Should You Buy or Sell Nvidia Stock?

Core Viewpoint - Nvidia has experienced significant stock performance due to the AI arms race, but questions arise regarding the sustainability of this growth and whether it remains a smart investment at current levels [1]. Group 1: Sell Argument - Nvidia's growth has been closely linked to the demand for AI, with GPUs being essential for processing complex workloads [2]. - Quarterly revenues have tripled year-over-year in recent years, but growth is beginning to slow due to tougher comparisons [3]. - There is a concern that once companies satisfy their AI computing needs, Nvidia's sales may decline significantly, as future purchases may only involve replacements or gradual increases in capacity [3][4]. Group 2: Buy Argument - GPUs typically require replacement every three to five years, suggesting ongoing demand as companies maintain their computing infrastructure [5]. - The introduction of next-generation chips by Taiwan Semiconductor Manufacturing (TSMC) is expected to enhance power efficiency, prompting upgrades even without increased computing needs [6]. - Nvidia's new Blackwell architecture GPUs are set to significantly outperform the current Hopper architecture, indicating strong future demand [7]. Group 3: Valuation and Future Outlook - Nvidia's stock is trading at 45 times forward earnings, which is considered acceptable given its strong growth trajectory [8]. - The expectation is that Nvidia's growth will continue beyond 2026, supported by an upgrade cycle and various catalysts [8].