"The anemic price action can mostly be traced back to the anxiety investors have about the "AI bubble" potentially bursting this year. Nvidia is an easy target for the bears after all. However, bulls expect the price action to speed up in the coming months through next year. Financials are still healthy, and Wall Street can't keep underpaying if earnings keep climbing. Could this take NVDA stock above $300 this year, or should you buy instead?"
"The stock may be trading sideways, but it is actually getting cheaper... fast! The company's underlying earnings have been climbing quarter after quarter, meaning a flat share price has turned Nvidia into one of the cheapest AI chip stocks you can buy today if you go by the forward price-to-earnings ratio. NVDA stock trades at less than 25 times earnings, despite analysts expecting 62% EPS growth for the next fiscal year."
"Revenue growth is also expected to be 50.6%. Growth hasn't fallen off as quickly as the bears would have expected , and AI demand has remained strong with no sign of a slowdown. Management has kept its beat-and-raise cadence. As a result, nothing yet points to any weakness that can drag the stock down substantially from here. Instead, I expect the growth to continue and accelerate in the coming months."
NVDA shares have lingered around $180 since August amid a broader loss of momentum for AI-leading stocks. Investor anxiety about an "AI bubble" and bearish targeting have limited price action, even as bulls anticipate acceleration through next year. Underlying earnings have climbed quarter after quarter, producing a forward P/E under 25 while analysts forecast 62% EPS growth and roughly 50.6% revenue growth. Management has maintained a beat-and-raise cadence, and AI demand shows no signs of slowing. Investors are rotating into other names, with AVGO outperforming due to smaller size and competitiveness in the AI market.
Read at 24/7 Wall St.
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