Nvidia (NASDAQ:NVDA) has been among the most closely-watched Magnificent 7 stocks on the market. The AI chip maker posted strong Q2 fiscal 2025 results, with the company’s top-line surging 122% to a record $30 billion for the quarter, driven by strong data center demand. Additionally, the company’s earnings increased 12% sequentially, and surged 168% on a year-over-year basis. One might have thought that such earnings, which below out analyst expectations, would have led to some material increase in value for the stock. That wasn’t the case.

In the case of Nvidia, a company which beats and raises each and every quarter, it’s the size of the beat that matters. In this case, the market appears to be less enthused by some other factors, such as softening in margins and projected delays with the company’s rollout of its new Blackwell chips.

That said, there are no shortage of bulls who consider this stock a long-term buy, for a whole host of reasons. The company’s comprehensive platform spanning hardware, software and services has solidified Nvidia’s dominant market position in the world of AI chips. In fact, among its competitors, Nvidia holds roughly 80% share in this high-margin, high-growth segment of the semiconductor market.

Let’s dive into the bull case behind why this Magnificent 7 stock could have much more room to run from here.

Key Points About This Article:

• Nvidia has continued to dominate mind share for most investors bullish on the future of artificial intelligence, and the growth this sector has to provide.
• With around 80% market share in high-performance computing chips, Nvidia’s strong demand could provide fundamentals few investors can ignore in the coming quarters.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Concerns Are Real, But Should Investors Worry?

Nvidia saw its stock drop more than 5% in the week following what can only be described as a blowout earnings report. The company raised its Q3 guidance, issued another $50 billion stock buyback, and continues to see strong demand-driven fundamentals. However, underneath the surface, some investors are clearly taking the view that this growth isn’t good enough. 

Now, given the law of large numbers, the greater a company like Nvidia’s revenue and earnings are, the harder it is to continue to grow earnings at breakneck speed. That makes sense – once a market is almost fully dominated, outside of perpetually increasing demand, at some point the market will likely price in most of a company’s future earnings potential. That’s what it’s supposed to do, and it’s unclear how much unclaimed demand Nvidia investors aren’t factoring in.

And on a forward demand basis, some concerns around the company’s shift to Blackwell chip production are starting to take hold. The company did confirm in its earnings report that this particular chip is now being sampled by customers, with “several billion dollars” in revenue expected in Q4. However, there’s no real clarity on what this number will be, and how robust 2025 sales will be. While guidance was raised in the expectation that these chips are a hit, and growth in data centers remains strong driven by AI inferencing, there are certainly growth-related risks investors are pricing in. 

Analysts have been quick to raise their price targets on NVDA stock, despite Blackwell chip delays, noting strong growth for Q4 is more likely than not. However, it’s clear investors aren’t necessarily piling onto this side of the boat just yet.

Growth Drivers Are Clear

So, that’s the bear case. Growth may finally be peaking, margins flattening, and new innovative chips may take a bit longer to reach market than previously thought.

But for bulls on Nvidia, the growth drivers are clear. The company’s highly-anticipated Blackwell next-generation GPU chip is set to generate billions in revenue by Q4 fiscal 2025. And so long as major customers like Microsoft and Amazon pile into the AI thesis long-term, this is a new revenue and earnings driver that could provide the kind of growth so many investors are after. 

I think the important thing to point out is that this Blackwell chip represents Nvidia’s dedication to pursuing innovation. The company’s management team remains confident in its ability to continue to iterate toward even more powerful chips over time, taking even more market share in a very lucrative segment.

And while some have issue with Nvidia’s ongoing buybacks ($50 billion should help investors to a certain degree, but many question whether this capital may be better-used fueling the company’s core growth engine), it’s also true that Nvidia appears to be spitting off so much cash, it is having difficulty deploying it all. Overall, that should be a positive net signal to the market.

With additional investments in the AI space taking hold, with Apple and Nvidia reportedly considering investing in OpenAI’s next funding round, there are plenty of growth catalysts on this front for investors to continue to focus on.

Nvidia Still Looks Like a Buy

Nvidia’s upcoming Blackwell chips offer up to 4x faster training and 30x faster inference than the company’s H100 chips and could usher in a truly new era of computing power. For companies looking to develop the latest and greatest AI applications, these chips are a big deal. And while the market has clearly priced in a significant amount of enthusiasm into NVDA stock on this catalyst alone, I think it’s one investors should continue to focus on.

In the coming quarters, I think investors will want to see meaningful top and bottom line impacts from its Blackwell rollout. If things can move forward faster than expected, and earnings do hit the $5 per share level some analysts believe, this is a stock that could have material upside from here (even factoring in some valuation multiple contraction). Accordingly, this is a Magnificent 7 stock I think investors may want to consider on this recent dip.

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