Think It's Too Late to Buy Nvidia? Here's the Biggest Reason Why There's Still Time.
Nvidia (NASDAQ: NVDA) investors have been very happy in recent years. Since 2020, shares have increased in value by roughly 1,500%. That meteoric rise has been fueled by the AI revolution. With a leading market share for AI GPUs, Nvidia has become one of the market's favorite AI stocks.Think it's too late to profit? Think again. According to some metrics, Nvidia shares remain surprisingly cheap.With a $3.5 trillion market capitalization, Nvidia stock looks expensive according to its price-to-sales ratio. Shares currently trade at 24 times sales -- a premium multiple for such a large business. But on an earnings basis, the situation changes. Shares trade at 46 times trailing earnings. That's still a notable premium, but given that the company is growing sales by more than 50% annually, the stock trades at 33 times next year's earnings.Continue reading
Nvidia (NASDAQ: NVDA) investors have been very happy in recent years. Since 2020, shares have increased in value by roughly 1,500%. That meteoric rise has been fueled by the AI revolution. With a leading market share for AI GPUs, Nvidia has become one of the market's favorite AI stocks.
Think it's too late to profit? Think again. According to some metrics, Nvidia shares remain surprisingly cheap.
With a $3.5 trillion market capitalization, Nvidia stock looks expensive according to its price-to-sales ratio. Shares currently trade at 24 times sales -- a premium multiple for such a large business. But on an earnings basis, the situation changes. Shares trade at 46 times trailing earnings. That's still a notable premium, but given that the company is growing sales by more than 50% annually, the stock trades at 33 times next year's earnings.
