Despite surging, then sinking, after the latest Nvidia (NASDAQ:NVDA) earnings release, NVDA stock remains near all-time highs.

Yet while the market remains bullish post-earnings, the skeptics are at it again, laying out the bear case for this top chip maker.

Pointing not to NVDA’s rich valuation, but headwinds related to the company’s generative artificial intelligence growth catalyst, I’ll admit at first glance it seems as if there is substance to their downbeat take on the tech blue chip.

However, upon closer expectation, there are clearly flaws to their argument. Many of the “possible headwinds” cited are being blown out of proportion.

There is one bullish factor for Nvidia, that the bear case completely ignores to talk about.

These will probably enable the company to continue wowing the market with strong results, enabling shares to soar to even higher prices.

The Latest Bearish Case Against NVDA Stock

Previously, Nvidia skeptics leaned heavily on Nvidia’s premium valuation, to argue their case that the stock was in the midst of a bubble, and set to collapse when said bubble burst.

However, with booming demand for AI chips pointing to continued high earnings growth in the coming years, this valuation-based argument against NVDA stock no longer passes muster.

As a result, instead of citing an unsustainable multiple as being the reason to sell/avoid this stock, the bears are now pointing to possible AI disappointment down the road.

A recent article in Barron’s discussed potential challenges ahead, for Nvidia’s AI-related growth.

For instance, demand and margins for Nvidia’s AI chips could come down, as high competition reduces the price of subscription-based generative AI applications, and as end-users exit the market/purchase fewer chips.

In addition, geopolitical tensions could affect AI chip demand from Chinese end-users. Atop this, competing chip makers, after falling behind, could begin making inroads in this market. This, of course, would hurt growth, margins and profitability.

Still, while the latest bear case for Nvidia is far from shallow, a strong counter-argument to it can still be made.

The Bullish Counter-Argument

The bears are free to make their case against NVDA stock, but the same can still be said about the bull case. Again, even as the stock trades at a rich multiple (45.6 times forward earnings), this valuation is more-than-reasonable, when compared to future growth forecasts.

After a big rebound in earnings during this fiscal year (ending January 2024), earnings could rise by another 56.4% in the next fiscal year.

The forecasts call for double-digit growth in the fiscal year after that as well. While forecasts are far from certain, a lot still points to the company meeting/beating these estimates.

For all the talk of the “AI gold rush” ending, few signs suggest that this is happening. Given the enormous opportunity in the new tech frontier, the giants of Silicon Valley continue to pump billions into AI. This bodes well for Nvidia, given its “picks and shovels” status.

It’s too early to say whether tense U.S.-China relations will lead to an earnings miss down the road. However, the same uncertainty applies to the risk of chip rivals like Advanced Micro Devices (NASDAQ:AMD) eventually posing a serious threat to Nvidia.

Bottom Line: Fade the Skeptics and Buy Nvidia

Besides jumping too quickly to conclusions with possible AI-related risks, those bearish about NVDA are also not talking about another material factor on its side.

Nvidia isn’t just providing the chip powering the AI revolution. The company is providing much of the AI software and other services as well.

Along with providing additional revenue streams, this also suggests the market leader has dug a deep competitive moat for itself, which may help to keep the AMDs of the world at bay.

Throw in a likely boost to results from non-AI chip demand (chips for gaming and PCs) normalizing, and it remains difficult to see the good times soon ending for Nvidia.

Put simply, the bears stand to be proven wrong once again. If you’ve yet to enter a NVDA stock position, consider now a fine time to do so.

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.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.