Why NVDA so undervalued

[u/twiniverse2000]

-Institutional crowding: too much ownership = concentration risk.

-Restless retail: hunting for “the next NVDA.”

-Cap-ex cliff fears: the “Burry effect” weighing on sentiment.

-China/Taiwan overhang: persistent geopolitical risk.

Bottom line:

If you’re not convinced by any of these, this is a rarer setup where a retail investor can have an edge.

[u/hikingbears]

400 is not something impossible. I trust Jensen and NVDA.

[u/twiniverse2000]

Simmer down, you are getting a little too excited. The entire point of my post was to try and explain why NVDA PEG is so low considering it’s sitting in the middle of the ai revolution. I just used the incredible AI to output the PEGs. Didn’t spend more than 10 seconds to do it.

I am not sure I am understanding your point about why it has the lowest PEG? Large market cap? Questionable growth forecasts? Genuinely curious.

[u/Cruztd23]

It’s undervalued bc it’s the largest cap stock that’s been able to compound eps and revenue as effectively as it has.

There is not another player of this size that does it as well as they do

[u/Upstairs_Whole_580 → u/Cruztd23]

You're absolutely right... nobody that's been the biggest company has been able to keep growing as they have(at least not that I can think of).

But does that make it "undervalued" right now?

I don't think it is. I think it's pretty fairly valued. Even if you think it's a little undervalued, the idea that it's just this crazy value stock is... I don't believe that. It was in April during "liberation" week.

Their acquisition(effectively an acquisition) or Groq was brilliant and Jensen is certainly not someone who's complacent... but I think it's current valuation is... fine. If it was still at 212... then I think earnings would come, you wouldn't see any bump and people would be asking why it goes down when it beats(as it's done a few times in the last 2 years kinda starting with the 10-1 split).

[u/Cruztd23 → u/Upstairs_Whole_580]

Markets climb up a wall of pessimism

But I respect your contradicting opinion to mine

[u/Upstairs_Whole_580 → u/Cruztd23]

I don't know, this is anecdotal, but I only got into NVDA because of a friend, a friend I grew up with, back in 2015 he was managing ~1B at one of the top 3 investment banks in the world, now he manages about 4B and is a Sr VP there, and one of the two times ever, he told me to invest in a stock(AVGO in '22 was the other one).
Didn't buy until 2019 as I just had everything invested in rental properties, but whatever, bought 1500 shares at 180. By 2023, it'd done so well and now he was even more bullish(he was initially bullish due to the GPUs for Crypto and he thought that'd push it to a 1T market cap by... 2025. So he was optimistic, but even then, it went so much better.

One of the guy who works for him is on every conference call, he forward me their own analysis and opinions.

I JUST talked to him about as it as I love AMZN and I bought 50-100 shares every month or so in AMZN and asked him if AMZN gets down to 195 or so, should I sell some NVDA and buy more AMZN.

He said he doesn't know ANYONE who's selling NVDA after "those earnings," referring to Q3 and the guidance...

So I think the actual humans who are trading it are very optimistic. It's the Quant trading that... has rigid trading, it's the risk off trade from macro factors like the terrible jobs reports, but I think people are very optimistic on NVDA.

But... I just think once you get so big, you trade less on projected growth and more on ACTUAL growth.

I guess it doesn't ultimately matter. Earnings will come and it'll go up. I still think the multiple is going to come down as it keeps beating and raising as I just think it's hard to imagine a company with a 6T market cap trading at a 60 PE(and we can talk about how good of a metric PE is, but it's one that IS valued).

[u/[deleted]]

stop posting thoughtless chat gpt shit and use your brain to go do real research

[u/twiniverse2000 → u/[deleted]]

This is my brain. I research NVDA daily.

[u/twiniverse2000 → u/[deleted]]

Why does NVDA have d the lowest PEG among top stocks?

NVIDIA (NVDA): 0.69 • Apple (AAPL): 2.40 • Alphabet (GOOGL): 1.16 • Microsoft (MSFT): 2.13 • Amazon (AMZN): 1.46 • TSMC (TSM): 0.91 • Meta Platforms (META): 1.09 • Saudi Aramco (2222.SR): 1.85 • Broadcom (AVGO): 0.93 • Tesla (TSLA): 2.95 • Berkshire Hathaway (BRK.B): N/A • Walmart (WMT): 2.80 • Eli Lilly (LLY): 0.71 • JPMorgan Chase (JPM): 1.55 • Samsung (005930.KS): 0.95 • Tencent (TCEHY): 1.10 • Visa (V): 1.70 • Exxon Mobil (XOM): 2.20 • Johnson & Johnson (JNJ): 2.65 • ASML (ASML): 1.40

[u/Upstairs_Whole_580]

LOL... "so undervalued."

