It’s been an eventful few weeks for Nvidia (NASDAQ:NVDA), which has made some big moves. First off, the company inked a major partnership and investment deal with Intel. Not only is Nvidia investing $5 billion in Intel, but the two tech titans will be collaborating on the development of AI infrastructure and PC products.
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Just days later, Nvidia expanded its AI ambitions with another headline-grabbing announcement – this time with OpenAI. The ChatGPT maker plans to build and deploy 10 gigawatts of AI data centers using Nvidia’s GPUs, while Nvidia will invest up to $100 billion in OpenAI over time.
These back-to-back deals have reinforced Nvidia’s dominance in the AI ecosystem, and the market has taken notice. NVDA’s stock has been riding a six-month rally of more than 60%.
Yet, not everyone is ready to join the celebration. Top investor Robert Izquierdo believes the stock’s meteoric rise calls for some caution.
“After the stock hit an all-time high, it’s ideal to wait for shares to pull back a bit before deciding to buy,” cautions the 5-star investor, who ranks among the top 2% of stock pros tracked by TipRanks.
Izquierdo acknowledges that enthusiasm around Nvidia is well-founded. The Intel and OpenAI partnerships showcase Nvidia’s growing influence beyond chipmaking, as the company positions itself to shape the future of cloud computing and AI infrastructure. In particular, the OpenAI deal underscores what Izquierdo calls a “staggering” market opportunity that could fuel demand for millions of AI chips, offsetting some of the sales pressure from restricted access to China.
“Strategic partnerships with Intel and OpenAI to meet the increasing demand for AI computing power, make Nvidia a worthwhile investment for the long term,” Izquierdo adds.
However, the investor isn’t ready to dive in just yet. Izquierdo is deterred by Nvidia’s high valuations, including a Price-to-Earnings ratio around 54x that the investor terms “not cheap.” (To watch Robert Izquierdo’s track record, click here)
On the other hand, Nvidia continues to be a certified darling of Wall Street, as its 36 Buys, 2 Holds, and 1 Sell give it a Strong Buy consensus rating. Meanwhile, NVDA’s 12-month average price target of $219.71 points to a potential upside of 22%. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.