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There's no getting around it: Artificial intelligence (AI) has taken the tech world by storm, and Nvidia (NASDAQ: NVDA) has been leading the charge. In recent weeks, however, the stock has stalled, with some investors fearing the worst.

One Wall Street analyst believes the stock is merely gathering stream for its next leg higher.

A long profitable road ahead

Evercore ISI analyst Kirk Materne initiated coverage on Nvidia stock with an outperform (buy) rating while assigning a $1,160 price target on the stock. That represents a potential upside for investors of 35%, compared to Monday's closing price. The analyst stresses Nvidia isn't just a chip company but also supplies hardware and software stacks that rivals simply can't match.

The analyst has a point. Nvidia has gone far beyond merely providing the chips that run AI. The company has developed processors, software, accelerators, links, and entire plug-and-play systems that take businesses from zero to 60 with the turn of a key.

Materne points out that every 15 to 20 years, a new "computing era" emerges, which is "typically dominated by a single vertically integrated ecosystem company, whose returns are measured in 100- to 1000-bagger range." In this scenario, Nvidia is that company.

While 2023 was a breakout year for generative AI, and early adopters jumped on the bandwagon, it's still very early in the game, and most businesses have yet to adopt this groundbreaking technology. A recent survey of 300 business leaders found that just 9% were significantly using AI, with many more expected to deploy it in the coming years.

Recent research suggests that it could take a decade or more for the adoption of generative AI to peak. Nvidia has positioned itself as the technological leader, suggesting there's much more to come.

Even after a full fiscal year of more than 100% growth, Nvidia's management suggests there's more to come. While 36x forward earnings might seem pricey, it's attractive when viewed through the lens of the company's ongoing opportunity.

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Danny Vena has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.