Nvidia (NVDA.US) has successfully allayed investors' concerns about product delays and long-term growth prospects, causing its stock price to rebound. Nvidia closed up 2.4% on Monday, setting a new historical high, but still below the historical peak of $140.747 touched in June. The stock has risen nearly 14% this month; it has risen nearly 179% year-to-date, making it the second-best performing component in the S&P 500 index.

Nvidia's market value surpassed Microsoft's last week to rank second, with a market value of about $3.4 trillion as of Monday's close, widening its lead over Microsoft and maintaining its position as the second-highest market value company in the U.S. stock market after Apple.

Nvidia CEO Huang Renxun stated that the company's Blackwell chip is "fully in production," with market demand being "very crazy." Previously, the Blackwell chip was delayed due to engineering issues, triggering a sell-off of Nvidia's stock by investors. However, this drop has now been erased.

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A report released by Morgan Stanley analysts after meeting with Nvidia's management last week stated that orders for the Blackwell chip have been booked for about 12 months, and "various signs indicate that the business remains strong, with very high visibility into the future."

These comments reinforce the view that Nvidia remains a popular way to invest in artificial intelligence, especially as large technology companies continue to commit to their AI initiatives. For example, Microsoft (MSFT.US) is expected to increase its capital expenditure by nearly a third in fiscal year 2025, reaching $58 billion.

Martin Currie Investment Management portfolio manager Zehrid Osmani said, "There has always been skepticism about the potential impact of the delay in Blackwell chip production, so this latest news is reassuring."

In addition to the optimism surrounding the Blackwell chip, TSMC's (TSM.US) September performance also showed strong artificial intelligence demand, and OpenAI's valuation reached $157 billion in a new round of financing, with the company recently releasing an artificial intelligence model with reasoning capabilities. Gabelli Funds portfolio manager John Belton said that these actual events "have reignited interest in the field, and people are very excited about the use cases for reasoning-based artificial intelligence." He added, "Reasoning represents a new area for Nvidia, and when you consider its computational intensity, it could be a huge new product category."

John Belton considers Nvidia a core holding and believes that artificial intelligence will provide "steady demand" in the coming years. He said, "It's not an undiscovered stock, but if it can achieve the expected numbers, the valuation is still reasonable."

Data compiled by the media shows that Wall Street analysts expect Nvidia's revenue to more than double this fiscal year and to grow by another 44% in the next fiscal year. Over the past quarter, analysts have continuously raised their expectations for Nvidia's performance.

Nvidia's strong growth prospects have curbed its valuation and helped bulls continue to buy in. The stock's price-to-earnings ratio is higher than 37 times, with a premium over the Nasdaq 100 index, but lower than its five-year average and below the peak of over 44 times reached in June. Zehrid Osmani said, "Nvidia still looks formidable." "It remains well-positioned to capitalize on artificial intelligence opportunities."The options market has also shown signs of optimism. Last Thursday, there was a surge in buying Nvidia call options. Additionally, the cost of the stock's call options relative to put options has decreased, making the cost of betting on further increases lower. Dan Flax, Managing Director and Senior Research Analyst at Neuberger Berman, said: "Stock prices will continue to fluctuate, and the number of orders will fluctuate." "But as long as Nvidia executes its product roadmap, it will drive healthy growth and keep its stock attractive."