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▲ NVIDIA/Source: X
Despite AI leader NVIDIA trading near its 52-week high, an analysis suggests that thanks to explosive profit growth, it has entered its cheapest valuation range in 10 years.
According to U.S. financial media Nasdaq on September 26 (local time), NVIDIA (NVDA) stock has risen approximately 20% in 2026, comfortably outperforming the S&P 500 and Nasdaq indices. While the pace of stock price growth has moderated compared to the period when it surged more than threefold in 2023 and nearly doubled in 2024, leading the market, valuation burden has significantly decreased, contrary to market concerns. This is a result of the strong compression of price multiples due to a combination of doubts about the sustainability of capital expenditures by cloud big tech companies, AI fatigue, and the pursuit by competitors.
Wall Street analysts project NVIDIA's earnings per share (EPS) for fiscal year 2028 to be $15.68. Based on the current stock price of approximately $225, the forward price-to-earnings (P/E) ratio falls to about 14.3x. This is the lowest forward P/E NVIDIA has recorded in the last 10 years based on multi-year earnings forecasts. It is evaluated that a historical trend could be replicated, where after the forward P/E dropped to the early 20s in late 2018 and early 2019 due to a slowdown in demand for cryptocurrency mining and gaming GPUs, the stock price surged more than tenfold in three years with the explosion of generative AI.
The expansion of its business beyond a simple graphics processing unit manufacturer to the entire AI ecosystem is also cited as a reason for further rebound. Production of the new Vera Rubin CPU, dedicated to powering AI agents, has begun in earnest, and major cloud companies have started adopting it. Through the acquisition of Hugging Face for $12.9 billion, NVIDIA has established itself at the center of the open-source model ecosystem, and through collaborations with Marvell Technology and Nokia, it has expanded into next-generation 6G communication and custom silicon markets. Tangible results are also continuing in the field of physical AI, including integration into space probes, deployment of Amazon logistics robots, and autonomous robotaxi platform integration.
Nasdaq predicts that NVIDIA's earnings per share will reach at least $26 by fiscal year 2030. If the forward P/E normalizes from the current 15x level to 22x in the future, the stock price could rise to approximately $572, representing a potential return of 154% compared to the current price, meaning an investment of $1,000 today could grow to $2,540. The analysis suggests that NVIDIA offers an attractive investment opportunity in the form of a long-term value stock at a juncture where earnings growth and valuation normalization align.
[Article Key Summary]
-NVIDIA is trading near its 52-week high at around $225, but its forward P/E of 14.3x is the cheapest it has been in 10 years.
-It has secured next-generation growth engines through Vera Rubin CPU production, Hugging Face acquisition, and expansion into robotics and autonomous driving.
-Assuming EPS of $26 by 2030 and a return to a P/E of 22x, the stock price could rise to $572, turning $1,000 into $2,540.
*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*
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