Three Cheap Growth Stocks to Consider
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
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Should l Buy NVDA?
Source: Fool
- Nvidia's Investment Value: Nvidia (NVDA) is currently trading at a forward P/E ratio of about 23 times, which is undervalued given its 62% revenue growth last quarter, indicating significant future growth potential amidst ongoing AI infrastructure spending.
- Salesforce's Market Positioning: Salesforce (CRM) has a forward P/S ratio of only 4 times and a forward P/E ratio below 15 times; despite fears of AI replacement, its acquisition of Informatica and launch of Data 360 position it as a leader in AI data management, showcasing substantial growth opportunities.
- GitLab's Growth Potential: GitLab (GTLB) has a forward P/S ratio of just 4.8 times, and despite concerns about AI impacting software developers, it has consistently grown revenue by 25% to 35% and is shifting to a hybrid seat-plus-usage model, indicating its competitiveness in the AI era.
- Market Competition Analysis: While Nvidia faces competition from AI-specific integrated circuits, its chips' versatility and the established code on its CUDA platform allow it to maintain a significant share of AI infrastructure spending, suggesting these stocks are attractive investments in the current market environment.
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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.
Nvidia vs. Oracle: Compelling Investment Stories
- Nvidia's Market Performance: Nvidia's stock has surged over 700% in the past three years, pushing its market capitalization beyond $4 trillion, making it the largest company globally, which highlights its dominant position in high-performance AI applications and attracts significant investor interest.
- 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.
- Future Growth Expectations: Despite facing debt pressures, Oracle's forward price-to-earnings ratio stands at just 19.8, indicating that its stock is at a two-year low, and analysts expect significant revenue growth in the future, potentially providing a good buying opportunity for investors.
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- Significant Fundraising: The IPO raised $902 million, reflecting strong investor interest in Chinese AI and semiconductor firms, particularly as the public tranche was oversubscribed by more than 700 times and the international offering was nearly 38 times covered.
- Intensifying Market Competition: Despite Montage's successful listing, competition is heating up, with Huawei and its chip unit HiSilicon holding a leading share of the domestic market, suggesting that the push for self-sufficiency will lead to fiercer rivalry within the industry.
- Evolving Policy Landscape: As the Chinese government intensifies efforts for self-sufficiency in advanced chips, the recent approval for Nvidia's H200 imports under specific conditions highlights the uncertainty in policy that could impact market dynamics.
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- Sex Crime Scandal Exposure: Prominent Silicon Valley figures, including Google co-founder Sergey Brin and LinkedIn co-founder Reid Hoffman, have been linked to files related to sex offender Jeffrey Epstein, which may have long-term reputational consequences for their companies and exacerbate public trust issues in the tech industry.
- Japanese Election Outcome: Japan's ruling Liberal Democratic Party secured a supermajority in the recent election, reinstating Sanae Takaichi as Prime Minister, which grants her broad authority to boost spending and suspend certain food taxes; this result has bolstered Japanese stocks and strengthened the yen to 156.88 against the dollar, reflecting renewed investor confidence.
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- Market Surge: Following the election results, Japanese stocks reached a record high, with the yen strengthening to 156.88 per dollar, reflecting renewed investor confidence and indicating positive market expectations regarding Takaichi's policies.
- U.S. Market Rebound: Major U.S. indexes rebounded post-election, with the S&P 500 rising 1.97% and the Nasdaq Composite climbing 2.18%, driven by strong performances from tech stocks like Nvidia and Oracle, which bolstered global investor confidence.
- Private Credit Concerns: The private credit market faces renewed uncertainty as AI pressures software companies, raising investor concerns about borrower business models and potentially increasing default risks, which could impact overall financial stability.
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- Cloud Computing Market Expansion: Major cloud providers such as Amazon, Google, and Microsoft are heavily investing in data centers to meet the demand for computing power from AI developers, with Microsoft Azure achieving a growth rate of 39% in Q2 FY 2026, showcasing its competitive edge in the market.
- Recurring Revenue Stream: The rental model of cloud computing provides these companies with a continuous revenue stream; while they need to regularly replace computing units, the initial investment in infrastructure is already covered, leading to a substantial increase in future profitability.
- Intensifying Market Competition: As AI hardware and cloud computing rapidly evolve, competition among related companies will intensify, prompting investors to monitor these firms' performance in technological innovation and market share.
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- Robust Cash Flow: In fiscal 2025, EPD reported record cash flow from operations of $8.7 billion and returned approximately $5 billion to shareholders, indicating that its distributions are funded by operational performance rather than debt, which boosts investor confidence.
- Future Growth Potential: The company expects to generate $1 billion in discretionary free cash flow in 2026, with 50% to 60% earmarked for unit repurchases, which could further enhance distribution per unit for remaining investors and increase shareholder value.
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- Nvidia's Market Performance: Nvidia's stock has surged over 700% in the past three years, pushing its market capitalization beyond $4 trillion, making it the largest company globally, which highlights its dominant position in high-performance AI applications and attracts significant investor interest.
- 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.
