Tom Lee Says NVIDIA (NVDA) Valuation Still Attractive Amid ‘Powerful Tailwinds’

Core Viewpoint - NVIDIA Corp (NASDAQ: NVDA) is highlighted as a trending stock amidst AI bubble warnings, with analysts suggesting strong market tailwinds and attractive stock valuation [1][2]. Group 1: Market Dynamics - There is a significant capital expenditure (capex) tailwind from AI, with the Federal Reserve maintaining a dovish stance for 9 months, which has kept the ISM index below 50 for 31 months [2]. - The upcoming fourth quarter is seasonally strong, and NVIDIA's valuation at 26 times earnings is considered not demanding, indicating potential upside for stocks [2]. Group 2: Company Performance - NVIDIA holds approximately 90% of the GPU market, which is projected to reach $3 to $4 trillion by 2030, with data center capex expected to hit $6.7 trillion [3]. - The company reported solid first-quarter results, despite taking a write-down on China-specific datacenter products due to new export restrictions [4]. - Demand outside of China remains strong, with NVIDIA outpacing expectations and competing products significantly [4]. Group 3: Future Outlook - NVIDIA's next-generation GPU series, Rubin, is anticipated to launch in 2026, and the company maintains a competitive edge in AI computing through its CUDA platform [3]. - There are concerns regarding potential overcapacity in the AI datacenter build, which may impact short-to-medium-term performance [4].