Artificial intelligence chip wunderkind Nvidia (NVDA 6.18%) failed to impress investors with its opening monologue at its GTC 2024 conference this week. The chips giant's share price on Wednesday afternoon is effectively right where it was on Saturday before the conference began.

Part of the reason is that Nvidia stock is already pretty richly priced at $850 a share, a seemingly crazy valuation of more than 36 times trailing sales. And yet, one analyst -- Piper Sandler's Harsh Kumar -- thinks $850 is only the beginning for Nvidia stock, which is boarding a non-stop train to $1,050 this coming year. That would imply an 18% jump from the current price.

Is Nvidia stock a buy at $850?

In many respects, this analyst's note (covered on StreetInsider.com Wednesday morning), resembles what all analysts have been saying about Nvidia and GTC 2024. Kumar raves about Nvidia's multiple partnerships with AI companies, its multiple "initiatives" in both hardware and software sales, and its "newest GPU architecture, Blackwell, which succeeds the Hopper architecture."

What stands out for me, though, is Kumar's almost offhand reference to "the decade-long transition to accelerated computing and generative AI" that is driving Nvidia's sales and earnings higher.

Veteran investors know that the semiconductor industry runs in cycles. Downcycles, like the one we're coming out of now, tend to last six to 18 months on average, as semiconductor buyers work through excess inventory and semiconductor sellers suffer through weak profit margins. But since the industry was born in 1963, upcycles -- in which high demand and low supply drive strong profit margins -- have averaged more than three times as long, about 4.5 years on average.

That already makes a strong case for thinking long-term when investing in semiconductors. But what if this AI chips revolution lasts twice as long as average? If that's the case, and Nvidia's profits, which are already quite powerful at a 48.8% net margin, have another 9-10 years of growth ahead of them, the case for buying Nvidia stock could be a whole lot stronger than most people even imagine today.