Despite a significant surge in its stock price, Nvidia (NVDA 2.63%) has struggled to keep pace with the broader market in recent months. This raises an important question for investors: is now the ideal time to capitalize on Nvidia’s lackluster share performance?

Over the past year, Nvidia’s stock skyrocketed by around 85%. However, it has dipped in value over the last four months, even as the S&P 500 enjoyed a total return of roughly 4%. Presently, there seems to be over $300 billion in reasons to consider purchasing Nvidia shares. This is largely due to the numerous major tech firms planning to invest nearly $320 billion in data centers and artificial intelligence (AI) infrastructure in the coming year.

Innovative AI Solutions from Hopper, Blackwell, and Rubin

Nvidia’s recent achievements can be easily outlined. The company’s cutting-edge AI graphics processing unit (GPU) chips are experiencing high demand. Based on management’s projections for the upcoming fiscal fourth quarter, annual revenue for the year ending in late January is anticipated to grow by approximately 110% year-over-year. This surge is particularly noteworthy as quarterly revenues approach $40 billion.

Nvidia has also outlined its plans for ongoing innovation, which should sustain demand. The sales of its H100 and H200 GPU chips have significantly contributed to revenue expansion, and the company has commenced production of its Blackwell AI architecture.

According to CEO Jensen Huang, demand for Blackwell is “insane.” Investors will receive an update on Blackwell’s sales when Nvidia announces its earnings on February 26. Additionally, the company is expected to provide insights into its next-generation Rubin AI platform slated for release in 2026.

A Vast Addressable Market

A recent challenge for Nvidia’s stock came from an unexpected announcement by the private Chinese startup DeepSeek, which reportedly developed a high-performing large language model (LLM) at a cost of only $6 million. While the validity of this financial figure is debated, the DeepSeek innovation created uncertainty regarding the future expenditure of major tech companies on Nvidia’s AI offerings.

However, these companies are continuing their investments. Tech giants such as Meta Platforms, Amazon, Alphabet, and Microsoft have all detailed plans for substantial spending on data centers and AI infrastructure by 2025. Collectively, these funding efforts could reach around $320 billion in just one year.

Amazon is poised to take the lead, projecting $100 billion in capital expenditures. CEO Andy Jassy remarked that “the majority of that capex is focused on AI for AWS (Amazon Web Services).” Alphabet is planning to invest about $75 billion, while Meta aims for $65 billion, and Microsoft has set aside $80 billion through June for AI initiatives. Microsoft has already begun to see a return on its AI investments, with Chairman and CEO Satya Nadella noting that its AI business has achieved an annual revenue run rate exceeding $13 billion, marking a 175% year-over-year growth. Nvidia stands out as the foremost provider of hardware for AI infrastructure, likely reaping the largest benefits from this capital influx.

Hidden Catalysts for Nvidia’s Growth

Beyond the tailwinds from increased AI data center investments, Nvidia is also advancing in other areas. Its gaming division has become its second-largest revenue source and has experienced accelerating growth over the past three quarters, reaching levels not seen since the quarterly period ending on May 1, 2022.

Additionally, Nvidia’s professional visualization segment offers platforms for creating industrial AI simulations, enhancing efficiency for industrial developers. This sector’s revenue has consistently grown over the past three quarters, more than doubling in the last two years. The automotive and robotics segments have also seen growth, improving in each of the last five quarters.

These segments not only harness AI but also provide software solutions for Nvidia’s AI hardware clients, creating a synergistic effect as its next-generation AI architectures evolve and are integrated into diverse platform solutions.

While volatility in share prices may accompany the upcoming quarterly report, investors are encouraged to maintain their positions in Nvidia for its long-term growth potential. Any price corrections that arise from the earnings report could present an advantageous opportunity to acquire additional shares of Nvidia.