Nvidia Is Looking Cheap to Some as 220% Rally Stalls

Nvidia bulls are starting to throw around an adjective rarely used for a stock that’s more than tripled in less than a year: cheap.

That’s the view of investors like Alec Young, chief investment strategist at Mapsignals, who have watched Nvidia shares trade in a $100 range since the summer, meandering after rallying to near $500 in August. But with profit estimates still rising, Nvidia’s price relative to expected earnings has fallen to the lowest since mid-2022.

“The stock is actually very cheap,” said Young, adding that its price-to-earnings ratio is less than the company’s estimated growth rate, which is uncommon.

NVIDIA Has Grown Into its Valuation

Michael Sansoterra, chief investment officer at Silvant Capital Management, also puts Nvidia’s valuation in the cheap group.

“It’s growing decidedly faster than the great majority of other companies,” he said. “It’s relatively inexpensive.”