Nvidia's (NVDA) fundamentals are "rock solid," and the company's powerful business will ultimately propel its shares higher, Vivek Arya, Bank of America's Senior Semiconductor Analyst told CNBC today.

Arya: Fundamentals Will Triumph Over Fears

Worries over geopolitical issues and new restrictions that could be placed on the export of Nvidia's chips have been holding its shares down, the analyst reported. For example, in May a new AI diffusion rule, which was initiated by the Biden administration at the end of its tenure, may go into effect and place further limits on the export of NVDA's products, Arya noted.

But NVDA's "exceptionally strong fundamentals" and its "compelling valuation" will ultimately propel the stock higher, the analyst believes. However, he warned that over "the next few weeks," the shares will likely continue to be volatile due to worries about geopolitical issues.

A "Very Successful" Conference

According to Arya, NVDA's recent GTC conference was "very successful." He noted that NVDA showed how data centers' spending is likely to surge to $1 trillion, while the computing needs of AI reasoning models are poised to surge by 10 to 100 times.

The Recent Price Action of NVDA

In the last month, the shares have dropped 5.5%, while they are down 19% in the last three months.

While we acknowledge the potential of NVDA as an investment, 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 as promising as NVDA but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

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