NVIDIA (NVDA), Cheapest in 7 Years?...$350 'Surge Signal'

▲ NVIDIA (NVDA), US Stock/AI Generated Image

NVIDIA's (NVIDIA, NVDA) forward price-to-earnings (P/E) ratio has fallen to its lowest level in seven years. As the price burden decreased even when compared to large tech stocks like Apple, Wall Street maintained its target price of $350.

According to economic media outlet Benzinga on July 8 (local time), BofA Securities analyst Vivek Arya maintained a "buy" rating and a target price of $350 for NVIDIA. Arya described NVIDIA as a "unique and sustainable high-growth company." He added, "I strongly disagree with the view that an excessive discount has been applied to earnings per share. On the contrary, the buying opportunity has increased."

The projected price-to-earnings ratio for 2026 is 22.9x for NVIDIA. Apple (Apple, AAPL) is 35x, Microsoft (Microsoft, MSFT) is 21.8x, and Alphabet (Alphabet, GOOG·GOOGL) is 25.6x. Amazon.com (Amazon.com, AMZN) is 24x, Meta Platforms (Meta Platforms, META) is 15.9x, and the average for the five companies excluding NVIDIA is 24.5x.

Arya believes that NVIDIA's price attractiveness will become even more pronounced from 2027. Its projected price-to-earnings ratio is the lowest among its peers at 15.7x in 2027 and 12.4x in 2028. The average for the five companies excluding NVIDIA is 22.3x and 19x, respectively.

Arya pointed out that investors are excessively reflecting the impact of High Bandwidth Memory (HBM) while underestimating NVIDIA's pricing power and business scale. He predicted that the gross profit margin would remain in the mid-70% range in the future. He assessed that the current stock price already reflects negative factors that could reduce earnings per share by 30-35%.

Arya stated, "NVIDIA's upcoming earnings will reaffirm its competitive advantages built in products, pricing, and supply chain." He also projected that the company would maintain a dominant share of the artificial intelligence (AI) capital expenditure market in the long term. BofA Securities presented the next earnings announcement as a positive catalyst for NVIDIA's stock price.

[Article Key Summary]

-NVIDIA's forward price-to-earnings ratio has fallen to its lowest level in seven years, and BofA Securities maintained its target price of $350.

-NVIDIA's projected price-to-earnings ratio is the lowest among comparable large tech stocks, at 15.7x in 2027 and 12.4x in 2028.

-BofA Securities assessed that negative factors, including a 30-35% reduction in earnings per share, are already reflected in NVIDIA's stock price and presented the next earnings announcement as a positive catalyst.

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