New Street Research Global Technology Managing Partner Pierre Ferragu believes Nvidia Corp. (NASDAQ:NVDA) stock is “extremely cheap” on a forward earnings basis, predicting the company is “very likely” to hit $400, about 78% higher from the current levels, within the next 18 months.
NVDA Stock ‘Extremely Cheap’ Valuation
Speaking on CNBC’s Squawk Box, Ferragu challenged the notion that Nvidia has grown too large to deliver outsized returns. He argued that the market has yet to fully price in the sheer scale of global artificial intelligence adoption and the company’s ability to generate cash.
“One thing to note, though, all these gigantic market caps are getting extremely cheap,” Ferragu said. “If you look at Nvidia, and if you trust what the CEO Jensen Huang said, this stock is actually trading on single-digit earnings multiple on 2028 earnings.”
With Nvidia CEO Jensen Huang recently stating the company is supply-constrained while expecting to grow its business by at least 70% next year, Ferragu highlighted the sector’s robust fundamentals. “We are in a situation where AI usage is growing very fast,” he said, adding that there is “no, like, top in sight yet.”
The Path to $400
When pressed on whether Nvidia could reach a $400 price target—which would vault its market capitalization toward $10 trillion—Ferragu did not hesitate, predicting it would happen much sooner than a decade.
“I think, like, given the earnings power of the business, I would say, even, like, 18 months from now, it’s very likely that we see that kind of, like, 400-plus-dollar stock price seems, like, at least to me, very likely,” Ferragu stated.
The Apple Playbook
To contextualize Nvidia’s unprecedented scale, Ferragu drew a direct parallel to Apple Inc. (NASDAQ:AAPL) in the early 2010s. At the time, skeptics argued Apple was too big to keep growing, only for the market to eventually digest its scale and re-rate the stock based on its pricing power and expanding product ecosystem.
Ferragu expects a similar trajectory for Nvidia as Wall Street digests its underlying fundamentals. “That’s probably what’s going to eventually move the stock, like getting the market to acknowledge that outlook for Nvidia,” he concluded.
How Has Nvidia Performed in 2026?
Price Action: At the last check, the NVDA stock was trading 0.25% higher in premarket trading on Thursday. It was up 20.33% year-to-date, advancing by 31.40% over the last year, and rose 22.98% over the last six months. It closed 3.21% higher at $224.41 per share on Wednesday.
Benzinga’s Edge Stock Rankings indicate that NVDA maintains a strong price trend in the long, short, and medium terms, with a solid growth score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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