Is Nvidia Stock Undervalued

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Is Nvidia Stock Undervalued

Is Nvidia Undervalued Or In A Bubble?

There are two schools of thought when it comes to the Nvidia share price. One group thinks Nvidia's share price is in a bubble, while the other thinks it is still undervalued.

Right now, Nvidia has a market cap of around $4.5 trillion, which makes it the top company in the world. The sheer size of the company also means massive outflows and inflows of money.

Nvidia Continues To Beat Expectations

Another good thing is that Nvidia continues to beat expectations for every quarterly results. But despite this, the share price of Nvidia tumbled, which surprised everyone.

But even now, 20+ analysts have upgraded the target for the Nvidia share price. Also, the current trading price of Nvidia stock is still 41% below the average target set by the analysts.

So, even if we see some decline in the Nvidia share price, it doesn't change the fact that Nvidia has strong growth prospects. That's why any decline in the share price must be viewed as noise and nothing more.

Right now, Nvidia is trading at a PEG ratio of 1, and its forward P/E is 36. The forward P/E ratio is almost 78% higher than the average seen in the IT sector.

However, the PEG ratio shows that Nvidia stock is available at a 34% discount compared to the sector average. All of this tells us the valuation is in line with the growth prospects of the company.

So, if the investors can look beyond the talk of the AI bubble, there's still potential for upside in the Nvidia stock. And last but not least, Nvidia is a dominant player in the chipmaking field and is also at the center of the AI revolution.

With all things considered, Nvidia stock is definitely a good option and isn't in a bubble at all. This can be confirmed by looking at the results of the last few quarters, which showed strong revenue growth and demand.

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