NVIDIA's closing price hits a record high! Can Blackwell's optimistic expectations help it reclaim the "world's number one" throne?

According to the Zhitong Finance and Economics APP, NVIDIA (NVDA.US) has successfully alleviated investors' concerns about product delays and long-term growth prospects, leading to a rebound in its stock price. NVIDIA closed up 2.4% on Monday, reaching a record high closing price, although still below the historical high of $140.747 reached in June. The stock has risen nearly 14% this month and almost 179% year-to-date, making it the second best-performing stock in the S&P 500 index.

NVIDIA's market value surpassed Microsoft last week to become the second largest, with a market value of about $3.4 trillion at Monday's close, expanding its lead over Microsoft and maintaining the position as the second highest market value company in the US stock market, second only to Apple.

NVIDIA CEO Jensen Huang stated that the company's Blackwell chip "has been fully put into production" and the market demand is "very crazy." Previously, due to engineering issues, the launch of the Blackwell chip was delayed, leading to investors selling off NVIDIA stocks. However, this decline has now been erased.

A report released by Morgan Stanley analysts after meeting with NVIDIA management last week stated that orders for the Blackwell chip "have been booked for about 12 months," and "various signs indicate that the business remains strong with very high visibility for the future."

These comments reinforce the view that NVIDIA remains a popular way for investors to participate in artificial intelligence, especially as large tech companies continue to focus on their AI initiatives. For example, Microsoft (MSFT.US) is expected to increase its capital expenditure by nearly one-third in the 2025 fiscal year to reach $58 billion.

Zehrid Osmani, portfolio manager at Martin Currie Investment Management, said, "There have always been questions about the potential impact of the Blackwell chip production delay, so this latest news is reassuring."

In addition to the optimistic sentiment towards the Blackwell chip, TSMC's performance in September also showed strong demand for artificial intelligence, while OpenAI's valuation reached $157 billion in a new round of financing, with the company recently releasing an AI model with reasoning capabilities. John Belton, portfolio manager at Gabelli Funds, said that these developments "have reignited people's interest in this field, and people are very excited about the use cases of reasoning-based AI." He added, "Reasoning represents a new area for NVIDIA, and considering its computational intensity, this could be a huge new product category."

John Belton sees NVIDIA as a core holding and believes that artificial intelligence will provide "stable demand" in the coming years. He said, "This is not an undiscovered stock, but if it can achieve the expected numbers, the valuation is still reasonable." According to data compiled by the media, Wall Street analysts expect NVIDIA's revenue to more than double this fiscal year and increase by 44% in the next fiscal year. Over the past quarter, analysts have continuously raised their expectations for NVIDIA's performance.

NVIDIA's strong growth prospects have kept its valuation in check, helping bullish investors to continue buying. The stock's price-earnings ratio is over 37 times, higher than the Nasdaq 100 index, but lower than its five-year average and the peak of over 44 times reached in June. Zehrid Osmani said, "NVIDIA still looks formidable." "It remains well-positioned to capitalize on the opportunities in artificial intelligence."

There are also optimistic signs in the options market. Last Thursday saw a surge in buying NVIDIA call options. Additionally, the cost of call options relative to put options has decreased, making the cost of betting on further upside lower. Dan Flax, Managing Director and Senior Research Analyst at Neuberger Berman, said, "The stock price will continue to fluctuate, and order numbers will be volatile." "But as long as NVIDIA executes its product roadmap, it will drive healthy growth and keep its stock attractive."