Nvidia Stock Poised To Rise Amid Strong AI Investments By Hyperscalers, Says Top Investor

Nvidia Corporation NVDA remains strong, with shares recovering double digits a month after the DeepSeek-led selloff.

What Happened: Renowned investor Michael Del Monte is optimistic about Nvidia’s growth trajectory. He stated that no hyperscaler has reduced its capital outlay for computer and data centers, which bodes well for Nvidia, reported Market Insider. Del Monte also highlighted the industry’s current focus on model optimization, which he expects will encourage domestic AI developers to speed up growth and sustain their leadership in AI.

Del Monte further emphasizes the need for more AI data centers to meet enterprise demand. He predicts that AI capital expenditures will increase by nearly 40% year-over-year to reach $313 billion this year, with growth expected to stabilize at these levels in subsequent years.

The investor stated that the industry is going through the "model optimization" stage. "I expect that the emergence of these models will ignite the necessity of domestic AI developers to accelerate growth and development to maintain their leadership in AI," Del Monte explained.

Looking ahead, Del Monte anticipates a strong performance from Nvidia’s fourth-quarter earnings, scheduled for release on February 26. He rates Nvidia stock as a Buy.

"Nvidia's q4'25 earnings have a strong potential to outperform driven by strong data center growth and hyperscalers' continued investment in compute capacity," added the investor.

SEE ALSO: Top 2 Energy Stocks That May Explode This Month

Why It Matters: Investors initially feared that a decrease in capex spending on AI infrastructure would impact the AI giant’s revenues and margins. However, these fears appear to be unfounded as major tech companies continue to invest heavily in AI infrastructure. For instance, Alphabet GOOGL GOOG and Meta Platforms META have announced a capital outlay of $75 billion and $60 to $65 billion respectively in 2025.

The bullish sentiment surrounding Nvidia is not isolated. UBS maintained its bullish stance and noted that Nvidia stands strong against other AI stocks. Nvidia should deliver ‘solid' results amid ‘mixed' sentiment, stated UBS.

Furthermore, Wedbush analyst Dan Ives on CNBC’s Squawk Street reaffirmed his confidence in Nvidia, describing it as a “table pounder” and forecasting that its market cap will eventually reach $5 trillion.

This context underscores the significance of Del Monte’s predictions and the potential growth trajectory for Nvidia.

• READ MORE: Mark Cuban Once Said ‘The Stock Market Is for Suckers,’ Calling ‘Buy And Hold’ the Second Most Misleading Slogan Ever—’Right After Rinse And Repeat’

Image via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.