Two years ago, the April 2023 quarter delivered a historic 18% beat, followed by an even bigger 30% beat in July 2023. Compare that to the most recent quarter ending July 2025 — just a 4% beat, the smallest in two years. The narrowing beats combined with a rare QoQ decline in the Compute segment could be interpreted as Nvidia is running out of steam.
I am frequently asked by notable media anchors if Nvidia could be topping, and as you’ll see below, I substantiate why Nvidia is not running out of steam. I spoke with Charles Payne from Fox Business and Caroline Hyde from Bloomberg, followed by a 45-minute interview on the topic with Maggie Lake of Wealthion. In these conversations, we discussed some of the most pressing issues that AI investors face – does China revenue matter for Nvidia, how does the world’s most valuable company continue to grow, are we in an AI bubble, and lastly – where is the I/O Fund positioning next.
For those new to my firm, the I/O Fund is among the top-performing AI portfolios globally. Our track record was built in part by taking a significant Nvidia position years before the market embraced the AI story, with allocations as high as 10–20%. While our calls on Nvidia are well recognized, we’ve also held a number of lesser-known AI winners that together have driven a cumulative return of 210%. To put that in perspective, if we were a hedge fund, we’d rank #2 — and if we were an ETF, we’d rank #5.
What that ranking should communicate to you is that the I/O Fund does not rest on our laurels, we rigorously pursue a portfolio positioning that will outperform. Let me rephrase this to say that my firm will not continue to hold Nvidia out of fandom, rather, we will continue to hold Nvidia only if we believe the stock continues to offer alpha.
Below, I explain why this stock has the potential to outperform the indexes — and how we’re positioning to capture even greater returns from lesser-known stocks that are riding Nvidia’s momentum.
Is There Alpha Left in Nvidia (NVDA) Stock?
After being crowned the world’s most valuable company with a market cap over $4 trillion, it’s natural to wonder if the easy money has already been made. For investors, the debate comes down to whether Nvidia can keep outpacing both the Nasdaq and its semiconductor peers given its phenomenal run.
Regardless of market fluctuations, Nvidia’s product road map is not slowing down. As described in the videos below, Nvidia is on “the eve of releasing its next generation of GPUs” combined with its enviable software platform CUDA and strong QoQ growth in AI networking (NVLink, Spectrum-X, InfiniBand).
In the interview below with Charles Payne of Fox Business, which took place ahead of earnings, I offer key reasons that Nvidia continues to offer alpha as we head into calendar year 2026 and why we plan to buy the stock on any dips.
I also had the opportunity to talk to Maggie Lake of Wealthion on the importance of Nvidia and why the company is moving from its 2.0 era to the 3.0 era, and how this transition from server-scale to a rack-scale AI systems company is key as to why Nvidia has further room to run. In the clip, I also describe the opportunity that Nvidia is poised to capture that will be as large as the AI hardware opportunity.
The AI Bubble: Fact or Fiction
Fears as to whether AI is reaching bubble territory were ignited this past month when Sam Altman compared AI to the dot-com era, stating: “When bubbles happen, smart people get overexcited about a kernel of truth. If you look at most of the bubbles in history, like the tech bubble, there was a real thing. Tech was really important. The internet was a really big deal. People got overexcited.”
Given OpenAI is seeing about $20 billion in revenue as of now with no profits, it makes sense that Altman would be concerned about valuations. However, a lack of profits is certainly not Nvidia’s concern. The company had a GAAP operating margin of 60.8% in Q2 and an adjusted operating margin of 64.5% with over $13 billion in cash flow for the quarter.
There is clearly a bifurcation in the AI economy as some companies must spend heavily to compete, while others are profiting heavily from the steep competition.
In as lucid of a manner as possible, I break down in the videos below the following:
- Why technically every tech trend goes through a boom/bust, why this should not scare investors off, plus the strategy investors can use to successfully win with surging tech trends
- What companies are more insulated from the effects of a bubble and why AI software like OpenAI is at higher risk
- The differences between an enterprise technology and a consumer technology in terms of how AI will repay Big Tech capex
Nvidia’s Stock Can Reach $6 Trillion Market Cap by Next Year
In an interview that went viral with Caroline Hyde of Bloomberg, I discussed why it’s important to not focus too closely on quarterly earnings reports for determining Nvidia’s growth potential, and to rather focus on GPU generations.
If we look at the revenue potential for quarterly data center revenue once Blackwell and Blackwell Ultra ship in volume, this leads us to a $6 trillion valuation by next year.
Predicting 50% upside may not seem like much given Nvidia is up 325% since early 2024 and up 4,000%+ since my firm first bought the stock in 2018 – however, there is a chance investors have an opportunity to get Nvidia lower.
For example, as recent as January of this year, my firm predicted Nvidia would dip below $100 – this was published before the DeepSeek news hit. This afforded our followers a better entry, leading to higher upside. Next week, we will be updating our buy plan for Nvidia for free. Don’t miss it by signing up for our weekly newsletter here.
