Nvidia (NVDA) is climbing slightly after investment bank Wedbush Securities predicted that the chip maker would deliver "clear beat-and-raise" financial results later this week.

Why Wedbush Expects Nvidia's Results to Beat Expectations

The investment bank expects NVDA to report stronger-than-expected fourth-quarter financial results and raise its guidance when it reports its earnings on Feb 26.

"Enterprise driven demand is accelerating as more companies and governments...head down the AI yellow brick road,” the firm wrote.

Wedbush added that the demand for the company's Blackwell chip " is far outstripping supply."

Wedbush noted that the capital expenditures of the Magnificent 7 companies, a large portion of which consists of AI investments, are expected to jump by about $100 billion this year

The investment bank also reported that it had not heard of any companies or government agencies reducing their purchases of Nvidia's chips in order to switch to DeepSeek's offerings.

Wedbush Expects NVDA to Continue to Benefit From the AI Boom

Generally, companies are spending 10%-15 of their budgets on AI, and NVDA should benefit from this trend, Wedbush believes. According to the investment bank, NVDA should also get a lift from Project Stargate, the $500 billion AI-infrastructure initiative being spearheaded by SoftBank (SFTBY) and Oracle (ORCL).

While we acknowledge the potential of NVDA, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.