A spate of sector and macro-related developments has led to a pullback in chip stocks, Nvidia (NASDAQ:NVDA) stock included.

Although NVDA stock has only experienced a single-digit price decline, you may be concerned that this may be the beginning of the end to the chip company’s 2023 super rally.

However, it’s far too soon to jump to that conclusion. Why? For one, the secular growth trend behind the stock’s powerful performance this year, the generative artificial intelligence mega trend, is not slowing down.

Not only that, as the dominant name in AI chips, the company remains poised to receive an outsized benefit from said trend. This will probably lead to the results necessary to justify an even further move higher for shares.

With this, let’s take a closer look and see why there’s more runway ahead for this chip stock winner.

NVDA Stock and its Recent Dip

On Aug. 2, a double-whammy of negative news indirectly related to the company hit Nvidia shares. First, ratings agency Fitch’s downgrade of the U.S. Government’s credit rating pushed treasury yields up, and led to a slight sell-off among stocks across-the-board.

Second, news of rival Advanced Micro Devices’ (NASDAQ:AMD) underwhelming updates to its guidance. This development was an even larger driver of the sell-off in semiconductor names like NVDA stock.

Concerns are again rising that a rebound in demand among non-AI chip end users remains a work-in-progress.

The jury’s still out whether the broad market’s latest dip is temporary, or if the U.S. debt downgrade, plus other upcoming macro data (such as the latest on inflation and interest rates) means another round of volatility lies ahead.

Regarding the AMD news, it’s also unclear whether similar news from other chip makers will further dampen sentiment for the sector.

However, while NVDA is far from immune from macro and sector-specific factors, there is one company-specific factor that may end up helping to outweigh these issues. That would be Nvidia’s dominant position in AI chips, and its possible impact on results in the coming quarters.

AI Could Keep Saving the Day in a Big Way

In my last NVDA stock article, I discussed how the company’s leading position in AI chips gave it a serious leg up on the competition.

Although AMD and other rivals are making big moves into this area, this will not affect Nvidia’s AI-related growth, given the “winner takes most” dynamics at play.

But not only could Nvidia’s AI dominance keep the competition at bay. It may just well enable the company to continue reporting strong growth, irrespective of whether the tech slowdown keeps affecting non-AI chip demand. As analysts at Bernstein recently argued, AI-related revenue for Nvidia next year could handily beat current expectations.

Per the sell-side firm’s estimates, as the company maintains its dominant position, and expands its packaging capacity, data-center AI revenue could come in between $75 billion and $90 billion next year. Admittedly, this forecast may sound far-fetched at first.

After all, Wall Street consensus calls for Nvidia’s total revenue to come in at “just” $43.5 billion this fiscal year (ending January 2024), and $56.2 billion next fiscal year (ending January 2025).

Yet even if Bernstein is only partially correct, such growth will be sufficient for NVDA to sustain (and add to) its current valuation.

Still in the Buy Zone

Let’s be clear. If the recent dip among stocks (especially chip stocks) ends up being a correction, expect the road for NVDA to be bumpy in the immediate term.

However, I wouldn’t assume that, after spiking three-fold over the past seven months, NVDA is about to give all of these gains back. Additional indication of strong AI-related growth will mitigate the extent of near-term price declines.

On a longer time frame, AI growth is more than enough to send shares to even loftier price levels.

The top end of analyst forecasts call for earnings nearing $20 per share in FY2025. For FY2026, earnings could come in far north of $20 per share.

Still in a position to soar to $500 per share (and beyond), NVDA stock is in the buy zone at current prices, and an even stronger buy on weakness.

NVDA stock earns an A rating in Portfolio Grader.

On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.