Nvidia Stock Still Looks Cheap Despite 200% Plus Surge: Strategist

Yahoo Finance2023-12-28

Maybe Nvidia's (NVDA) stock isn't grossly overvalued after a sizzling 237% gain this year, given the arms race to unleash new AI superpowers on the world. "I think there is a chance for it [to become ...

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The company — fueled by voracious demand for its H100 chip — has also inked high-profile generative AI chip deals with ServiceNow  and Snowflake .The strong demand has triggered a material upward reset in Nvidia's profit forecasts by Wall Street analysts.For its next fiscal year, Nvidia's profits are expected to surge at least 67% from the prior year to $20.50 a share. Three months earlier, analysts were modeling for profits of $16.71 a share.But analysts Yahoo Finance has spoken to say Nvidia's stock still looks cheap when applying other valuation metrics.Another driver is Nvidia finally being able to make enough of its AI chips to feed its top line sales and industry-leading gross profit margins.Prisco believes there is a \"","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0080751232.USD":"富达环球多元动力基金A","BK4141":"半导体产品","LU2063271972.USD":"富兰克林创新领域基金","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU0158827948.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"A\" (USD) INC","NVDA":"英伟达","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","LU0354030511.USD":"ALLSPRING  U.S. LARGE CAP GROWTH \"I\" (USD) ACC","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","LU0354030438.USD":"富国美国大盘成长基金Cl A Acc","LU2458330169.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A\" (SGD) ACC","BK4592":"伊斯兰概念","LU1267930730.SGD":"富兰克林美国机遇基金AS Acc SGD (CPF)","LU0238689110.USD":"贝莱德环球动力股票基金","LU2458330243.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A-H1\" (SGDHDG) ACC","LU0234570918.USD":"高盛全球核心股票组合Acc Close","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","LU0072462426.USD":"贝莱德全球配置 A2","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","IE00BDCRKT87.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC","LU0079474960.USD":"联博美国增长基金A","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","LU0056508442.USD":"贝莱德世界科技基金A2","LU1803068979.SGD":"FTIF - Franklin Technology A (acc) SGD-H1"},"translate_title":"英伟达股票看起来仍然便宜，尽管200%以上飙升：策略师","themeId":"95e3e7595ac2407d82a2e646db9ba6e0","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NVDA":1.1},"content_text":"Maybe Nvidia's (NVDA) stock isn't grossly overvalued after a sizzling 237% gain this year, given the arms race to unleash new AI superpowers on the world. \"I think there is a chance for it [to become the world's most valuable company] to happen,\" veteran tech analyst Paul Meeks said on Yahoo Finance Live. \"You think about it, it's going to have to increase its market cap at least 100% from here. I think it could happen, but I would not be bold enough to make that claim yet.\"Nvidia is viewed as holding the pole position in the AI space due to its chips that power OpenAI's ChatGPT platform. The company — fueled by voracious demand for its H100 chip — has also inked high-profile generative AI chip deals with ServiceNow (NOW) and Snowflake (SNOW).The strong demand has triggered a material upward reset in Nvidia's profit forecasts by Wall Street analysts.Just 90 days ago, Wall Street was banking on Nvidia earning $10.76 per share in profits for its current fiscal year according to Yahoo Finance data. Today, that figure stands at $12.29 per share. For its next fiscal year, Nvidia's profits are expected to surge at least 67% from the prior year to $20.50 a share. Three months earlier, analysts were modeling for profits of $16.71 a share. The stock's impressive triple-digit return in 2023 has pushed its trailing-twelve month price-to-earnings ratio (PE) to 65 times according to Yahoo Finance data. That's almost three times more than the trailing PE on the S&P 500.But analysts Yahoo Finance has spoken to say Nvidia's stock still looks cheap when applying other valuation metrics. Nvidia's stock, for instance, trades on a PEG (price to expected earnings growth) ratio of a mere 0.5 times. A PEG ratio below 1 times is often viewed by Wall Street as a potentially undervalued opportunity.  On a forward PE ratio, Nvidia's stock fetches 24.5 times — not too removed from the S&P 500's forward multiple of 21 times. Given Nvidia's expected earnings growth over the next 12-months is potentially north of 70% (S&P 500 is only forecast to grow earnings around 10% in 2024), a case could be made shares aren't yet priced for perfection. \"This is my best tech idea going into 2024,\" Meeks contends.Meeks isn't alone on the bullish Nvidia thesis, supported by attractive valuation. Researchers at Evercore ISI, led by Matthew Prisco, outlined several catalysts for Nvidia in 2024. They include a \"broadening\" of its customer base from large language model startups and consumer internet companies to sovereign AI clouds and enterprise software players. Another driver is Nvidia finally being able to make enough of its AI chips to feed its top line sales and industry-leading gross profit margins. Prisco believes there is a \"clear path\" to Nvidia becoming the most valuable company in the market, supplanting the likes of Apple (AAPL) and Microsoft (MSFT). To be clear, Nvidia's market value is well shy of those two tech titans ($1.22 trillion for Nvidia vs. $2.93 trillion for Apple and $2.8 trillion for Microsoft). Prisco acknowledges it's next to \"impossible\" to quell investor concerns about profit-taking on Nvidia in early 2024 and downside risk tied to the US export ban on AI chips to China. But from a pure valuation perspective, Nvidia doesn't appear to be a bubble. \"In 2024 for Nvidia, there is no doubt a lot more room to grow from a revenue and a profit dollar standpoint,\" said Moor Insights & Strategy CEO Patrick Moorhead on Yahoo Finance Live. Added Moorhead, \"We are also going to see some big action on the inference side as we saw in machine learning about four or five years ago when the growth went from training to inference. No doubt there is more room here for Nvidia.\"And in the process, perhaps grow into a headier valuation.","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":4,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2394904730"}