NVDA Buy Alert: Why Nvidia is the only AI stock that matters

Nvidia’s (NASDAQ:NVDA) shares rose following impressive results in May, when revenue and net income rose 262% and 628% year-over-year, respectively. With strong demand for its AI chips, Nvidia’s move into cloud computing offers further growth prospects that investors are clearly pricing in.

CEO Jensen Huang announced updates to AI accelerators, including the Blackwell Ultra chip in 2025 and the Rubin platform in 2026, to expand beyond the cloud computing giants. Huang stressed the need for cross-industry AI adoption for future competitiveness. Here’s more on why Nvidia looks like a stock every investor simply has to own right now.

Nvidia shares are the second most valuable company in the world

Nvidia reached a market capitalization of $3 trillion on Wednesday, surpassing Apple (NASDAQ:AAPL) as the second most valuable company in the world.

This move comes as investors place great value on Nvidia’s significant contributions to artificial intelligence and its future prospects.

With a share price increase of around 150% this year alone, the NVDA share simply seems unstoppable, because the targets are clearly defined on Microsoft (NASDAQ:MSFT) and the title of the most valuable company in the world.

By capitalizing on growth in AI, gaming, and crypto, Nvidia is innovation-driven and demand for its chips is quite high. The company has a strong presence in both the Nasdaq and the S&P 500.

Nvidia was a driving force that drove US stocks to record highs and accounted for almost a third of the S&P500 in 2024.

If this upswing continues, it is quite possible that Nvidia will soon take the market lead.

New AI chips

Nvidia unveiled its next-generation AI chips, Ruby, just months after announcing the Blackwell model. CEO Jensen Huang unveiled Rubin ahead of the COMPUTEX conference in Taipei. This rapid progress underscores Nvidia’s accelerated AI chip development.

Nvidia has committed to releasing new AI chips every year, moving away from a two-year update cycle. The quick transition from Blackwell to Rubin in less than three months shows that competition in the AI ​​chip market is intense. The company is also experiencing tough competition from other tech giants such as Amazon, AMD, Google, Intel and others.

Huang said the computing industry is facing a significant shift driven by Nvidia’s AI and accelerated computing innovation. The new Ruby chip platform will feature advanced GPUs and a central processor called “Vera,” although few details were given in the announcement.

Upcoming stock split 10 for 1

After announcing its strong earnings report on May 22, Nvidia also announced a 1:10 stock split. This will make it easier for investors to buy shares of the AI ​​chip giant. Shares saw a 9% increase following the news, and the market is expecting further gains even after the split.

As a result of the stock split, shareholders will receive ten additional shares for each one they own. Shareholders as of June 6 received nine additional shares after the stock market closed on June 7. Split-adjusted trading will begin on June 10.

This increased the number of shares tenfold and caused the prices of individual shares to fall without affecting the overall investment value or market capitalization.

The aim of the stock split was to expand Nvidia’s investor base and increase liquidity. However, the high price of the stock may have deterred some investors.

Nvidia cited accessibility as its motive to make it easier for employees and investors to own shares. A falling share price could also make it easier to get included in price-weighted indices such as the Dow Jones Industrial Average.

NVDA stock remains a strong buy

Nvidia plans to launch its Ruby platform in early 2025. The chips will be produced by Taiwan Semiconductor Manufacturing.

The Rubin platform’s 4x crosshair design, which is larger than Blackwell’s 3.3x crosshair, has sparked positive sentiment in NVDA and TSM stocks. Conversely, AMD’s share price decline suggests market optimism about Nvidia’s new chips and partnerships.

Nvidia has doubled its share value since the beginning of the year and has reached a market capitalization of over three trillion dollars. The company is aiming for the top spot among publicly traded companies, supported by a strong buy recommendation from analysts.

As of the publication date, Chris MacDonald did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s disclosure policies.