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

Dan Ives argues the AI revolution is early ("third inning"; only ~15% through broader AI spending), positioning Nvidia as the key AI chip leader. Despite Nvidia being off its early-May peak, the article claims the stock is still attractively valued (forward P/E 22.9; PEG 0.55) and cites GPU demand outstripping supply by 12-to-1. Overall, it frames Nvidia’s pullback as a buying opportunity, though it flags the risk that competitors could narrow the supply-demand and differentiation gap.

Analysis

This is less a fresh fundamental update than a sentiment reinforcement for the AI capex complex. The market implication is that NVDA remains the clearest toll collector on the first wave of inference/training spend, but the bigger second-order opportunity is in the plumbing: advanced packaging, HBM memory, and foundry capacity where supply constraints can keep pricing firmer for longer than headline GPU shipments suggest.

The risk is that consensus keeps extrapolating unit scarcity into unlimited duration economics. If hyperscaler monetization lags even modestly, the next leg of the trade will shift from "buy any dip" to scrutiny of ROI, which tends to hit the highest-multiple AI beneficiaries first; that would pressure NVDA multiple expansion before it meaningfully changes absolute earnings power. By contrast, rivals with custom silicon plans or lower-end accelerators need sustained proof of performance-per-dollar gains before they can take share.

Contrarian read: the market may be underpricing how durable the ecosystem is, not just NVDA itself. A continued supply-demand gap is more constructive for TSM/ASML/AMAT/MU than for chasing NVDA at any price, because those names can monetize the capex cycle without bearing as much terminal-growth risk. The thesis is falsified if next data-center guidance implies lead times are normalizing, gross margins flatten, or hyperscaler capex growth rolls over for two consecutive quarters.

Key Decisions for Investors

• Maintain a tactical long in NVDA on weakness over the next 1-3 months; avoid chasing after strength. Falsify on any guide that implies decelerating data-center growth or margin compression.
• Pair trade: long NVDA / short AMD for a 1-3 month horizon to express continued share-dominance and execution gap. Cover if AMD shows unexpected AI revenue acceleration or design-win disclosure.
• Shift incremental AI exposure toward second-order winners TSM and ASML on a 6-12 month view; these names capture capex intensity even if NVDA multiple compresses.
• If options liquidity is attractive, express upside with a 3-6 month NVDA call spread rather than outright calls; this reduces theta risk if the stock consolidates while waiting for the next earnings catalyst.