The Case for Buying NVIDIA Stock Ahead of the Robotics Surge

For those concerned about NVIDIA’s (NASDAQ: NVDA) prospects and the staying power of AI, don’t fret. NVIDIA is at the heart of the next tech revolution, which will come after AI: robotics. As crucial as robotic automation is today, it will only become more entrenched in daily life as AI advances.

AI is critical to robotics; it is the brain driving the machine and is forecast to drive rapid advancement in robotic technology over the next five years. With more than two million developers using NVIDIA’s robotics stack today, it's only a matter of time before the next ground-breaking advancement.

The impact on NVIDIA’s business will be profound. The company leaned into robotics and automation nearly as early as it did with GPU and parallel computing and is the leader today. Its full-stack approach to technology enables an end-to-end solution for developers looking to embed AI at the edge and empower robotic technology. 

Putting that into dollar value, the robotics industry is estimated at roughly $75 billion today. It is expected to grow by nearly 150% in the next five years, a 20% CAGR, with much of the spending focusing on NVIDIA’s architecture, hardware, and services.

As it stands, NVIDIA’s robotics and automation division remains a small 1% or so of the business, but it is growing rapidly, up by roughly 75% in the first half of the year. 

Robust Analyst Trends Support NVIDIA’s Share Price Outlook

The share price outlook for NVIDIA remains robustly bullish and is underpinned by the analysts' sentiment trends. While caution has crept into the outlook with one analyst downgrading to sell in August, but more are upgrading, enough to put NVIDIA on MarketBeat’s list of Most Upgraded Stocks.

The stock is pegged at Moderate Buy. The bias is firmly bullish, with 85% of the analysts rating it as a Buy or higher, and the price target revision trend is positive. The consensus suggests NVIDIA is trading near fair value as of mid-August, but the latest updates put this market in the range of $225 to $250, a 40% upside when reached. 

NVIDIA’s valuation metrics also support a robust share price outlook, aligning with a steady increase over the next ten years. The stock is valued at roughly 42x its earnings in 2025, not an astronomical amount for this stock at any time, with the 2030 and 2035 price multiples halved and halved again.

In this scenario, the stock trades at roughly 12x its forward earnings, which are set to increase by 200% to 300% over the next decade.  

The Next Catalyst for NVIDIA Is Earnings

Although the resumption of H20 sales to China was not the market catalyst it could have been, China is still a driver for this stock over time. The latest news includes the development of B30A. The B30A is an AI-specific GPU built on the Blackwell architecture that is more powerful than the H20 yet still compliant with export restrictions.

The only risk is that a license will not be granted, but recent developments suggest that’s not the case. U.S. Treasury Secretary Scott Bessent states that the administration aims to limit access to sensitive technology while helping NVIDIA (and other U.S. semiconductor companies) maintain market share versus Huawei. 

The technical action is bullish. NVIDIA rebounded strongly from April’s lows, set a new high, and continued higher through mid-Q3. The most recent action shows that the market is consolidated, but maintaining record-high levels, aligning with the uptrend. The market will likely continue to move higher due to the convergence in MACD, which indicates a strengthening market.

The next visible catalyst will arrive when the company reports earnings at the end of the month. The analysts forecast another 50% YOY revenue gain to bring the two-year total to nearly 250%, and the consensus is likely to be low. 

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The article "The Case for Buying NVIDIA Stock Ahead of the Robotics Surge" first appeared on MarketBeat.