Reasons for the Ongoing Nvidia Rally
Leadership Role in AI and GPU Technology: Nvidia benefits from its dominant position in the field of graphics processors (GPUs) and a strong software ecosystem specifically optimized for AI applications. The full rollout of new technologies like “Blackwell” will be crucial to maintain the lead.
Attractive Valuation: Compared to other tech giants, Nvidia appears relatively undervalued with a price-to-earnings ratio of around 27x (for fiscal year 2026). In comparison: Tesla is trading at over 100 times the expected profit, Apple at 32 times.
Strong Growth Potential: Experts forecast a price increase of about 24% to around $170 per share by 2025. The strong demand for AI solutions continues to drive growth.
Competitive Situation Against Microsoft
Microsoft is seen as a leading player in cloud computing and is also heavily investing in artificial intelligence. Nevertheless, Nvidia’s technological specialization in GPUs and AI hardware could lead it to gain market share or at least a stronger position against Microsoft.
While Microsoft grows through its cloud services, Nvidia is the preferred provider for specialized hardware solutions to accelerate AI applications— a segment with enormous growth potential. This puts Microsoft under certain pressure as both companies are collaborating (e.g., Microsoft uses Nvidia’s chips) but also competing in adjacent areas.
Conclusion
The rally of Nvidia stock is far from over as the company continues to grow strongly and remains attractively valued thanks to its technological leadership in the booming AI market. Although large competitors like Microsoft are also growing and investing, Nvidia has a clear competitive advantage in the core technologies of the future due to its specialized products.