Nvidia’s stock has more than tripled in value this year, and investors have been betting that it is a key player in an artificial intelligence craze poised to transform the economy. But some question whether the chipmaker’s shares, which trade at a hefty premium to the market average, can go much higher.

The company, which started in 1993 and built a reputation for designing graphical processing units for video games, is now the dominant supplier of AI chips. Nvidia’s latest flagship product, unveiled last week at the Siggraph conference in Los Angeles, is expected to cement its lead in this hot technology industry segment.

Nvidia’s new chips, Blackwell, are designed to be powerful enough to train artificial intelligence systems. They are based on the same architecture as Nvidia’s existing products but use a faster memory type, high-bandwidth memory 3, which can access information at a rate of 5 terabytes per second. The chips are also designed to run more efficiently, cutting energy consumption by 30%.

These features are expected to give Nvidia’s new chips an edge over the competition, notably Intel (INTC.O), which currently holds about 80% of the U.S. market for AI processors, and Advanced Micro Devices (AMD.O), which has been battling Nvidia for years over pricing and performance. Nvidia has also taken steps to bolster its dominance in AI by partnering with companies such as Pixar, Disney, Adobe, and Autodesk to speed up adoption.

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Nvidia shares dipped in premarket trading on Tuesday, erasing some of the gains made by the tech-heavy Nasdaq index, which has reached repeated record highs in recent weeks. Several other semiconductor stocks declined with Nvidia, including Super Micro Computer (SMCI.O) and AMD.

Investors are preparing for Nvidia’s earnings report on Wednesday after the market closes. According to Wolfe Research strategist Chris Senyek, a strong report would likely confirm the momentum that has driven stocks to their highest levels in nearly two years.

Nvidia is expected to report earnings that are at least in line with forecasts, and some analysts believe its current valuation makes the chipmaker a bargain. Despite its recent surge, the stock still has a forward price-to-earnings ratio of just under 40.

“The long-term outlook for Nvidia is positive,” wrote analyst Colin Roy of Cowen & Co. in a note to clients. He expects revenue growth to decelerate slightly in the medium term as comparisons in Nvidia’s core gaming business become more arduous. Still, a shift to emerging markets like data center acceleration, machine learning/artificial intelligence, and autonomous driving could drive future profits. He maintained his ‘buy’ rating on the stock.