Dan Niles Explains Why He Turned Bullish on NVIDIA (NVDA)

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The first was the company’s China write-down after the US government imposed new restrictions on AI chip sales. The second was related to the core dynamics of the AI industry fueling demand:“So training spending is slowing down, but you finally had inference spending picking up. And so that means people are going to ChatGPT, OpenAI, Gemini, which is the one I use a lot. I probably use it 10 to 20 times a day. And you had inference demand really start to take off. Google talked about the fact that in the month of May, the tokens that they were generating were up 50 times year-over-year. And then Microsoft, which obviously was invested in OpenAI back in 2019 before any of us had even heard of ChatGPT in 2022, they came out and said, “Hey, we have a 5x increase in the number of tokens we’re generating. And so you put all that together, companies forecast derisks because of that massive write-down, some of the sovereign AI demand as President Trump went to the Middle East and you had all these deals, all of that stuff.”NVDA is back in the game as even its skeptics are turning bullish amid strong demand for its chips. But Nvidia could face tough competition in the future. Major competitors like Apple, Qualcomm, and AMD are vying for TSMC’s 3nm capacity, which could limit Nvidia's access to these chips. Why? Because Nvidia also uses  TSMC's 3nm process nodes. Nvidia is also facing direct competition from other giants that are deciding to make their own chips. Amazon, with its Trainium2 AI chips, offers alternatives. Trainium2 chips could provide cost savings and superior computational power, which could shift AI workloads away from Nvidia’s offerings.Mar Vista Global Quality Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:“NVIDIA Corporation (NASDAQ:NVDA) shares rebounded from their calendar Q1 lows as investor concerns over DeepSeek’s efficiency gains and U.S. government restrictions on advanced AI semiconductors, such as NVIDIA’s H20 family of GPUs, proved overstated. Demand for NVIDIA’s next-generation Blackwell platform remains strong, fueled by the growing complexity of large language models and the emergence of reasoning-based applications. As CEO Jensen Huang noted, reasoning tasks can require up to 10 times the compute power of training a conventional large language model. With the AI market still in the early stages of a multi-year infrastructure build-out, NVIDIA is well-positioned to capture significant value as the industry standard for accelerated computing.”Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,320.89 +11.27 (+0.18%)Dow 3044,675.19 +172.75 (+0.39%)Nasdaq20,886.71 -5.97 (-0.03%)Russell 20002,262.01 +13.25 (+0.59%)VIX16.12 -0.38 (-2.30%)Gold3,422.20 -21.50 (-0.62%)PortfolioSign in to access your portfolioSign inTop gainersABVX ABIVAX Société Anonyme 66.01 +56.01 (+560.10%)VICR Vicor Corporation 53.50 +8.30 (+18.36%)LW Lamb Weston Holdings, Inc. 56.74 +7.57 (+15.40%)CALM Cal-Maine Foods, Inc. 119.80 +15.09 (+14.41%)TM Toyota Motor Corporation 191.49 +21.54 (+12.68%)Top losersFI Fiserv, Inc. 131.69 -34.29 (-20.66%)TXN Texas Instruments Incorporated 189.23 -25.69 (-11.95%)TLX Telix Pharmaceuticals Limited 14.36 -1.92 (-11.79%)MARA MARA Holdings, Inc. 17.73 -2.15 (-10.82%)ENPH Enphase Energy, Inc. 37.97 -4.53 (-10.67%)Most activeLCID Lucid Group, Inc. 3.1400 +0.0100 (+0.32%)NVDA NVIDIA Corporation 168.52 +1.49 (+0.89%)MARA MARA Holdings, Inc. 17.73 -2.15 (-10.82%)NIO NIO Inc. 5.17 +0.15 (+3.09%)RKT Rocket Companies, Inc. 16.42 +0.42 (+2.63%)Earnings eventsTrending tickersDNUT Krispy Kreme, Inc. 4.9100 +0.7800 (+18.84%)GPRO GoPro, Inc. 2.0250 +0.6550 (+47.81%)T AT&T Inc. 27.25 -0.16 (-0.58%)KSS Kohl's Corporation 12.39 -1.95 (-13.60%)RKT Rocket Companies, Inc. 16.33 +0.33 (+2.06%)Top economic events