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Semiconductor stocks surged in April as tensions in Iran cooled, AI spending continued to rise, sector earnings reports impressed investors, and chip shortages spread across the industry. The iShares Semiconductor ETF (SOXX) gained 40.4% for the month through April 24, while Nvidia (NVDA) rose 4.30% over the same period.
Nvidia, the sector leader and the world’s most valuable company, has regained the $5 trillion market-cap milestone after briefly reaching it in late October. The stock is trading about 2% below its all-time high.
Fears of an AI bubble that weighed on AI stocks earlier appear to have eased. Valuations for AI start-ups such as OpenAI and Anthropic have climbed, and SpaceX—described as a major Nvidia customer—is targeting a $2 trillion valuation.
Capital spending plans also point to sustained demand for chips. The four largest hyperscalers are set to spend around $700 billion on capital expenditures this year, much of it on chips. In parallel, signs of chip shortages have intensified in recent weeks.
Nvidia’s dominance in the data-center GPU market remains intact. The company’s revenue growth rate accelerated in recent quarters, reaching 73% in the fourth quarter, alongside “sky-high margins,” according to the article. The supply-and-demand backdrop continues to favor chipmakers like Nvidia.
The article outlines two primary concerns. First, the AI boom could eventually fade. While it is unclear whether AI is a bubble, Nvidia is described as a historically cyclical stock, as is chip demand more broadly.
Second, Nvidia’s competitive advantage in GPUs, accelerators, and related components could erode over time as other players—including chips from major tech companies such as Amazon and Alphabet, and competitors like AMD—catch up.
The article argues that “easy money” has already been made, noting that Nvidia gained 19% for the month—less than its peer group—suggesting the broader AI-driven rally has spread across the sector, including memory chip and CPU makers.
Even so, it says Nvidia’s valuation leaves room for upside relative to fundamentals. At a market cap of $5 trillion, the article notes Nvidia is nearly $1 trillion higher than Alphabet, the next most valuable company. It also cites Nvidia’s price-to-earnings ratio as just above 40, alongside revenue growth of 73% in its most recent quarter.
It further points to Nvidia’s ecosystem, including its CUDA software library, and a “monopoly-like” market share in data-center GPUs as sources of a durable economic moat.
The article states that challenges cited by skeptics have not materialized. It also highlights Nvidia’s new Rubin platform, which is on track to be available in the second half of 2026 and is expected to be significantly more expensive than the Blackwell platform, potentially supporting another growth phase.
Finally, it cites CEO Jensen Huang’s prediction that Nvidia could generate $1 trillion in revenue over the next two years, contrasting with Wall Street estimates mentioned in the article.
Despite being near its all-time high, the article concludes that Nvidia remains a strong buy, describing the stock as undervalued and supported by continued AI demand, market position, and upcoming product momentum.
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