We recently published 10 Stock News You Should Not Miss as Tom Lee Reiterates Bullish Market Outlook Amid AI Catalysts. NVIDIA Corporation (NASDAQ:NVDA) is one of the stock news you should not miss.
Trade tensions between the US and China are rising after Trump announced new tariffs following the Asian country’s move to restrict exports of rare earths. However, some analysts believe this is not a major headwind for AI stocks like Nvidia.
Ross Mayfield, Investment Strategist at Baird, said in a latest program on CNBC that the recent trade tensions between the US and China over rare earth minerals will not significantly impact the ongoing AI bull market.
“I mean obviously it’s not good news. I mean we saw some of the news about rare earths a couple days ago as well. I think putting the screws to the US a little bit ahead of the next round of negotiations makes a lot of sense. You know, as far as NVIDIA Corp (NASDAQ:NVDA), obviously, they’ve printed amazing quarters, excluding the Chinese market entirely. So I don’t think it’s a gamechanger or anything. I don’t think the market is all that surprised that China is trying to build up its own chip industry. But, you know, on the whole a negative, I just don’t think it’s the thing that’s going to knock this market off this bull run we see.”
With its strong position in the data center market and rising demand, Nvidia is likely to keep growing, though not at the same pace it has in the past. Increasing competition from major companies like Broadcom is also expected to impact Nvidia’s margins in the long term.
The current AI boom cycle stems from spending by major tech companies, and Nvidia is the biggest beneficiary of this spending. In Q2 FY2026, three direct customers accounted for 23%, 19%, and 14% of NVDA’s accounts receivable. Almost all of the company’s revenue comes from AI-related infrastructure spending. In the latest quarter, $41.3 billion of the $46.7 billion revenue came from these clients. The music could stop for Nvidia if these major companies decide to slow down their spending amid a lack of ROI. If investors sense a weakness in CapEx spending, and the market begins to waver, NVDA stock price would be the first to see its impact.
Polen Focus Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its third quarter 2025 investor letter:
“In early August we initiated positions in both NVIDIA Corporation (NASDAQ:NVDA) and Broadcom, after having not owned either company over the past 2½ years following the initial wave of enthusiasm around Gen AI. While we have long admired both companies, their highly cyclical business models have made it extremely difficult to forecast future earnings growth with any degree of conviction. Given our approach of seeking durable and persistent earnings growth that compounds over long holding periods, our concern in holding either was that we would be forced to endure a punishing downcycle within our typical holding period – there is very little room that in a concentrated portfolio of 20-30 companies. In fact, pre ChatGPT, NVIDIA had two punishing down cycles over the preceding five years.
That is specifically what has occurred for NVIDIA and Broadcom. While the sheer magnitude of demand for AI chips, servers and networking equipment was something that we clearly underappreciated, new incremental data points over the past few months lead us to conclude the current boom in AI chips and related hardware will likely continue for the foreseeable future giving us greater conviction over the trajectory of future earnings for both NVIDIA and Broadcom.
NVIDIA produces the fastest chips that are able to process compute intensive tasks like Gen AI training models extremely efficiently, are very flexible so can be used for any type of workload, and as a result are the chips in highest demand as the hyperscalers build out their Gen AI infrastructure (NVIDIA currently receiving 90c of every dollar spent on AI accelerated semiconductors). Their business has a very strong competitive moat, which is partly about the speed of their chips, but also the entire ecosystem they have built around them (programing language, training models and associated network effects)…” (Click here to read the full text)
While we acknowledge the risk and potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
