With Nvidia's (NVDA -2.37%) stock price up by a jaw-dropping 214% year to date, its shareholders have been laughing all the way to the bank. And the rally isn't just powered by hype -- the iconic chipmaker has already seen a substantial boost to its revenue from increased demand related to the growing use of generative artificial intelligence (AI). But this booming stock is still a no-brainer buy in November and beyond.

1. The AI megatrend is still in its early stages

According to a Bloomberg Intelligence study, generative AI could become a $1.3 trillion market by 2032. And some of that growth will involve the building of the hardware infrastructure necessary to train these complex systems. Nvidia is and will remain a natural beneficiary of this trend because of its focus on graphics processing units (GPUs), which excel in providing the computing power for AI training because of their ability to handle multiple tasks simultaneously (parallel processing).

Nvidia has a clear lead in that market. OpenAI used its A100 GPU to train ChatGPT, and its newer H100 is among the world's most sought-after hardware -- tech giants like Alphabet and Microsoft are purchasing huge numbers of those chips to build their AI capabilities. But this may only be the beginning of Nvidia's long-term opportunity.

Generative AI and the natural language processing behind platforms like ChatGPT are the most-hyped aspects of AI right now. But the technology involves many other categories, among them robotics, machine learning, and neural networks -- a technology that's expected to aid machines as they master complex tasks like full-self driving. As these other aspects of AI develop, Nvidia could start to see its AI boom (which is currently limited to its data center segment) start to lift its slower-growing businesses such as automotive assistance. 

2. Investors can expect a recovery in gaming

While artificial intelligence has dominated Nvidia's story in 2023, investors shouldn't lose sight of its second-largest business, gaming, which involves selling mass-market GPUs for use in custom gaming computers, laptops, and cryptocurrency mining.

This segment has been under pressure because of macroeconomic challenges like inflation and high interest rates, which hurt consumer purchasing power and encourage buyers to opt for cheaper or used chips instead of Nvidia's latest offerings. The good news is that this business is cyclical, and can bounce back when these challenges ease.

Nvidia's second-quarter results suggest the long-term recovery has already started, as gaming revenue jumped by an impressive 22% year over year to $2.49 billion. Nvidia can continue dominating this opportunity because of its relentless upgrade and innovation cycle. Most recently, the company began shipping its latest family of GPUs -- the RTX 4060, with its new Ada Lovelace Architecture optimized for new techniques like ray tracing, which allows for dramatically more lifelike graphics.

3. Nvidia's valuation is still reasonable

After its dramatic rise in 2023, Nvidia stock looks quite expensive ... on the surface. With a trailing price-to-earnings (P/E) multiple of 109, the stock is valued at a massive premium to the S&P 500 with its average P/E ratio of 24. But Nvidia is a fast-growing company, so backward-looking data paints an incomplete picture of its valuation. With a forward P/E (based on projected earnings over the next 12 months) of just 27, Nvidia's price looks much more reasonable, considering its rapid growth rate and long-term AI opportunity.