Nvidia, the chipmaker at the center of the AI boom, is drawing fresh investor interest — not because its stock is soaring, but because a growing chorus argues it has become unusually cheap relative to the company's earnings.
According to MSN, Nvidia's stock "hasn't been this cheap in 7 years," with a declining share price and rapidly growing earnings combining to produce what the outlet calls a very attractive valuation. A separate MSN piece frames the question directly: why is Nvidia stock so cheap, and what is the "only plausible answer"?
Bulls point to the company's dominance. According to The Motley Fool (also published on aol.com), Nvidia is "still the king," arguing that its coming Rubin upgrade cycle is one clear reason the stock is not in a bubble.
Much of that confidence rests on Nvidia's competitive moat. According to MSN, Nvidia's data center business booked a $75 billion quarter, dwarfing rival AMD's $6 billion — but the report stresses the real advantage is not raw computing power. Instead, it is CUDA, Nvidia's software platform, which locks in customers because rivals would need to rewrite a decade of CUDA-native code to compete.
Investors appear to be acting on the thesis. MarketBeat reports that Vaughan Nelson Investment Management lifted its NVDA position, while CNBC's Trade Tracker notes that Kevin Simpson bought more Nvidia. Simply Wall St lists Nvidia among three high return-on-equity picks backed by strong balance sheets.
Why it matters: Nvidia's valuation is a barometer for the entire AI trade, so whether the market sees it as a bargain or a bubble shapes how millions of investors weigh the technology's staying power.