With Nasdaq Composite In the bear market territory, many actions resemble good deals compared to their previous values. One of these actions is Nvidia (Nasdaq: NVDA)which is practically action n ° 1 to have on the market since 2023.
With the action to decrease approximately 35% of its record level, many investors are probably wondering if the purchase of Nvidia today could be the transaction of a life and give them fantastic yields and help them set up for life. Is it true? Where is Nvidia a value trap here?
Nvidia was the main action of the market because of its full role in the AI breed. Nvidia does Graphic processing units (GPU)The computer muscle behind many AI models that we see today. GPUs can perform several calculations simultaneously, which is still amplified when hundreds or thousands of GPUs are connected to clusters. This gives users access to breathtaking IT capacity, which is necessary to form models of advanced generative AI.
Nvidia’s actions have been struck because the market assumed that the largest NVIDIA customers (AI hyperscalers) would reduce their data center accumulations due to the fears of an imminent recession (or at least slowing down) caused by the price plan for President Donald Trump.
Although I think there are valid concerns with this argument, AI race is too important to win, and these AI hyperscalers have incredible cash flows that can finance these investments even if their main business struggles a little. Consequently, I think that the history of Nvidia’s growth is still mainly intact, which means that today’s prices are good deals compared to what investors have had to pay in recent months.
Another reason why I think Nvidia is a purchase today is its construction projections. During the NVIDIA GTC event in 2025, CEO Jensen Huang gave the bold prediction that capital expenses of the data center will reach 1 Billion by 2028. Since 2024 has seen around $ 400 billion in capital expenses and that Nvidia has generated $ 130 billion in the last 12 months, this If Nvidia maintains its current tranche of the capital expenditure pie of the data center, this would generate around $ 325 billion in data centers by 2028. It is a monstrous growth in today’s levels and would earn a lot of money for investors.
But let’s be a little more conservative here and say that Nvidia will only add half of this growth over the next four years, indicating that it would generate $ 228 billion. To move forward, having a little pessimism is an intelligent game because there are other competitors who come to the market that target Nvidia’s market share. Personalized AI accelerators are the main equipment that could steal this market share in Nvidia, as they are more powerful than GPUs when the workload is properly configured. In addition, the accumulations of the data center could be lower than planned, and the figure of $ 1 billion may not surface.
