In a recent interview on Bloomberg Television, Steve Eisman, a senior portfolio manager at Neuberger Berman Group, expressed his confidence in chipmaker Nvidia Corp., stating that he considers it a long-term play that will remain relevant for years to come. Eisman, best known for his successful "Big Short" bet against subprime mortgages before the global financial crisis, revealed that he owns a significant number of Nvidia shares.

Eisman's optimism aligns with the market sentiment on Tuesday, as Nvidia's stock rallied 6.8% after a three-day slide that saw shares decline more than 10%, reaching correction territory. Eisman noted that the correction was barely noticeable when looking at Nvidia's chart, suggesting that it didn't hold much significance.

Nvidia, an artificial-intelligence (AI) darling, has experienced significant growth this year due to its dominant position in the market for AI computing chips. Shares surged 43% following the company's May 22 earnings report and stock-split announcement, culminating in Nvidia briefly surpassing Microsoft Corp. as the world's most valuable company.

Concerns have been raised about Nvidia's rapid growth, with skeptics worrying that the company may have expanded too quickly. However, Eisman dismissed these concerns, emphasizing that focusing solely on valuation when shorting a stock is a risky approach. He explained that as long as the story behind a company remains intact, such as Nvidia's strong position in the AI market, the company's future growth potential outweighs valuation concerns.

Saira Malik, the chief investment officer at Nuveen Asset Management LLC, echoed this sentiment. Malik stated that Nvidia is the undisputed winner in the AI space, as any company venturing into AI must use Nvidia's products. She highlighted Nvidia's robust growth rate and argued that its price-to-earnings ratio is not expensive when compared to peers.

Analysts expect Nvidia to continue benefiting from the booming demand for AI. Malik's statement aligns with the growth projections for Nvidia made by Nuveen Asset Management LLC, a global asset manager with $1.3 trillion in assets under management. The company's College Retirement Equities Fund - Stock Account, valued at $125 billion, has outperformed 86% of its peers over the past year.

Despite trading at a premium of approximately 50% to the Nasdaq 100 Index, Nvidia's forward price-to-earnings ratio has recently pulled back from its 2023 high of 63 times to around 40. This places Nvidia's valuation in line with similar companies like Advanced Micro Devices Inc.

Saira Malik also commented on the comparison between the current rally in Nvidia and Microsoft, stating that the dominance of these established companies differentiates the current situation from the dot-com bubble. She affirmed that Nvidia and Microsoft have been investing in the AI trend for years, making them stronger and more sustainable in the market.

As analysts continue to express confidence in Nvidia's long-term prospects, it seems that the company's story is set to last for years, with Nvidia's position in the AI market expected to drive future growth.