History Says Nvidia Rarely Trades This Cheaply. Here's What Happened the Last Time.
Nvidia has the potential to resume its bull run, given its cheap valuation and strong growth prospects.
Nvidia (NVDA) has been a major benefactor of the AI revolution, with its stock surging nearly 1,700% in the past four years. However, the stock has underperformed the broader market this year, trading at 23 times forecasted 2027 earnings, significantly below its five-year average forward earnings multiple of 33.4. The last time Nvidia traded at a similar valuation was in 2018, when its forward earnings multiple was 18.7.
The company's revenue in the first half of fiscal 2027 increased by 96% year-over-year to $177.8 billion, and non-GAAP earnings per share jumped 130% to $4.09. Analysts expect Nvidia's earnings to grow by 71% next year, suggesting the stock could be undervalued. With a 12-month median price target of $320, suggesting a potential 44% increase from current levels, and almost all 72 analysts rating Nvidia as a buy, investors may find a potential multibagger opportunity in this semiconductor giant.
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