"It's the big question on the minds of investors even before the month of December starts: Will stocks be treated to a Santa Claus rally again this year? Of course, Santa doesn't come around every single year, and while a market pullback alongside a big lump of coal could be left under the tree instead, I'd argue that it makes more sense to consider the year ahead or even the next three years than the next three weeks."
"Undoubtedly, it seems as though expectations have caught up with the legendary GPU maker. And while Alphabet ( NASDAQ:GOOG) Google TPUs and other ASICs could erode a bit of the competitive edge, I do think that it's a mistake to count Nvidia out of the game, given the power of raw AI compute. If AI innovators are serious about moving on the path to recursive self-improvement and achieving some form of superintelligence, arguably, there isn't enough computing power to go around."
Seasonal stock rallies are unreliable, so investors should consider performance over the coming year or three years instead of the next few weeks. Nvidia is up about 33% year to date, outperforming the S&P, though market expectations have largely caught up. Google TPUs and other ASICs pose competitive risks, but Nvidia's raw AI compute advantage supports continued demand. The large performance gains from Gemini 3.0 indicate AI development has not plateaued, which should bolster demand for AI chips. AI monetization, software agents, and progress toward AGI create a durable runway for chipmakers.
Read at 24/7 Wall St.
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