Nvidia is a value stock according to Jim Cramer, and while some might dismiss the views of the “Mad Money” host, the evidence is mounting.
Nvidia chips are still dominant in the artificial-intelligence sector but the prospect of the $4.42 trillion company being able to double in size again seems distant currently, even as its numbers improve. Investors hunting for the next hot growth play in AI are more interested in its supply chain, looking at areas such as memory chips or optical networking.
The latest hardware announcements at Nvidia’s GTC conference were universally agreed to be impressive but didn’t get the stock moving. Nvidia shares remain stuck in the same $180-$190 range they have largely been in since last summer.
Value stocks typically trade at lower-than-average price-to-earnings ratios. Nvidia isn’t quite there yet—it trades at a forward PE ratio of just over 21 times according to FactSet, just slightly ahead of the 20.9 times average for the S&P 500 as a whole.
But by other standards, Nvidia is acting more like a value stock than a growth play. Notably it is giving cash back to its shareholders. The company plans to return 50% of free cash flow to shareholders through dividends and buybacks. For 2026, Nvidia is expected to generate $171.76 billion in free cash flow, so it should be handing back more than $85 billion.
That makes Nvidia look more like Apple, which returns nearly all of its free cash flow to shareholdersvia share buybacks, than many of its large-cap technology peers which are seeing their own cash flowscompressdue to the need for heavy spending on AI infrastructure.
It’s a comparison that might not excite shareholders as Apple faces questions about its record of innovation in recent years. But Apple’s consistent returns have led to a premium valuation, with the iPhone maker trading at a forward PE ratio of more than 28 times currently.
If Nvidia can emulate that, shareholders will be rewarded, even though it’s not quite the explosive gains of yesteryear.
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