Nvidia (NASDAQ:NVDA) and records are no strangers, and the chip giant notched another on Wednesday, when the stock crossed the $4 trillion market cap threshold, becoming the first company ever to hit that milestone.
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That saw Nvidia pull further away from closest peers Microsoft and Apple, but if you think the stock might be looking pricey at such an elevated level, then think again.
That at least is the opinion of one investor, known by the pseudonym the Agar Capital (AC), who argues that Nvidia’s valuation is “justified by its dominant AI infrastructure, explosive earnings growth, and unmatched margins, not by speculative hype or bubble dynamics.”
Indeed, the investor pushes back against the chorus of skeptics who tend to sound the bubble alarm each time Nvidia sets a new high. In AC’s view, Nvidia isn’t just a “buzzword” – it’s the engine room of a technological revolution, consistently delivering profits and cash flow on a scale that rivals can’t match. Far from being “overvalued,” its current valuation is a reflection of the outsized influence it wields over the future of artificial intelligence.
Skeptics, of course, have been voicing the same concerns since Nvidia was worth $500 billion, then $1 trillion, and later $2 trillion. Now, at $4 trillion, those doubts persist. Yet, as AC points out, “The price isn’t the problem. It’s the market’s incredulity.”
What’s more, focusing solely on Nvidia’s share price overlooks the broader narrative. As AC emphasizes, this is arguably the most “powerful margin machine” on the planet, with the company raking in $44 billion in revenue and $26 billion in cash in just the first quarter of FY26. About 90% of that revenue now comes from data centers, a segment where margins are still expanding, driven by the rapid adoption of new Blackwell chips and rising demand for Nvidia’s proprietary networking technologies, such as NVLink and Spectrum-X.
While it’s true the stock isn’t cheap, labeling it as expensive is also misleading. Nvidia’s P/E ratio continues to fall as EPS surges, and the PEG ratio hovers around 1, signaling that growth is keeping pace with valuation. Free cash flow yield remains “positive and solid.” And compared to peers like AMD, Intel, and Broadcom, Nvidia clearly stands out for its superior profitability, high-quality earnings, and robust returns on capital. Over the years, it has become the backbone of the AI-driven economy, and as AC concludes, “This is not a bubble. It is a dominant position monetized to the highest degree.”
With all of that in mind, it’s hardly surprising that Agar Capital rates NVDA shares a Buy. (To watch Agar Capital’s track record, click here)
Wall Street broadly agrees; based on a mix of 37 Buys, 4 Holds and a single Sell, Nvidia boasts a Strong Buy consensus rating. (See NVDA stock forecast)
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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.