Nvidia stock <\/strong>is one of the best-performing stocks of recent\u00a0years.<\/p>\n NVDA surged 240% in 2023 and another 170% in 2024. And it soared some +2,000% since I first recommended Nvidia in\u00a02018<\/a>:<\/p>\n And despite some calling Nvidia stock a bubble, it actually looks quite undervalued.<\/p>\n People have been saying Nvidia is an expensive stock for\u00a0years.<\/p>\n If you look at its PE (price-to-earnings) ratio, it trades at a high value of 49x trailing earnings.<\/p>\n But when you consider Nvidia\u2019s earnings have doubled in the last year, that valuation makes sense. Anyone who runs a business knows how hard it is to double net income in a year. Nvidia is growing like a nimble startup, but at a multibillion-dollar scale.<\/p>\n To understand how undervalued Nvidia stock is at 49 PE, all you have to do is look at this\u00a0chart:<\/p>\n Source: TrendSpider<\/em><\/p>\n The last time Nvidia\u2019s trailing PE ratio was at this level, the stock surged 740% in under two\u00a0years.<\/p>\n I prefer the forward PE over the trailing PE\u00a0ratio.<\/p>\n It looks at how much company expects to earn over the next 12 months, instead of looking at the past 12\u00a0months.<\/p>\n Again, this indicator shows today\u2019s Nvidia\u2019s valuation is one of the cheapest over the last three\u00a0years:<\/p>\n Source: Koyfin<\/em><\/p>\n The insatiable demand for Nvidia\u2019s GPUs underscores why the stock is still a great buy at today\u2019s\u00a0prices.<\/p>\n Elon Musk\u2019s xAI<\/a> recently launched the Colossus supercomputer, boasting 100,000 Nvidia H100\u00a0GPUs.<\/p>\n But Musk\u2019s ambitions don\u2019t stop there; he plans to deploy a new GPU supercluster by next summer. It will use 300,000 of Nvidia\u2019s Blackwell B200 GPUs, the \u2018world\u2019s most powerful chip\u2019 for\u00a0AI.<\/p>\n Not to be outdone, Meta Platforms (META)<\/a> is on the verge of completing its own 100,000 GPU\u00a0cluster.<\/p>\n Meanwhile, there are the two unnamed tech giants that are planning to invest $125 billion in supercomputers in North Dakota, with one potentially being Microsoft\u2019s (MSFT) rumored $100 billion Stargate supercomputer.<\/a><\/p>\n The demand is so high that Musk and Oracle\u2019s (ORCL) Larry Ellison were \u201cbegging\u201d Nvidia CEO Jensen Huang for more\u00a0GPUs.<\/p>\n Goldman Sachs (GS) analysts recently reaffirmed Nvidia\u2019s buy rating, citing strong demand for accelerated computing beyond the traditional hyperscalers like Amazon (AMZN), Microsoft, and Google\u00a0(GOOG).<\/p>\n As enterprises and even sovereign states begin to invest in AI compute clusters, Nvidia\u2019s customer base is broadening. This diversification is crucial, as it mitigates the risk of over-reliance on a few major\u00a0clients.<\/p>\n Nvidia\u2019s dominance in the AI chip market remains unparalleled, commanding a 90% share with its H100\u00a0GPUs.<\/p>\n While a bunch of big tech companies are developing custom silicon, these efforts do not pose a significant threat to Nvidia\u2019s market position at this\u00a0time.<\/p>\n The company\u2019s pace of innovation ensures it remains the go-to provider for AI hardware.<\/p>\n Bottom line: Nvidia stock is a buy up to $140 at\u00a0least.<\/strong><\/p>\n For more insights, <\/strong>subscribe to my investing letter The\u00a0Jolt\u26a1<\/em><\/strong><\/a>.<\/em><\/strong><\/p>\n I publish fresh research every Monday &\u00a0Friday.<\/p>\n Click here to subscribe<\/a>.<\/p>\n \u2014 Stephen McBride, Chief Analyst at <\/em>RiskHedge<\/em><\/a><\/p>\n Nvidia stock at $130 is cheap<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" Nvidia stock is not a\u00a0bubble Nvidia stock is one of the best-performing stocks of recent\u00a0years. NVDA surged 240% in 2023 and another 170% in 2024. And it soared some +2,000% since I first recommended Nvidia in\u00a02018: And despite some calling Nvidia stock a bubble, it actually looks quite undervalued. The last time Nvidia\u2019s trailing PE […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-31249","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/31249"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31249"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/31249\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The last time Nvidia\u2019s trailing PE ratio was this low, the stock was trading at $18 back in Jan\u00a02023.<\/h3>\n
Nvidia stock looks equally undervalued when looking at its forward PE\u00a0ratio.<\/h3>\n
Nvidia\u2019s long-term prospects remain\u00a0strong.<\/h3>\n