Nvidia (NASDAQ:NVDA) is certainly one of the most highly-valued stocks on the market. Recently taking over the fourth position in terms of market capitalization of all stocks globally, NVDA stock has been a big winner for long-term investors, particularly in recent years.

Some price targets for NVDA stock now peg the chip maker surging as high as $1,100 per share. I’m not so sure Nvidia can hit these heights. However, analysts have underestimated its prowess, despite consistent earnings beats in 2023. So, who knows.

With the largest AI supply chain, Nvidia faces high demand, leading to a soaring stock price. Plus, with the launch of its H200 chips in 2024, its growth trajectory seems promising.

Here’s why investors may not want to discount this company often viewed as a pure-play on AI just yet.

Higher Expectations

In November, Nvidia’s stock surged after unveiling new AI and data center chip tech. Sales spiked up to $18.2 billion and profits were reported at $4.02 each. However, despite strong earnings, shares slumped post-report. 

Indeed, 2023 was a memorable year for Nvidia as its revenue more than tripled, and data center demand fueled record-high sales of $14.51 billion.

Nvidia’s stock surged from $200 to more than $700 over the past year. Speculation continues to mount on whether this stock has what it takes to reach $1,000 per share before the end of the year. Some analysts certainly seem to think this could be the case.

Hans Mosesmann, from Rosenblatt Securities, reaffirmed a bullish target of $1,100 for Nvidia within a year. His colleagues predict an average of $687.09. Notably, Goldman Sachs raised its target to $800, citing Nvidia’s AI business strength, and analysts unanimously rate Nvidia as a ‘strong buy.’

Leader in the AI Space

Nvidia’s triumph in the world of artificial intelligence stems from its GPU architecture’s remarkable support for parallel processing. With numerous cores adept at handling parallel tasks simultaneously, Nvidia’s GPUs excel in AI’s demanding computational needs. This capability accelerates deep learning model training, data processing, and neural network computations, enhancing AI performance and cementing NVIDIA’s leadership.

Nvidia’s stock displays exceptional strength, boasting high scores in various metrics. It’s a key player in the group called the “Magnificent Seven,” a group of seven high-growth tech stocks that drive the 2023 and 2024 rallies. Ranking first in the fabless semiconductor group, it frequently appears on prestigious lists.

The company’s dominance in AI stems from prioritizing deep learning and neural network acceleration. Specialized hardware features like Tensor Cores turbocharge crucial operations, such as matrix multiplication, are essential for AI. This optimization has solidified NVIDIA’s leadership in AI solutions.

Partnerships with Strong Companies

Cisco (NASDAQ:CSCO) and Nvidia recently announced a collaboration on Feb. 6 to offer streamlined AI infrastructure solutions for data centers, facilitating easy deployment and management. Cisco Chair and CEO Chuck Robbins also emphasized the need for businesses to learn and adapt AI infrastructures, while Jensen Huang, Nvidia’s CEO, discussed the significance of AI in business innovation.

Both companies, leveraging their networking and GPU technology strengths, collaboratively aim to assist customers in AI transitions with secure Ethernet-based infrastructure. Their partnership extends to various product solutions, enabling hybrid work environments and enhancing data center capabilities for AI cluster management and troubleshooting.

Vladimir Ester, ClusterPower’s CTO, emphasized the importance of streamlined data center infrastructure for AI environments. Cisco and Nvidia’s collaboration addresses this need, offering secure and adaptable solutions for enterprises, as noted by Neil Anderson of World Wide Technology (WWT). Vijay Bhagavath, IDC Research’s VP of Cloud & Data Center Networks, highlighted the partnership’s ability to meet the unique demands of AI workloads.

Buy NVDA in a Heartbeat

Nvidia’s pivotal role in the AI realm is attributed to its hefty investment in research and development. Their relentless pursuit of innovation led to groundbreaking GPU architectures tailored for AI, ensuring a competitive edge and adaptability in a dynamic landscape.

Additionally, NVDA stock has shown remarkable performance, surpassing 98% of assets and all semiconductor stocks in the past year. Predictions vary regarding the company’s valuation potential, highlighting the importance of thorough research and risk assessment before investing. That said, this is a company with mostly bullish catalysts, analysts and investors supporting its rise. Momentum is its friend, and it’s hard to see the bear case for this stock, at least right now.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.