Analyst Explains Why Nvidia Nvda Valuation Isn T As Streched As

Bonisiwe Shabane

-Dec 31, 2025, 7:52 PM

analyst explains why nvidia nvda valuation isn t as streched as

We recently published Top 10 Trending Stocks to Watch Ahead of Nvidia Earnings. NVIDIA Corporation (NASDAQ:NVDA) is one of the top trending stocks to watch ahead of Nvidia earnings. Nancy Tengler from Laffer Tengler said in a program last month that Nvidia's valuation is not too high and recommended investors to buy the stock on the dip. “I guess I would just say that the valuation is not as stretched as everyone would argue. I don’t know that you buy it here. We were adding during the April tariff tantrum.

We picked some off at $108 a share. We added to the position while we’ve been trimming Broadcom, which has actually outperformed NVIDIA Corp (NASDAQ:NVDA) over the last year. But if you look at fiscal year earnings growth, 2026 is supposed to be 45%, then 33% in 2027, 14% in 2028, and it’s currently trading at a forward PE of 40. So you’re actually paying less than one times on a price-earnings-to-growth basis. So unless you think the growth in this company is done, I don’t think you sell the stock here. I don’t think you necessarily buy more, but on dips you step in and add to the holdings.”

Investors are gearing up for Nvidia’s latest results on Wednesday. In its last reported quarter, Nvidia’s data center computer revenue rose 76% year over year, driven by Blackwell GB200. The company is finding new catalysts for growth. Saudi Arabia’s Humain plans to buy more than 200,000 AI GPUs from Nvidia, potentially generating $15 billion in sales. The UAE reportedly has an agreement for up to 500,000 GPUs. Even without China’s involvement for now, Nvidia said nearly 100 AI factories are under construction.

These factories have hyperscalers deploying 1,000 GB200 NVL72 racks weekly, each with 72,000 Blackwell GPUs. Sands Capital Technology Innovators Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter: Antonio Bordunovi/iStock Editorial via Getty Images Nvidia Corporation (NVDA) stock looks ready to move higher, as the fundamentals continue to be strong, the valuation is reasonable, and the chart may be starting to break out. To top things off, NVDA option prices are Analyst’s Disclosure:I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole.

Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Chip giant Nvidia (NVDA) is considered to be one of the key beneficiaries of the artificial intelligence boom, thanks to robust demand for its advanced graphics processing units (GPUs). The stock has been under pressure recently due to concerns about valuations of AI plays and growing competition in the AI chip space from rivals like Broadcom (AVGO), Advanced Micro Devices (AMD) and Alphabet-owned... Nvidia is also facing uncertainty related to chip exports to China amid geopolitical tensions between Washington and Beijing. Despite ongoing pressures, several top analysts remain bullish on Nvidia for several reasons, including its solid track record, strong execution, continued innovation and dominant position in the AI GPU market.

TipRanks' AI Analyst also has an "outperform" rating on NVDA stock with a price target of $205. Let's look at the views of three such Wall Street pros who are bullish on Nvidia's growth potential. Following a virtual meeting with Nvidia's vice president of investor relations, Toshiya Hari, Bank of America analyst Vivek Arya reiterated a buy rating on NVDA stock with a price forecast of $275, saying that... Nvidia (NVDA) is once again in the spotlight as its share price has seen some short-term turbulence, catching the attention of investors. There is no major event driving the current move, but shifts like this often raise a familiar question among those thinking about buying, selling, or holding the stock. Is this a sign of changing sentiment toward a company that rarely stays out of the headlines for long?

Looking at the bigger picture, Nvidia's past year has been nothing short of a story in momentum. The stock is up 61% over the year, supported by consistent double-digit quarterly growth in both revenue and net income. Gains of 22% in the past 3 months show forward movement, although the recent month brought a pullback of just over 5%. Longer-term holders have seen impressive returns, but the latest slip might have some wondering if the run is losing steam or just resetting before another push higher. After such a strong stretch, some are questioning whether the current dip is an opening for investors to buy a leader at a more reasonable price, or if the market is simply recalibrating its... The leading narrative sees Nvidia as significantly overvalued relative to its intrinsic worth, driven by lofty revenue projections and dominant AI market expectations.

“Nvidia will hit $400b annual revenue in 5 years time. ~90% of revenue will come from data centre customers. This equates to $90b per quarter, or equivalent to 30,000 Blackwell racks (at ~$3m per rack). At 150kW per Blackwell rack, data centres will need to expand at 4.5gW per quarter to keep up. Global data centres are expected to increase wattage at 15% per year, which in 5 years time will be close to the 18gW annual increase required. AI (GPU) data centres have higher yields than other data centres, so some amount of use conversion is also expected.”

Wedbush Securities’ senior analyst, Dan Ives, has names top five tech stocks to own into 2026. Notably, Nvidia – the chipmaker that has become synonymous with the artificial intelligence (AI) boom – did not find a spot on his list. And yet, Palantir – an AI-enabled data analytics firm that’s currently infinitely more expensive to own than NVDA – somehow did. Note that Nvidia shares are on track to finish 2025 with an exciting 100% gain versus its April low, while Palantir stock is currently up a whopping 180% versus its year-to-date low. Speaking with CNBC, Dan Ives argued that the next stage of the AI revolution will be defined less by the “godfather of AI” and more by firms building applications and platforms on top of...

Analyst Explains Why Nvidia Nvda Valuation Isn T As Streched As

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