Nvidia (NASDAQ:NVDA | NVDA Price Prediction) stock hasn’t looked this good, at least from a technical standpoint, in a number of quarters. Undoubtedly, whether or not the latest surge above the $200 ceiling of resistance will result in the next big leg higher remains the $5 trillion question. With Jensen Huang continuing to strike deals across the stack or the “five-layer cake” that makes up AI, questions linger as to just how much more AI gains the firm will reap well beyond chips.
Nvidia has more than AI chips going for it as the AI boom matures
If you listened to Jensen Huang on the Dwarkesh Podcast, you’ll know just how passionate the man is about Nvidia’s role in helping the U.S. control all five layers of the cake, from chips all the way up to applications, which he described as the “most important.” After all, the application layer is where the big monetization is going to happen beyond just the picks and shovels. It’s arguably the gold that warrants paying a big premium for all the equipment needed to unearth it.
Indeed, Nvidia might still trade like an AI chip titan with a wide moat, but as the firm expands its reach across more layers (arguably, it’s more of a play on AI Factories), especially the application layer, which is where the real test of whether capital expenditures are worth it will lie.
Whether we’re talking about the Vera Rubin boom, Omniverse, and Drive Thor, or offerings at other layers of the cake, it’s clear that Nvidia might have something more than chips to look forward to as the AI wave begins to shock and awe at the application layer.
Will the stock finally reflect Nvidia’s dominance across AI layers?
It’s been a rough start to the year, but Nvidia, as well as the rest of tech, is finally starting to show signs of making up for lost time. Just when it seemed like shares of Nvidia were going to melt down in the face of another black swan in the market (the Iran war), Nvidia went on to climb more than 22%.
While this latest April surge might be nothing more than another “false breakout,” I do think that the catalysts ahead (the Vera Rubin platform is poised to change the world again) might be enough to justify a sustained run to new heights.
With various sell-side analysts recently increasing their price targets (some are looking for shares to break $300 per share), with many citing Vera Rubin and its ridiculous 10x efficiency gains, I think there’s a pretty good chance that Nvidia stock’s digestion phase is nearing its latter innings and that the path of least resistance might be, once again, higher. Of course, Nvidia stock will need the rest of the market to shrug off the Middle East shock, as well as any inflation to come from the spike in oil. A bit of enthusiasm in the AI and software trade would also help.
The Vera Rubin rocket engine
In any case, Wedbush Securities’ Dan Ives thinks Vera Rubin is a “rocket engine” for AI. And, in many ways, he’s right. While we could see the Vera Rubin ramp coming from a mile away, it’ll soon become a reality.
And as we gain more clarity into the monetization part of the AI trade, while space-based AI data centers (Nvidia has a platform for that, too!), the Omniverse, AI drug discovery, and quantum computing (think NVQLink) all begin to pick up, I think there are just too many drivers in play to think Nvidia will stay grounded at below $200 per share for longer. In essence, Nvidia is getting involved in helping bake the entire AI cake.
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