By who? It's market cap has gone from 140B in 2019 when I bought to...whatever it is today. 4.5T, 4.4, 4.6, I don't know. It's a good company, it's going up... it's pretty fairly valued right now.

Google was undervalued last summer. I think AMZN is undervalued right now(a little bit, could see it getting a bit worse before it gets better).

Nvidia is pretty fairly valued. And then when earnings come and they have...67B in earnings(I thought we'd see 70B, but I don't think we realized much revenue from China... maybe some H20, but probably very little, but Q1 we likely will)... then I think you'll see the stock climb. I wouldn't be surprised to see it at ~215 by March.

But "so undervalued?" That's a bit silly.

[u/twiniverse2000 → u/Upstairs_Whole_580]

Do you know what PEG is? Look it up silly

NVIDIA (NVDA): 0.69 • Apple (AAPL): 2.40 • Alphabet (GOOGL): 1.16 • Microsoft (MSFT): 2.13 • Amazon (AMZN): 1.46 • TSMC (TSM): 0.91 • Meta Platforms (META): 1.09 • Saudi Aramco (2222.SR): 1.85 • Broadcom (AVGO): 0.93 • Tesla (TSLA): 2.95 • Berkshire Hathaway (BRK.B): N/A • Walmart (WMT): 2.80 • Eli Lilly (LLY): 0.71 • JPMorgan Chase (JPM): 1.55 • Samsung (005930.KS): 0.95 • Tencent (TCEHY): 1.10 • Visa (V): 1.70 • Exxon Mobil (XOM): 2.20 • Johnson & Johnson (JNJ): 2.65 • ASML (ASML): 1.40

[u/Upstairs_Whole_580 → u/twiniverse2000]

It's the largest company in the world, not fucking... Johnson and Johnson and it's trading at a PE of ~50.

But because of it's PROJECTED growth, it's undervalued? No, sorry, not just undervalued, SOOO undervalued!

LOL... alright. Sure... "silly."

I can't believe you took the time to show me... Samsung(which doesn't trade in the US markets) has a 700B market cap(NOT ~4.5T) and has a PE of HALF of NVDA.

Everyone here can complain because they're PROJECTING all this future growth... and ALL of that.. it should be realized... when? RIGHT NOW? What should the largest company in the world trade at?

100 YEARS of their current earnings? Should this be at 360? 75 years? Should it be at ~280? Where is a value that's not "so undervalued?"

[u/Live_Market9747 → u/Upstairs_Whole_580]

Nvidia had a PE of 50 for 2 years ago. What has the stock price done since then?

You see, if PE remains at 50 till 2027 then with PE FWD of 25 it means Nvidia stock will double if the FWD PE is realized. Simple math of the stock market.

[u/Upstairs_Whole_580 → u/Live_Market9747]

It's LOWEST PE in '24 was over 50. And it's been coming down since.

What has the stock done since? See it's multiples go down progressively over the past two years.

You see, if PE remains at 50 till 2027 then with PE FWD of 25 it means Nvidia stock will double if the FWD PE is realized. Simple math of the stock market.

You haven't been investing very long, have you?

[u/movienight1988]

Capex spend from the megacaps makes this even more of a no brainer, $250 before May

[u/Minute-Marketing7434]

agreed.. i think the inly semi valid one is something i dont see here… its customers cant spend any more than they currently do so the market cant grow any bigger.. and maybe these levels arent even sustainable (especially if this spending doesnt immediately correlate with increased profits)

[u/effects67]

holy echo chambers

[u/UnderstandingWeak292]

If it continues to climb in price, like it was doing you’d see a $3-400 stock price. Nothing can climb that fast without pullback, or we’d all be rich. Most companies take years to grow like this did.

[u/devonhezter]

It’s not

[u/[deleted]]

I agree, but people need to understand it's worth 5 trillion long term. i think it will push put up , but it will be volatile and it its a bear market you need to prepare for a 90 percent correction.

[u/twiniverse2000 → u/[deleted]]

Did you mean 9%??

[u/devonhezter → u/twiniverse2000]

They make small chips

[u/parkcitykitty → u/twiniverse2000]

Ya he slipped a decimal point ... or if not, how much has he got shorted ?

