The celebration of NVIDIA is far from over.

Author: Chai Xuchen

Editor: Zhou Zhiyu

Within a week, those who were "speculating" on NVIDIA truly experienced a rollercoaster ride.

On March 8th, Eastern Time, NVIDIA staged a shocking turnaround, with its stock price soaring by 5.1%, only to plummet by 5.6%, experiencing a fluctuation of over 10% during the day. The festive mood came to an abrupt halt as NVIDIA's market value shrank by $128.5 billion (approximately 923.4 billion RMB) on that day. On March 11th, it continued to decline by 2%, but rose by 1.88% after hours.

Clearly, the market has shown a significant divergence in its outlook for NVIDIA's future.

On March 7th, "Sister Wood" (Ark Investment CEO Cathie Wood) sounded the alarm for NVIDIA, warning that its astonishing growth may slow down. She compared NVIDIA to Cisco during the Internet bubble era in 2000, stating that NVIDIA's "Cisco moment" has arrived.

At the peak of the Internet bubble in 2000, Cisco's stock price surged by 71 times, but as the tech bubble burst, Cisco's market value evaporated by 90% a year later, never returning to its peak.

Now, riding the rocket of artificial intelligence, NVIDIA achieved a rapid market value leap from one trillion to two trillion dollars in just 8 months. At the end of February this year, after announcing better-than-expected performance, its stock price once again "skyrocketed," coming just a step away from surpassing Apple as the second-largest market cap in the U.S.

Sister Wood holds a pessimistic view on NVIDIA's next steps, believing that NVIDIA is currently facing increasingly fierce competitive pressures.

Not only is rival AMD increasing its investment in AI-related chips, but Intel is also stepping up its efforts. More importantly, NVIDIA's major clients such as Microsoft, Amazon, Google, and OpenAI are actively developing their own chips to prepare for a "breakaway," as they do not want to be held back by NVIDIA in the AI era.

Market sentiment is extremely polarized, with greed and fear both growing wildly. Under the catalyst of options trading, NVIDIA's stock price experienced severe tremors on March 8th.

According to analysis from institutional investors on Wall Street Horizon, NVIDIA's volatility was already very high, leading to high prices for both call and put options. Last Friday was the U.S. stock options expiration day, and many investors exercised call options on NVIDIA, prompting options traders to sell their NVIDIA shares to unwind their hedges.

The surge in options trading volume magnified the fluctuations in NVIDIA's stock price. According to data from the quantitative trading terminal StockWe, at 10:48 am on March 8th, local time, NVIDIA saw four consecutive huge options trades of $3-4 billion each within one second, totaling up to $16 billion. However, Morgan Stanley remains optimistic that NVIDIA can continue to rise. From the perspective of valuation and the long term, it is believed that NVIDIA is not close to its market peak, refuting the "Cisco moment" theory.

J.P. Morgan also pointed out in its research report that the current AI infrastructure investment frenzy is only in its early stages, far from reaching the level of the internet bubble over 20 years ago. GPU investment is just beginning, and the investment growth in the supply chain will have a multiplier effect.

Wall Street investment firm Wedbush stated that the recent large-scale sell-off of NVIDIA does not indicate the arrival of an AI bubble. Instead, it reflects the underestimation of AI potential by some Wall Street fund managers and the concentrated reflection of investors' profit-taking operations.

Therefore, the market still holds high expectations for NVIDIA.

Currently, NVIDIA remains the computing power base of the AI era. CEO Jensen Huang believes that the upgrade of industry hardware, including strong AI applications like Sora, is still in its early stages. He predicts that the industry will need about $2 trillion worth of NVIDIA chips to meet future computing needs. NVIDIA has also provided a Q1 revenue guidance of $24 billion, significantly higher than the market's expectation of $21.9 billion.

Wedbush predicts that this year, the proportion of technology companies' spending in the AI field will increase from less than 1% last year to 8-10%, in order to accelerate the improvement of the hardware infrastructure needed for AI applications and build a strong defense. Market research firm Gartner expects the AI chip market to grow by over 25% to $67.1 billion this year, reaching nearly $120 billion by 2027.

This means that under huge market demand, "Huang's leadership" still has the opportunity to consolidate its position.

Facing challengers, NVIDIA is not sitting idly by. The CUDA computing platform and mature software and hardware ecosystem are its solid technical moat. At the same time, "Huang's leadership" has not slowed down in product research and development.

NVIDIA has announced that at the upcoming GTC conference in March, it will release breakthroughs in accelerated computing, generative AI, and robotics. The market expects its next-generation GPU chip, the B100, to be unveiled simultaneously. At that time, the AI market will undoubtedly be ignited once again.

For "Huang's leadership," this is a key roadshow to break market disagreements and once again prove the dominant position and strength of AI chip technology. For investors, this will be a window to observe whether NVIDIA can continue to rise significantly.

The myth of NVIDIA's high growth seems to continue, perhaps the surrounding competitors will further stimulate "Huang's leadership" fighting spirit, accelerating NVIDIA's pace of iteration. Where will it lead tech companies and the entire AI industry in a new era? Perhaps there will be an answer within the next year or two.