- Future Growth Expectations: Despite facing debt pressures, Oracle's forward price-to-earnings ratio stands at just 19.8, indicating that its stock is at a two-year low, and analysts expect significant revenue growth in the future, potentially providing a good buying opportunity for investors.
See More
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- Strong Debut Performance: Montage Technology's shares surged approximately 60% on their Hong Kong debut, climbing from the offering price of HK$106.89 to HK$171, indicating robust market demand for its high-performance semiconductors and reinforcing its position in the cloud computing and AI sectors.
- Significant Fundraising: The IPO raised $902 million, reflecting strong investor interest in Chinese AI and semiconductor firms, particularly as the public tranche was oversubscribed by more than 700 times and the international offering was nearly 38 times covered.
- Intensifying Market Competition: Despite Montage's successful listing, competition is heating up, with Huawei and its chip unit HiSilicon holding a leading share of the domestic market, suggesting that the push for self-sufficiency will lead to fiercer rivalry within the industry.
- Evolving Policy Landscape: As the Chinese government intensifies efforts for self-sufficiency in advanced chips, the recent approval for Nvidia's H200 imports under specific conditions highlights the uncertainty in policy that could impact market dynamics.
See More
Big Tech Loses Over $1 Trillion in Valuation
- Big Tech Valuation Loss: According to FactSet, major tech companies collectively lost over $1 trillion in valuation over the past week, with Amazon alone shedding more than $300 billion, indicating a significant decline in market confidence that could impact future investment decisions.
- Sex Crime Scandal Exposure: Prominent Silicon Valley figures, including Google co-founder Sergey Brin and LinkedIn co-founder Reid Hoffman, have been linked to files related to sex offender Jeffrey Epstein, which may have long-term reputational consequences for their companies and exacerbate public trust issues in the tech industry.
- Japanese Election Outcome: Japan's ruling Liberal Democratic Party secured a supermajority in the recent election, reinstating Sanae Takaichi as Prime Minister, which grants her broad authority to boost spending and suspend certain food taxes; this result has bolstered Japanese stocks and strengthened the yen to 156.88 against the dollar, reflecting renewed investor confidence.
- U.S. Market Rebound: The Dow Jones Industrial Average closed above 50,000 for the first time, marking a strong market rebound, while the S&P 500 and Nasdaq Composite rose by 1.97% and 2.18%, respectively, a trend that could attract more investors back into the market and drive economic recovery.
See More
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- Election Impact: Japan's Prime Minister Sanae Takaichi and her ruling LDP secured a supermajority in the election, controlling over two-thirds of the Lower House, which allows her to freely pursue an agenda of increased spending and suspension of certain food taxes, likely stimulating economic growth further.
- Market Surge: Following the election results, Japanese stocks reached a record high, with the yen strengthening to 156.88 per dollar, reflecting renewed investor confidence and indicating positive market expectations regarding Takaichi's policies.
- U.S. Market Rebound: Major U.S. indexes rebounded post-election, with the S&P 500 rising 1.97% and the Nasdaq Composite climbing 2.18%, driven by strong performances from tech stocks like Nvidia and Oracle, which bolstered global investor confidence.
- Private Credit Concerns: The private credit market faces renewed uncertainty as AI pressures software companies, raising investor concerns about borrower business models and potentially increasing default risks, which could impact overall financial stability.
See More
Analysis of Investment Opportunities in Artificial Intelligence
- Hardware Companies Surge: Companies like Nvidia, Broadcom, and Taiwan Semiconductor are profiting from AI demand, with Nvidia's GPUs being the preferred choice for AI workloads; AI spending is projected to reach $3 trillion to $4 trillion by 2030, indicating significant market potential.
- Cloud Computing Market Expansion: Major cloud providers such as Amazon, Google, and Microsoft are heavily investing in data centers to meet the demand for computing power from AI developers, with Microsoft Azure achieving a growth rate of 39% in Q2 FY 2026, showcasing its competitive edge in the market.
- Recurring Revenue Stream: The rental model of cloud computing provides these companies with a continuous revenue stream; while they need to regularly replace computing units, the initial investment in infrastructure is already covered, leading to a substantial increase in future profitability.
- Intensifying Market Competition: As AI hardware and cloud computing rapidly evolve, competition among related companies will intensify, prompting investors to monitor these firms' performance in technological innovation and market share.
See More
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- Stable Dividend Yield: Enterprise Products Partners (EPD) has increased its distributions for 28 consecutive years, currently offering a 6.2% yield, reflecting strong cash flow and financial stability that appeals to income-focused investors.
- Robust Cash Flow: In fiscal 2025, EPD reported record cash flow from operations of $8.7 billion and returned approximately $5 billion to shareholders, indicating that its distributions are funded by operational performance rather than debt, which boosts investor confidence.
- Future Growth Potential: The company expects to generate $1 billion in discretionary free cash flow in 2026, with 50% to 60% earmarked for unit repurchases, which could further enhance distribution per unit for remaining investors and increase shareholder value.
- Project Investment Plans: EPD is undertaking $4.8 billion worth of major projects, including natural gas gathering and processing, with plans to invest $2.5 billion to $2.9 billion in 2026 and $2 billion to $2.5 billion in 2027, supporting future cash flow growth.
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