growth Drivers for Nvidia

One of Nvidia’s biggest advantages lies in its innovative hardware offerings. The company recently launched the next generation of its GeForce RTX GPUs, powered by the Blackwell architecture, marking a significant advancement in computer graphics. CEO Jensen Huang has described this development as one of the most important breakthroughs in the field in 25 years.

Furthermore, Nvidia’s H100 Tensor Core GPU is regarded as the world’s most powerful AI accelerator, with Nvidia holding a commanding 90% market share in AI accelerators. As the demand for generative AI and high-performance computing accelerates, Nvidia is well-positioned to capture a significant share of the $300 billion hyperscaler data center market.

Nvidia’s software ecosystem is another key driver of its continued growth. Platforms like CUDA, Nvidia AI, and Omniverse enable seamless AI scalability, while Inference Microservices reduce AI deployment times drastically, improving efficiency for enterprises. These software offerings are crucial for maintaining Nvidia’s leadership position in the AI space.

Nvidia Faces Competition but Stays Ahead

While emerging competitors like DeepSeek are attempting to challenge Nvidia’s dominance, they have yet to make a meaningful impact on the company’s market position. Nvidia’s stronghold in the AI chip market remains secure, driven by its industry-leading hardware, software, and customer relationships. Even as competition increases, Nvidia continues to benefit from massive capital investments from businesses seeking the most advanced AI solutions.

Analyst Opinion on Nvidia Stock

Nvidia stock remains highly regarded by analysts. The consensus rating for NVDA is a “Strong Buy,” with a target price of $178.09, representing an upside potential of about 52%. Out of 43 analysts covering Nvidia, 37 have rated it as a “Strong Buy,” 2 as a “Moderate Buy,” and 4 as a “Hold.” This reflects widespread confidence in Nvidia’s future prospects, backed by its leading position in the AI chip market.

Conclusion: Is Nvidia Stock a Good Buy?

Pat Gelsinger’s decision to buy Nvidia stock speaks volumes about the company’s future growth potential. Despite the current market volatility and emerging competition, Nvidia’s solid fundamentals, innovative products, and dominant position in the AI chip market make it a strong long-term investment. If you’re looking to invest in the AI space, Nvidia remains one of the best options on the market.

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About the author: Stephanie Bédard-Châteauneuf has over seven years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, market news, and personal finance. She has an MBA in finance.