Nvidia: An Undervalued Investment Opportunity
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Should l Buy NVDA?
Source: Fool
- Market Undervaluation: Despite being one of the largest companies globally, Nvidia's stock is considered undervalued, with a current market cap of $4.5 trillion and a PE ratio of only 24, indicating market skepticism about its future growth.
- Strong Growth Expectations: Nvidia is projected to achieve a 52% revenue growth in fiscal year 2027, primarily driven by a surge in AI spending, with analysts estimating revenues between $226 billion and $412 billion, reflecting varying market sentiments about its potential.
- Clear Competitive Advantage: Nvidia's GPUs are the preferred computing units for running AI workloads, and with the rollout of its next-gen Rubin architecture and a rebound in GPU sales to China, it is expected to further exceed performance expectations.
- Investment Recommendation: Given Nvidia's rapid growth and relatively cheap valuation, investors are advised to buy shares now and hold for several years, as this could yield significant returns.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Oracle's Market Challenges: Oracle, with a market cap of $440 billion, has seen its stock drop over 52% since last September, primarily due to high spending on AI infrastructure and a debt exceeding $100 billion, raising concerns about its financial health among investors.
- Financial Performance Highlights: Oracle's recent Q2 FY2026 earnings report revealed a 14% year-over-year revenue increase to $16.05 billion, with net income soaring 95% to $6.13 billion, including a $2.7 billion pre-tax gain, showcasing its strong growth potential in the cloud computing sector.
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- Rising Capital Expenditure: AI hyperscalers have announced record capital expenditure plans for 2026, with global data center spending projected to reach $3 trillion to $4 trillion annually, positioning Nvidia as a key beneficiary.
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- Strong Growth Expectations: Nvidia is projected to achieve a 52% revenue growth in fiscal year 2027, primarily driven by a surge in AI spending, with analysts estimating revenues between $226 billion and $412 billion, reflecting varying market sentiments about its potential.
- Clear Competitive Advantage: Nvidia's GPUs are the preferred computing units for running AI workloads, and with the rollout of its next-gen Rubin architecture and a rebound in GPU sales to China, it is expected to further exceed performance expectations.
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- Oracle's Market Challenges: Oracle, with a market cap of $440 billion, has seen its stock drop over 52% since last September, primarily due to high spending on AI infrastructure and a debt exceeding $100 billion, raising concerns about its financial health among investors.
- Financial Performance Highlights: Oracle's recent Q2 FY2026 earnings report revealed a 14% year-over-year revenue increase to $16.05 billion, with net income soaring 95% to $6.13 billion, including a $2.7 billion pre-tax gain, showcasing its strong growth potential in the cloud computing sector.
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See More
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- Valuation Drop: Nvidia's stock currently trades at a forward P/E ratio of 25, slightly above last spring's lows, yet the market's strong growth expectations could yield substantial returns for investors.
- Market Recovery: Despite a pullback in tech stocks since October, Nvidia's price is poised for significant growth in the coming years, particularly as the AI computing market continues to expand.
- Rising Capital Expenditure: AI hyperscalers have announced record capital expenditure plans for 2026, with global data center spending projected to reach $3 trillion to $4 trillion annually, positioning Nvidia as a key beneficiary.
- Strong Revenue Outlook: Analysts forecast a 52% revenue increase for Nvidia in fiscal 2027, indicating robust performance in the AI sector and sustained market demand, despite a slight slowdown in growth rate.
See More
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- Stock Volatility: IonQ's stock has declined by 14% year-to-date in 2026, despite reaching a 52-week high of $84.64 in October 2025, indicating a cautious market sentiment regarding its future growth potential and presenting a potential buying opportunity for investors.
- Technology Expansion: IonQ has strengthened its quantum computing platform through acquisitions like Skyloom and SkyWater Technology, enhancing its capabilities in quantum chip manufacturing and network construction, which will help address challenges in quantum data transmission and improve its competitive position in the market.
- Financial Situation: Despite a 222% year-over-year revenue increase to $39.9 million in Q3, IonQ faced significant financial pressure with operating expenses soaring to $208.7 million, resulting in an operating loss of $168.8 million, highlighting the costs associated with its aggressive expansion strategy.
- Future Outlook: IonQ expects sales to range between $106 million and $110 million in 2025, a substantial increase from $43.1 million in 2024, suggesting that despite the current stock decline, its potential in the quantum computing sector continues to attract investor interest.
See More
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- Market Undervaluation: Despite being one of the largest companies globally, Nvidia's stock is considered undervalued, with a current market cap of $4.5 trillion and a PE ratio of only 24, indicating market skepticism about its future growth.
- Strong Growth Expectations: Nvidia is projected to achieve a 52% revenue growth in fiscal year 2027, primarily driven by a surge in AI spending, with analysts estimating revenues between $226 billion and $412 billion, reflecting varying market sentiments about its potential.
- Clear Competitive Advantage: Nvidia's GPUs are the preferred computing units for running AI workloads, and with the rollout of its next-gen Rubin architecture and a rebound in GPU sales to China, it is expected to further exceed performance expectations.
- Investment Recommendation: Given Nvidia's rapid growth and relatively cheap valuation, investors are advised to buy shares now and hold for several years, as this could yield significant returns.
See More
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- Pharmaceutical Strategy: Merck (NYSE: MRK) is making significant strides with strategic acquisitions like the $10.8 billion purchase of Prometheus Biosciences in 2023 and a $10 billion deal for Verona Pharma, expecting to drive $70 billion in new revenue by the mid-2030s, showcasing its long-term growth potential in cancer treatment.
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See More
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- Market Growth Potential: According to Fortune Business Insights, the AI market is projected to grow from $375.9 billion this year to $2.48 trillion by 2034, reflecting a compound annual growth rate of 26.6%, indicating that the widespread adoption of AI technology will drive rapid growth in related industries.
- TSMC's Market Position: TSMC produced over 11,800 products across 288 different processes in 2024, solidifying its position as the world's largest semiconductor foundry and ensuring its critical role in the rapidly expanding AI industry.
- Strong Financial Performance: TSMC reported fourth-quarter revenue of $33.73 billion, up 25.5% year-over-year, with a profit margin of 48.3%, demonstrating its robust profitability and sustained growth potential in the market.
- Technological Innovation and Customer Demand: In 2023, over half of TSMC's revenue came from chips larger than 7 nanometers, but now its production of 3nm and 5nm chips has significantly increased, accounting for 28% and 35% of total shipments respectively, indicating the company's proactive adaptation to market demand for more efficient chips.
See More
