Cliff Asness Bullish on NVIDIA: Growth, Profitability, and AI Dominance

Cliff Asness, the founder of AQR Capital Management, has expressed a bullish stance on NVIDIA Corporation (NVDA) due to several compelling reasons. Asness, known for his value and momentum strategies, sees significant long-term prospects in NVIDIA, driven by the company's strong financial performance, dominant market position, and high growth potential.

NVIDIA's exceptional financial results have caught Asness's attention. In the third quarter of fiscal 2025, the company reported sales rising 94% to $35 billion and non-GAAP net income jumping 103% to $0.81 per diluted share. This marks the sixth consecutive quarter of triple-digit earnings growth. Looking ahead, Wall Street expects adjusted earnings to increase 50% in the next 12 months, making the current valuation of 54 times adjusted earnings look relatively cheap.

Asness is particularly drawn to NVIDIA's high margins. The company's EBITDA margin of 75.86% and net profit margin of 55.69% indicate a strong and profitable business model. These high margins allow NVIDIA to reinvest in growth or distribute dividends to shareholders.

NVIDIA's dominance in the AI market is another key factor in Asness's bullish stance. The company has over 80% market share in AI accelerators, thanks to its superior chip performance and the scope of its CUDA software platform. Competitors looking to overcome NVIDIA's dominance would need more than fast chips; they would also need to create a robust software development ecosystem that rivals CUDA. However, NVIDIA has been building out its CUDA platform for the better part of two decades, making it well-positioned to maintain its market leadership in AI accelerators.



Asness also appreciates NVIDIA's sound financial situation, which provides it with significant leeway for investment. This allows the company to capitalize on growth opportunities and maintain its competitive edge.

Analysts covering NVIDIA mostly recommend stock overweighting or purchase, with the average price target revised upwards over the last four months. This strong consensus among analysts indicates a positive outlook on the company's prospects.



In conclusion, Cliff Asness's bullish stance on NVIDIA Corporation is well-founded, given the company's strong financial performance, high margins, dominant market position in AI, and sound financial situation. Asness's focus on value and momentum strategies aligns well with NVIDIA's long-term prospects, making it an attractive investment opportunity. However, investors should remain cautious and monitor the company's progress, as market dynamics and competition can change rapidly.