Nvidia's (NVDA.US) stock price has rebounded significantly this month, rising by 11% and approaching its closing historical high in June, making it the second-best-performing stock in the S&P 500 index. This growth is mainly attributed to the company's successful alleviation of investors' concerns about product delays and long-term growth prospects. CEO Jensen Huang announced that the Blackwell chip has gone into full production with strong market demand, and a Morgan Stanley report also supports this optimistic view, noting that orders have been booked for up to 12 months, with business and prospects remaining robust.

As a result, Nvidia's position as the preferred stock for investing in artificial intelligence has been further solidified, especially against the backdrop of major companies like Microsoft (MSFT.US) increasing their investment in artificial intelligence. It is understood that Microsoft is expected to increase its capital expenditure by nearly a third in the fiscal year 2025, reaching about $58 billion.

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Zehrid Osmani from Martin Currie Investment Management said that concerns about production delays have been alleviated. In addition, the sales situation of TSMC (TSM.US) and the high valuation financing of OpenAI also reflect the strong market demand for artificial intelligence.

John Belton, a portfolio manager at Gabelli Funds, believes that the use cases of inference-based artificial intelligence have reignited market interest, which could bring a huge new product category for Nvidia. Belton sees Nvidia as a core holding and believes that artificial intelligence will bring "steady demand" for years. "This is not an undiscovered stock, but if it can achieve the expected numbers, the valuation is still reasonable."

Data shows that analysts expect Nvidia's revenue to more than double in the current fiscal year and to grow by another 44% in the next fiscal year, and Wall Street is also continuously raising its earnings and profit expectations for Nvidia. It can be seen that Nvidia's growth prospects are very strong, which provides support for its stable valuation and enhances investors' confidence to continue buying. Although the company's price-to-earnings ratio is about 37 times, higher than the Nasdaq 100 index, it is at a lower level compared to the five-year average and the peak of over 44 times in June.

Osmani, a portfolio manager at Martin Currie Investment Management, believes: "Nvidia still appears very strong, and it is in a very favorable position to seize opportunities in the field of artificial intelligence."

Positive signs have also emerged in the options market. In Thursday's trading, a wave of buying enthusiasm occurred, with more than 30 million shares being purchased at prices ranging from $150 to $189 per share, with these options expiring in March. Nvidia's stock closed at $134.80 on Friday's trading.

In addition, the cost of call options relative to put options (the so-called skew) has decreased, making it cheaper for investors to bet on further increases in stock prices. These option contracts will expire after Nvidia is expected to release its fourth-quarter financial report at the end of February.

Dan Flax, Managing Director and Senior Research Analyst at Neuberger Berman, said: "Nvidia's stock price may continue to fluctuate, and order conditions may also be unstable. But if the company can successfully execute its product roadmap, this will drive healthy growth and maintain the attractiveness of the stock."