Nvidia Corporation (NASDAQ:NVDA) has firmly planted its flag among the most important companies in the world. Indeed, there’s nary a doubt that it will be front and central in the AI race far into the future.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
And yet, it’s also fair to ask if the outstanding returns of the past can be even partially replicated. After all, few would argue that Nvidia’s rapid ascent – gaining over 1,200% during the last three years – is likely to repeat itself.
However, it’s not just a fear of slowing growth that is giving investors pause. Worries over Nvidia’s China business have led to some headwinds of late, as both sides of the divide are placing some roadblocks on sales into this market. This includes the need to pay the U.S. Treasury 15% of its China revenues, while the Chinese government is encouraging domestic companies to source their AI needs from local firms.
One investor known by the pseudonym Hunting Alpha is undeterred by these risks, and believes that Nvidia remains a good option for those looking for long-term growth.
“NVDA looks like an ideal GARP stock, as its earnings growth expectations continue to remain very robust, yet its valuation multiple has contracted and fallen below sector medians,” explains the investor.
Hunting Alpha points to a number of reasons for this bullish take, with the company’s constant ability to hit product “home runs” first and foremost. CEO Jensen Huang has described the demand for the Blackwell Ultra as being “extraordinary,” and the investor is expecting big things from the next-generation Rubin when it launches next year.
Looking at the calendar, Hunting Alpha also cites Nvidia’s usual successes in Q3, which has traditionally been the quarter with the highest sequential growth rate. While this is due to demand peaks in the PC and gaming segments, the investor also points out “that Nvidia’s data center customers tend to accelerate deployments in the middle to late innings of the calendar year.”
With a 1-Year Forward Price-to-Earnings multiple of 31.22x, NVDA is trading at a 10% discount to the semiconductor sector median of 34.68x.
And let’s not forget, reminds Hunting Alpha, agentic AI, industrial AI, and sovereign AI should each provide further support for Nvidia in the years to come.
“I am reiterating my bullish view as the company is accelerating its product release timelines to capitalize on these mega-growth themes,” concludes the investor, who rates NVDA a Buy. (To watch Hunting Alpha’s track record, click here)
That’s right where most of Wall Street finds itself as well. With 36 Buys, 2 Holds, and a single Sell, NVDA enjoys a Strong Buy consensus rating. Its 12-month average price target of $211.11 implies an upside north of 20%. (See NVDA stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.