Nvidia Stock Poised to Break Out as Demand Exceeds Supply 12:1

Nvidia's stock price may be lagging behind this year, but tech analyst Dan Ives believes it's only a matter of time before the company breaks out. The reason: demand for Nvidia's chips is outpacing supply by a staggering 12 to 1.

Ives made his comments on CNBC, citing the AI revolution as still in its early stages. He noted that physical AI applications like humanoid robots and self-driving vehicles have yet to fully materialize, which could lead to even higher demand for Nvidia's chips.

The tech giant's biggest customers are already ramping up their capital expenditures, with Alphabet increasing its full-year guidance to $195 billion-$205 billion. Amazon is also raising its projected capital expenditures to $220 billion, while Microsoft set ambitious targets and confirmed it will achieve positive free cash flow in fiscal 2027.

Nvidia's fundamentals are looking strong, with revenue surging by 85% year over year in the company's fiscal 2027 first quarter. Net income more than tripled year over year, resulting in a 22 forward P/E ratio that is similar to the S&P 500's P/E ratio.