Some commentators might assume that Nvidia (NASDAQ:NVDA) stock is overvalued. In contrast, we propose the company’s best-in-class artificial intelligence compatible processors demonstrate Nvidia’s value. It’s the products — not the perceptions — that define the company, so we’re assigning Nvidia stock a highly confident “A” grade today.
The demand for Nvidia’s AI-ready chips is strong and constant. Even the skeptics can’t deny this. Worry warts always find excuses to panic-sell. It’s unfortunate, but don’t let the doubters affect your perception of Nvidia’s value to shareholders.
Nvidia Stock Pulls Back a Little Bit. Are You Worried?
The critics will pounce on any opportunity to scare people, it seems. Nvidia stock pulled back from $140 not long ago, and the skeptics are suddenly coming out of the woodwork.
We’re seeing stories about finding an “antidote to” Nvidia (as if the company is poisonous) and the “Nvidia spell” being “broken.” One commentator declared that “Nvidia has had a whiplash-inducing few months.”
Certainly not. Nvidia stock went up consistently from mid-April to mid-June. Then it pulled back a little bit. This is normal. It’s not unusual for institutional investors to take profits after a big rally.
Sensible investors should actually be encouraged when they witness the critics come out of hiding. They should be glad to hear the calls for a “tech reckoning.”
They ought to celebrate when they see Interactive Brokers strategist Steve Sosnick’s arguing, “Just because the risks have proved unfounded before doesn’t mean that they have disappeared.”
That’s a pretty good summation of the bears’ argument against Nvidia now. They were wrong about Nvidia’s perceived risks in the past, and they probably lost money, but maybe their perma-pessimism be vindicated at some point.
Conveniently Disregarding Nvidia’s Growth
Let’s get back to reality for a moment. Nvidia enacted a 10-for-1 forward share split, making the company’s stock more affordable. Furthermore, Nvidia increased its dividend distributions by 150%.
Those are positive signs for the company. Most importantly, the demand for Nvidia’s AI-compatible products is intense. In the first quarter of fiscal 2025, Nvidia’s Data Center segment revenue grew by a jaw-dropping 427% year over year.
Given this growth rate, one might reasonably wonder whether Nvidia stock might actually return to its pre-split price of around $1,200. We shouldn’t get ahead of ourselves, as the stock still needs to return to its prior peak of around $140.
Still, very long-term Nvidia investors can have big goals and, in the meantime, reinvest their dividend distributions. Along the way, there will be commentators seeking to plant doubts in your mind.
For instance, Bokeh Capital Partners founder Kim Forrest posited, “[M]aybe some chip designer will come up with an even better way to be useful in the AI ecosystem.”
Sure, that’s possible. We could brainstorm and come up with hypothetical “maybe” scenarios all day long. Does this actually add up to a compelling bearish argument against Nvidia stock, though?
Nvidia Stock: Don’t Fight the Facts
There’s an old saying: Don’t fight the tape. To that, we’d like to suggest another principle: Don’t fight the facts. Nvidia is, in fact, a fast-growing, dividend-paying company with top-quality, in-demand products.
Consequently, Nvidia stock truly is a gift that keeps on giving despite the critics’ constant objections. We’re giving the stock an “A” grade and a confident outlook, as Nvidia’s investors don’t need to be distracted by anxious pessimists and frustration-fraught commentators.
On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
