Tae Kim, author of “The Nvidia Way” and founder of Key Context, says Nvidia Corp. (NASDAQ:NVDA) is trading at its cheapest valuation in years despite accelerating fundamentals.
Cheap On Every Metric That Matters
"We're talking about nearly 80% growth on an $80 billion figure in just three months," Kim said during a Wednesday episode of TBPN. He also noted that the stock trades at about 19 times forward earnings, below the S&P 500's multiple, even though the index is growing at only around 10%. “Nvidia is becoming more and more undervalued,” he added.
Separately, Jensen Huang, this week, said Nvidia’s Vera CPU platform targets a “brand new” $200 billion TAM in agentic AI workloads, widening the company’s total addressable market beyond GPUs.
Competition Is A Rounding Error
Kim dismissed Google‘s TPU and Amazon’s (NASDAQ:AMZN) Trainium as material threats. On TPU specifically, he said, “TPU gets headlines, but $5 billion is nothing when you’re comparing it to a trillion dollars.” He noted Nvidia has locked up supply across memory, wafers and optical components, leaving rivals with little room to scale.
The founder of the reader-supported publication pointed to share buybacks as a potential re-rating catalyst. He said Nvidia has indicated it plans to direct 50% of its free cash flow toward repurchases, though he described the wording as "a little cryptic" regarding whether the figure is calculated before or after supplier prepayments.
He drew a direct parallel to Apple Inc. (NASDAQ:AAPL), which traded at seven times earnings during the large-screen iPhone era, when Android was seen as a major competitive threat. He said Apple's valuation later climbed from single-digit multiples to 30 times earnings after the company significantly increased share buybacks. "I think the PE is going to rate much higher," Kim said.
On China, Kim was unequivocal. “I’ve given up on China,” he said, noting Huang secured approvals at GTC only to see them fall through weeks later. With gaming GPUs facing incremental bans and restrictions tightening on both sides, Kim said the status quo is Nvidia simply not selling into China. “I would temper expectations,” he added.
What's Going On With NVDA Stock?
On Wednesday, Nvidia reported first-quarter fiscal 2027 revenue of $81.615 billion, surpassing estimates of $79.04 billion. Earnings per share came in at $1.87 per share, ahead of the $1.76 consensus estimate.
Nvidia has a market capitalization of $5.41 trillion, a 52-week high of $236.54 and a 52-week low of $129.17.
The large-cap stock has gained 69.55% over the past 12 months.
Benzinga’s Edge Stock Rankings indicate that NVDA stock is experiencing a positive price trend across all time frames.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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