$NVIDIA(NVDA)$ I may trim $NVIDIA(NVDA)$ and move my capital around. But would definitely buy back it is drops back to around $200 mark.
Even though NVIDIA (NVDA) has been trading sideways recently, the underlying business continues to strengthen. A flat stock price doesn’t necessarily mean the investment thesis has weakened—it can simply reflect that earnings are catching up with valuation.
Here are the main reasons long-term investors continue to hold NVDA.
1. AI spending is still in the early innings
The biggest bullish argument hasn’t changed.
The world’s largest cloud providers—Microsoft, Amazon, Google, Meta, Oracle, and xAI—are collectively planning to spend hundreds of billions of dollars on AI infrastructure over the next few years.
Most of that spending ultimately benefits NVIDIA through:
* GPUs (Blackwell and future Rubin platforms)
* Networking (InfiniBand and Ethernet)
* NVLink systems
* AI software (CUDA, AI Enterprise)
The market is no longer asking whether AI is real—it is asking how much compute will be needed. So far, demand continues to outpace supply.
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2. Blackwell is shipping extremely well
After initial concerns about production delays, Blackwell has become one of the fastest-adopted AI platforms in history.
Customers are ordering complete AI factories rather than individual GPUs.
That means NVIDIA sells:
* GPUs
* Networking
* Storage integration
* AI software
* Maintenance and support
Average revenue per customer keeps increasing.
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3. CUDA remains a massive moat
Many people think NVIDIA is simply a chip company.
It isn’t anymore.
CUDA has become the standard platform for AI development.
Once an organization builds its AI stack around CUDA:
* switching costs become very high,
* engineers are already trained,
* optimized libraries are already written.
That ecosystem is extremely difficult for competitors to replicate.
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4. Gross margins remain exceptional
Despite fierce competition, NVIDIA continues to produce gross margins around 70%+.
Very few hardware companies achieve software-like profitability.
Those margins allow NVIDIA to:
* invest heavily in R&D,
* stay ahead technologically,
* generate enormous free cash flow.
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5. Earnings continue to grow into the valuation
A year ago many investors worried NVIDIA was “too expensive.”
Since then, earnings have grown dramatically.
If EPS continues compounding at 25–35% annually, today’s valuation becomes much easier to justify over several years.
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Why has the stock been flat?
A few reasons:
* Investors are waiting for the next earnings report.
* Expectations are already very high, so “good” results may not immediately move the stock.
* The market is rotating between sectors.
* After a huge rally, the stock may need time for fundamentals to catch up.
This is common for companies that have appreciated rapidly.
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Risks to watch
The main risks are:
* AI infrastructure spending slows.
* Large cloud providers design more custom AI chips.
* Export restrictions tighten further.
* Competition from AMD or custom ASIC providers increases.
* Valuation compresses if interest rates rise or growth expectations soften.
That said, none of these have yet displaced NVIDIA from its leadership position.
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