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AI infrastructure demand will soon scale from billions to trillions.
The next phase of growth will reach far beyond chatbots.
Nvidia enjoys explosive earnings growth combined with a reasonable valuation.
Nvidia Company Overview
Zacks Rank #1 (Strong Buy) stock Nvidia ((NVDA - Free Report) ) is the world’s most important artificial intelligence company. Before the recent artificial intelligence revolution took hold with the launch of OpenAI’s ChatGPT, Nvidia was a pioneer in PC graphics for video games. However, in the early 2000s, Nvidia’s GeForce Series graphic cards unexpectedly unlocked their graphic process units (GPUs) for scientific computing, setting the stage for the AI revolution. Today, and with several iterations under its belt, Nvidia has become essential to the AI revolution. Its powerful GPUs are lightyears ahead of the competition and are the foundation of the tech stack needed to train AI and large language models (LLMs).
AI: The Largest Infrastructure Buildout in History
Last week, Jensen Huang, Nvidia’s iconic CEO, delivered some noteworthy comments at the World Economic Forum (WEF) 2026 in Davos, Switzerland. First, Huang outright dismissed bubble fears, citing rising spot prices (even for older GPUs) and the extreme difficulty of renting them. Meanwhile, although “hyperscalers” like Amazon ((AMZN - Free Report) ),Alphabet ((GOOGL - Free Report) ), and Microsoft ((MSFT - Free Report) ) have already spent hundreds of billions of dollars on AI investments, Huang predicts trillions of dollars are in the pipeline, ready to support the latest and most powerful AI models.
Wall Street analysts appear to be in lockstep with Huang’s predictions. Zacks Consensus Analyst Estimates suggest that NVDA revenue and EPS will each soar by more than 50% in 2026 and continue into 2027.
Image Source: Zacks Investment Research
Nvidia: Blistering Growth at a Reasonable Price
Nvidia shares peaked in October (as of now) and have moved sideways. However, the company’s fundamentals have only become stronger. The result? Nvidia’s valuation metrics, such as its price-to-sales ratio, have retreated dramatically, making the stock attractive to a wider swath of Wall Street institutions, including those that focus on valuations. NVDA, which had a P/S of 200x in 2023, now has a P/S of just ~24x.
Image Source: Zacks Investment Research
AI Will Expand to New Verticals in 2026
Large language models and chatbots like OpenAI’s “ChatGPT” and Alphabet’s “Gemini” provided Wall Street investors with proof of concept for the AI revolution. However, chatbots are merely the tip of the iceberg. Jensen Huang referred to physical AI and robotics as a “once-in-a-generation opportunity.” Meanwhile, Tesla ((TSLA - Free Report) ) CEO Elon Musk has repeatedly predicted that the company’s upcoming “Optimus” humanoid robot will be its largest product to date and potentially the best-selling product ever. While Musk and Huang’s bold statements may seem unrealistic, fading their opinions has been perilous. Finally, AI will begin to move into the application layer as complex AI models integrate into and disrupt the legacy software business.
Nvidia Inks Deal to Sell Chips to China
Nvidia has received approval to sell its H20 AI chips in China after signing a deal with the U.S. government. This marks a significant development for the company’s growth prospects. Under the terms of the agreement, the company will pay 15% of total revenues from H20 sales in China to the U.S. government. While this revenue-sharing condition may slightly impact margins, the deal opens a valuable door to one of the largest AI markets globally. The AI boom in China, driven by large tech companies like Baidu (BIDU) and government-backed projects, could create steady demand for H20 chips.
Bottom Line
Nvidia’s transformation from a gaming pioneer to the bedrock of the global AI revolution has solidified its future growth. With demand growing and AI verticals broadening, Nvidia is well-positioned to maintain its AI dominance.
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Bull of the Day: Nvidia (NVDA)
Key Takeaways
Nvidia Company Overview
Zacks Rank #1 (Strong Buy) stock Nvidia ((NVDA - Free Report) ) is the world’s most important artificial intelligence company. Before the recent artificial intelligence revolution took hold with the launch of OpenAI’s ChatGPT, Nvidia was a pioneer in PC graphics for video games. However, in the early 2000s, Nvidia’s GeForce Series graphic cards unexpectedly unlocked their graphic process units (GPUs) for scientific computing, setting the stage for the AI revolution. Today, and with several iterations under its belt, Nvidia has become essential to the AI revolution. Its powerful GPUs are lightyears ahead of the competition and are the foundation of the tech stack needed to train AI and large language models (LLMs).
AI: The Largest Infrastructure Buildout in History
Last week, Jensen Huang, Nvidia’s iconic CEO, delivered some noteworthy comments at the World Economic Forum (WEF) 2026 in Davos, Switzerland. First, Huang outright dismissed bubble fears, citing rising spot prices (even for older GPUs) and the extreme difficulty of renting them. Meanwhile, although “hyperscalers” like Amazon ((AMZN - Free Report) ), Alphabet ((GOOGL - Free Report) ), and Microsoft ((MSFT - Free Report) ) have already spent hundreds of billions of dollars on AI investments, Huang predicts trillions of dollars are in the pipeline, ready to support the latest and most powerful AI models.
Wall Street analysts appear to be in lockstep with Huang’s predictions. Zacks Consensus Analyst Estimates suggest that NVDA revenue and EPS will each soar by more than 50% in 2026 and continue into 2027.
Image Source: Zacks Investment Research
Nvidia: Blistering Growth at a Reasonable Price
Nvidia shares peaked in October (as of now) and have moved sideways. However, the company’s fundamentals have only become stronger. The result? Nvidia’s valuation metrics, such as its price-to-sales ratio, have retreated dramatically, making the stock attractive to a wider swath of Wall Street institutions, including those that focus on valuations. NVDA, which had a P/S of 200x in 2023, now has a P/S of just ~24x.
Image Source: Zacks Investment Research
AI Will Expand to New Verticals in 2026
Large language models and chatbots like OpenAI’s “ChatGPT” and Alphabet’s “Gemini” provided Wall Street investors with proof of concept for the AI revolution. However, chatbots are merely the tip of the iceberg. Jensen Huang referred to physical AI and robotics as a “once-in-a-generation opportunity.” Meanwhile, Tesla ((TSLA - Free Report) ) CEO Elon Musk has repeatedly predicted that the company’s upcoming “Optimus” humanoid robot will be its largest product to date and potentially the best-selling product ever. While Musk and Huang’s bold statements may seem unrealistic, fading their opinions has been perilous. Finally, AI will begin to move into the application layer as complex AI models integrate into and disrupt the legacy software business.
Nvidia Inks Deal to Sell Chips to China
Nvidia has received approval to sell its H20 AI chips in China after signing a deal with the U.S. government. This marks a significant development for the company’s growth prospects. Under the terms of the agreement, the company will pay 15% of total revenues from H20 sales in China to the U.S. government. While this revenue-sharing condition may slightly impact margins, the deal opens a valuable door to one of the largest AI markets globally. The AI boom in China, driven by large tech companies like Baidu (BIDU) and government-backed projects, could create steady demand for H20 chips.
Bottom Line
Nvidia’s transformation from a gaming pioneer to the bedrock of the global AI revolution has solidified its future growth. With demand growing and AI verticals broadening, Nvidia is well-positioned to maintain its AI dominance.