NVIDIA's stock price rose by 11% as Blackwell chips sold well, helping it approach historical highs

According to Zhitong Finance APP, NVIDIA (NVDA.US) stock price has significantly rebounded this month, rising by 11%, approaching the closing historical high in June, becoming the second best-performing stock in the S&P 500 index. This growth is mainly attributed to the company successfully alleviating investors' concerns about product delays and long-term growth prospects. CEO Jensen Huang announced that the Blackwell chip has been fully put into production, with strong market demand. Morgan Stanley's report also supported this optimistic outlook, stating that orders are booked 12 months ahead, and the business and prospects remain strong.

Therefore, NVIDIA's position as the preferred stock for AI investors has been further consolidated, especially against the backdrop of large companies like Microsoft (MSFT.US) increasing their investments in artificial intelligence. It is understood that Microsoft is expected to increase capital expenditures by nearly one-third in the 2025 fiscal year, reaching around $58 billion.

Zehrid Osmani from Martin Currie Investment Management stated that concerns about production delays have been alleviated. In addition, the sales of TSMC (TSM.US) and the high valuation financing of OpenAI also reflect the strong market demand for artificial intelligence.

John Belton, portfolio manager at Gabelli Funds, believes that the use cases of inference-based artificial intelligence have reignited market interest, which could bring NVIDIA significant new product categories. Belton views NVIDIA as a core holding and believes that artificial intelligence will bring "steady demand" over the years. "This is not an undiscovered stock, but if it can achieve the expected numbers, the valuation is still reasonable."

Data shows that analysts expect NVIDIA's revenue to more than double in the current fiscal year and increase by another 44% in the next fiscal year. Wall Street continues to raise its earnings and profit expectations for NVIDIA. It is evident that NVIDIA's growth prospects are very strong, providing support for its stable valuation and enhancing investors' confidence to continue buying. Although the company's P/E ratio is around 37 times, higher than the Nasdaq 100 index, it is at a lower level compared to the five-year average and the peak of over 44 times in June.

Osmani, portfolio manager at Martin Currie Investment Management, said, "NVIDIA still appears very strong, it is in a very favorable position to seize opportunities in the field of artificial intelligence."

There are also positive signs in the options market. In Thursday's trading, there was a wave of buying frenzy, with over 30 million shares bought at prices ranging from $150 to $189 per share, with these options expiring in March. NVIDIA's stock closed at $134.80 in Friday's trading In addition, the cost of call options relative to put options (known as skew) has decreased, making it more affordable for investors to bet on further stock price increases. These options contracts will expire after NVIDIA is expected to release its fourth-quarter financial report at the end of February.

Dan Flax, Managing Director and Senior Research Analyst at Neuberger Berman, said, "NVIDIA's stock price may continue to fluctuate, and order conditions may also be unstable. However, if the company can successfully execute its product roadmap, this will drive healthy growth and maintain the attractiveness of the stock."