Despite the recent news, analysts continue to say that Nvidia artificial intelligence stock is a buy. Here’s why.

Nvidia (NVDA -2.25%) has been one of the best-performing stocks in recent years, a rise that has propelled it to become the most valuable company in the world. But over the past two months, it slipped to second place, and then – briefly – to third, behind two other big tech companies, Apple And Microsoft.

But don’t give up on Nvidia just yet, which has bounced back to second place with a market cap of $3.41 trillion. Many Wall Street analysts believe the best is yet to come for this crucial supplier of chips intended to power artificial intelligence (AI). Here’s what they think about the company’s most recent quarterly results.

Why analysts loved Nvidia’s results

The stock has pulled back in recent weeks, but savvy investors should recognize that this is just noise. Looking at the company’s most recent quarterly results, announced on December 6, almost everything is looking good for Nvidia now.

Wedbush analyst Dan Ives called the earnings report “perfect,” adding that it “should be framed and hung in the Louvre.” He then called CEO Jensen Huang the “godfather of AI” and called the latest Blackwell AI chip from LeBron James’ semiconductor company.

Ives added: “We believe the path to a $4 trillion market cap and beyond is now paved by Nvidia, and this is bullish for the broader tech rally through the end of the year and 2025.”

After the earnings release, analysts at three other companies — J.P. MorganDA Davidson and Bernstein – raised their price targets on the stock.

Gil Luria of Davidson said: “Nvidia is well positioned to extend its growth into next year, given feedback from hyperscalers regarding additional investments in AI compute and capacity. the company to keep its promises even with production setbacks. »

And William Stein of Truist said that Nvidia “remains THE AI company because of its culture of innovation, its ecosystem of incumbent players and its massive investments in software, pre-trained models and services.

Although the chipmaker’s stock has declined recently, Wall Street analysts remain very optimistic about its long-term prospects. Should you buy withdrawal? We will discuss it next.

How to strategically invest in Nvidia right now

There’s a big difference between a company doing well and a stock price doing well. Nvidia is set to grow by leaps and bounds in the years and decades to come.

But the stock price already reflects much of that potential. Even though the company is valued at over $3 trillion, the shares are valued at 30 times sales. Microsoft, for comparison, trades at just 13 times sales, while Apple trades at a relatively paltry 10 times sales.

Of course, Nvidia’s growth rates – current and projected – are much higher than those of either company. And demand for AI infrastructure, while growing rapidly, is likely still in its infancy. The stock, however, has a high multiple, and this reality is generally accompanied by high volatility. Small changes in the growth prospects of an industry or company can greatly affect the valuation multiple, and therefore the stock price.

If you believe in AI for the long term, this could be your chance to start getting into Nvidia. Don’t be shocked if you have short-term opportunities to add to your investment at a lower stock price.

And consider adding other chipmakers to diversify your position. Nvidia currently holds a commanding lead in AI semiconductors, but as previous chip wars have proven, the champion doesn’t always stay there forever.

Nvidia shares are a better deal today than they were a few weeks ago, but be sure to diversify your position accordingly, with new cash available to buy more if short-term volatility returns.

JPMorgan Chase is an advertising partner of Motley Fool Money. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Apple, JPMorgan Chase, Microsoft, Nvidia and Truist Financial. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.