Dan Ives Says We're in the "3rd Inning" of the AI Revolution. Is Nvidia Stock Still a Buy After the Pullback?

Dan Ives says the AI revolution is still early (about the “third inning,” ~15% through broader AI spending), arguing Nvidia is the key beneficiary. The article notes Nvidia trades at a 22.9 forward P/E (2nd-lowest among the “Magnificent Seven”) and a very low 0.55 PEG, despite demand for its GPUs outstripping supply by 12-to-1. While the stock is down from its early-May peak, the pullback is framed as a buy opportunity rather than a broken thesis.

Analysis

This is mostly a sentiment reinforcement, not a fresh fundamental catalyst, so the immediate tape reaction should be modest unless it hits during a weak market where megacap AI names are already crowded longs. The real mechanism is that sustained AI capex keeps the pricing umbrella over the whole GPU stack intact; that supports NVDA first, but also prolongs the funding window for adjacent winners in power, cooling, networking, and data-center buildout.

The second-order loser is any company selling the narrative that inference efficiency or custom silicon will quickly commoditize the GPU layer. That pressure is most acute for AMD on the high end and for smaller AI ASIC aspirants, because every quarter of supply scarcity gives NVDA more time to entrench software switching costs and standards. Over 1-3 months, the key catalyst is not commentary like this but hyperscaler capex updates and NVDA guidance; over 6-18 months, the risk is that AI spend shifts from buildout to digestion, compressing the multiple even if earnings still grow.

Contrarianly, the market may be underestimating how much of the AI value chain remains upstream of application monetization: if capex is still early, the beneficiaries are infrastructure suppliers, not the most visibly "AI-exposed" software names. What the consensus may be missing is that NVDA’s downside is less about competition than about timing—if lead times normalize faster than expected or China/export restrictions bite, the stock can de-rate before the growth story breaks. Falsifiers: any guide-down, gross margin inflection, or evidence that hyperscaler capex growth decelerates into the next two quarters.

Key Decisions for Investors

• Maintain an NVDA core long, but add only on 3-5% pullbacks or after a confirmed hyperscaler capex upswing; 6-18 month horizon, with the main risk being multiple compression if AI spend pauses.
• Pair trade: long NVDA / short AMD for 1-3 months to express ecosystem dominance and supply scarcity; cut the trade if AMD meaningfully closes performance or design-win gaps.
• Use NVDA call spreads into the next earnings/capex cycle rather than paying outright premium; this is the cleaner way to express upside if AI demand remains early-stage while limiting damage if the stock is already crowded.
• Watchlist alert: if NVDA lead times shorten materially or management/capex commentary from MSFT, AMZN, GOOGL softens, de-risk the long immediately; that would be the first credible sign the 'early innings' thesis is peaking.