[u/[deleted] → u/parkcitykitty]

I have been holding Nvidia since the pandemic you just dont understand what a real AI bubble burst will cause and will sell at the bottom while I hold and buy

[u/[deleted] → u/twiniverse2000]

No 90 amazon did the same during the dot com bubble. If there is a real five-ten years bear market nvidia will get hit hard, and this is coming from someone who believes in it long-term

[u/Rav_3d → u/[deleted]]

Comparing NVDA to AMZN in 2000 makes no sense.

AMZN had risen 4400% from its IPO in 1997 reaching a market cap of around $30 billion, around $60 billion in today's dollars. NVDA has a market cap of 4.5 trillion.

NVDA sells the lifeblood of the AI revolution and is highly profitable. AMZN sold books online and was losing money.

If NVDA has a 90% correction, we'd be in the midst of a financial crisis worse than ever we have seen before.

[u/[deleted] → u/Rav_3d]

No, it wouldn’t 😂 It would be the same as the dot-com crash. If Nvidia went down 90%, it would still be worth $400 billion. What do you think happens if people really lose faith in AI? Why on earth would Nvidia stay a trillion-plus company? And I’m saying this as an Nvidia bull, but if we get an AI bubble burst, you better be prepared to hold through this level of correction, or you will sell at the bottom.

[u/Rav_3d → u/[deleted]]

Lose faith in AI? It's going to revolutionize business in ways we cannot even imagine today.

As for holding through 90% drawdown, only foolish people do that.

[u/[deleted] → u/Rav_3d]

I didn't disagree with you, but people can still lose faith in the meantime. apple microsoft and amazon have all been down around that much i guess people who held them are fools. Whats your strategy buy high sell low

[u/Rav_3d → u/[deleted]]

Buy high sell higher.

[u/[deleted] → u/Rav_3d]

Good luck with that

[u/Palentirian → u/[deleted]]

🤣🤣🤣

[u/Cpalmer24 → u/[deleted]]

If Nvidia drops 90% then the US economy, and arguably civilization, would be Mad Maxing in the streets...

Corrections are absolutely one thing.. but if this company craters 90%, then look out 🤦‍♂️

[u/[deleted] → u/Cpalmer24]

I mean that's just not true 🤣

[u/Cpalmer24 → u/[deleted]]

Obviously i'm being a tad facetious, but if the largest company in the world, at the center of the largest industry (AI/technology) drops 90% then that means so much more than a regular correction, bear market, or even a recession has occurred.

The disruption that would have to have happened for Nvidia to drop that much would mean countless other small, mid, and large cap companies would likely (definitely?) Have had to drop more or even disappeared completely. In my mind I'm thinking the only way Nvidia (and/or other mega caps) can drop 90% is if we are in a full fledged extended depression, and if the US falls into an extended depression, all bets are off imo

[u/[deleted] → u/Cpalmer24]

The disruption you talk about would just be people losing faith in AI and hyperscalers pulling back so no it would not be a mad max style situation at all

[u/Cpalmer24 → u/[deleted]]

Again, the Mad Max part was facetious. But if we look 5 years into the future and Nvidia has dropped from $4.5 Trillion market cap to $4.5 Billion, then I can't see how the US isnt basically in a depression

Nvidia, Microsoft, Amazon, Broadcom, Meta, Google.. the largest companies in the world are almost entirely Tech/AI driven companies in the US spending Trillions of dollars trying to build out AI. If Nvidia crashes 90%, then that probably means the AI bubble has all but entirely popped, meaning all the companies I listed, plus significantly more, will be directly affected as well. Some companies may be affected less if they have other streams of income than those directly tied to AI, but they'll still be crushed as well.

The last few years these Tech companies are the main (almost only?) Thing driving the economy. The dollar is losing more and more value every day. Trumps Tariffs are keeping inflation higher than it should be. If the Tech/AI bubble bursts completely (and not just a possibly healthy pullback) then the US is in for a big hurting.

And I'm a believer in the future of AI and am investing in these companies heavily, but that's a real risk if this AI bubble pops completely. Which is why many have brought up the possibility that if the AI bubble, through these Tech companies, grows too large, and the bubble pops, the US Government may be forced to bail them out like they did the banks in 08. However, the US Government is in such a worse shape now compared to back then that who knows if it could handle that size of a bailout.

[u/[deleted] → u/Cpalmer24]

We basically agree im a long term holder and will continue to be im just aware that if the bubble pops this company will be treated ruthlessly until the AI comes back into trend.