AI Stocks: Speculation vs. Solid Performance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy NVDA?
Source: NASDAQ.COM
- Investor Confidence Survey: Research from Motley Fool indicates that 41% of investors believe the rise in AI stocks is primarily speculative, reflecting market concerns about a potential AI bubble, which may lead to more cautious investment decisions in the future.
- Strong Financial Performance: Companies like Nvidia, Taiwan Semiconductor, and Broadcom continue to see rising sales and earnings in the AI hardware sector, with Nvidia holding an 86% market share in AI data center processors, showcasing their dominant position and potential for future growth.
- Major Partnership Agreements: Broadcom has signed a long-term agreement with Google to design Tensor Processing Units (TPUs) for AI data centers, with projected revenue from Anthropic potentially reaching $63 billion over the next two years, highlighting Broadcom's critical role in AI infrastructure.
- Signals of Continued Investment: TSMC plans to invest $165 billion in new facilities, with Apple securing over half of TSMC's 2-nanometer processor capacity, indicating strong demand for advanced processors and further solidifying its leadership in the global semiconductor market.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 196.510
Low
200.00
Averages
264.97
High
352.00
Current: 196.510
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Insatiable GPU Demand: Nvidia's graphics processing units (GPUs) are in high demand, having expanded from gaming to applications in engineering simulations, drug discovery, and cryptocurrency mining, with AI being the largest use case yet to reach peak demand.
- Strong Capital Expenditure Outlook: Nvidia anticipates global data center capital expenditures could rise to $3 trillion to $4 trillion by 2030, representing significant growth potential, positioning Nvidia as a primary beneficiary in this expanding market.
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- Nvidia's Market Leadership: Nvidia holds an impressive 86% share of the data center market for AI processors, with a non-GAAP earnings per share of $4.77 for fiscal 2026, reflecting a 60% year-over-year increase, showcasing strong profitability and market dominance expected to continue.
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- Insatiable GPU Demand: Nvidia's graphics processing units (GPUs) are in high demand, having expanded from gaming to applications in engineering simulations, drug discovery, and cryptocurrency mining, with AI being the largest use case yet to reach peak demand.
- Strong Capital Expenditure Outlook: Nvidia anticipates global data center capital expenditures could rise to $3 trillion to $4 trillion by 2030, representing significant growth potential, positioning Nvidia as a primary beneficiary in this expanding market.
- Impressive Financial Performance: Nvidia achieved a remarkable 73% growth in the last quarter, with revenue projections of 79% and 85% growth for the next two quarters, and despite a seemingly high P/E ratio, the stock is viewed as a bargain considering its future growth potential.
See More
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- Acquisition Risk Alert: Senator Warren expressed concerns in a letter to the Defense and Energy Secretaries that Nvidia's acquisition of SchedMD could pose national security risks, particularly due to the Department of Energy and Department of Defense's reliance on SchedMD's workload management software, Slurm.
- Software Dependency Issues: Slurm is recognized as the top software used globally in aerospace and defense, and Nvidia's acquisition transforms this once open-source software into a proprietary product, potentially reducing competition and impacting the operation of government supercomputers.
- Government Dependency Inquiry: Senator Warren requested information on which DOE and DOD systems rely on Nvidia's software or hardware, with a deadline for responses set for May 5, highlighting concerns over the extent of government dependency on Nvidia.
- Nvidia's Response: An Nvidia spokesperson stated that Slurm will continue to be developed and distributed as open-source software, emphasizing their commitment to openness and ongoing enhancements for customers, despite the acquisition raising competition concerns.
See More
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- Significant Revenue Growth: SoundHound AI's full-year revenue reached approximately $168.9 million in 2025, nearly doubling year-over-year, indicating strong growth potential in the voice AI sector that attracts long-term investor interest.
- New Platform Launch: At CES 2026, SoundHound AI unveiled its Amelia 7 agentic AI platform, capable of completing tasks such as ordering food and making reservations, marking the company's expansion from automotive to smart devices and home automation, enhancing its market competitiveness.
- Enterprise Sales Expansion: At the Mobile World Congress in February 2026, the company launched its Sales Assist Agent, further applying its voice technology to enterprise sales workflows, opening new market opportunities and increasing customer stickiness.
- Future Revenue Guidance: SoundHound AI is guiding for 2026 revenue between $225 million and $260 million; although it is not yet profitable, the stickiness of its platform and long-term growth potential make it a noteworthy investment consideration.
See More
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- Market Uncertainty: The current market faces threats from geopolitical instability, a tough job market, and rising inflation, leading to cautious investor sentiment, particularly among young investors who need to balance growth stocks with steadier investments.
- Nvidia's Market Leadership: Nvidia holds an impressive 86% share of the data center market for AI processors, with a non-GAAP earnings per share of $4.77 for fiscal 2026, reflecting a 60% year-over-year increase, showcasing strong profitability and market dominance expected to continue.
- Stability of Vanguard S&P 500 ETF: The Vanguard S&P 500 ETF has an average annual return of about 10% since 1957, which, while not guaranteed, serves as a solid strategy for diversifying investments and helping investors maintain stability during market fluctuations to avoid significant losses from individual stock volatility.
- Importance of Long-Term Investing: Over the past two decades, seven of the market's ten best days occurred within two weeks of its ten worst days, underscoring the importance of staying invested to capture gains when the market rebounds.
See More
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- ResMed Upgrade: JPMorgan upgrades ResMed to overweight, highlighting its position as a global leader in the obstructive sleep apnea market, primarily generating revenue from CPAP devices and masks, along with a portfolio of respiratory health solutions, indicating strong market competitiveness.
- Nvidia Reiteration: Evercore ISI reiterates Nvidia as outperform, noting that despite recent underperformance, its potential in AI demand and compute cycles remains robust, underscoring its significance and investment value in future markets.
- Okta Upgrade: Raymond James upgrades Okta to outperform, suggesting that the shift of AI into enterprise applications will significantly enhance Okta's market opportunities, particularly in identity security, indicating potential market expansion.
- PayPal Downgrade: Mizuho downgrades PayPal to neutral, citing competitive and fundamental pressures, reflecting market concerns about its future growth, which may impact investor confidence.
See More
TSMC Reports Strong AI Demand Driving Financial Performance
- Robust AI Demand: TSMC CEO C.C. Wei highlighted during the analyst call that AI-related demand remains extremely strong, driving the need for advanced silicon and indicating that the company will benefit from this trend in the coming years.
- Impressive Financial Performance: The company reported a record net profit of NT$572.5 billion (approximately $18.15 billion) for Q1, reflecting a 58.3% year-over-year increase, with revenue surging 35% to $35.9 billion, showcasing insatiable global demand for AI infrastructure.
- Significant Margin Expansion: Despite rising memory chip prices, TSMC's gross profit margin expanded to 66.2%, significantly exceeding company guidance, demonstrating strong pricing power and cost control in the market.
- Capital Expenditure Plans: Wei indicated that TSMC is leaning towards the high end of its $56 billion capital expenditure budget to support customers' AI infrastructure buildouts, further solidifying its market leadership.
See More
