Think Nvidia Is Expensive? These 3 Charts Might Change Your Mind.
Over the past five years, Nvidia (NASDAQ: NVDA) stock has risen in value by nearly 1,500%, making it one of the most valuable companies in the world. Think it's too late to benefit as an investor? Think again. According to the charts below, shares remain very attractive for long-term investors.On a price-to-sales basis, Nvidia shares look outrageously expensive. Shares trade at 21 times sales despite a market cap of around $3 trillion. Few companies in history this large have traded at such a high premium. But because Nvidia is a profitable business, we can also look at shares on a price-to-earnings basis. From this perspective, shares don't look nearly as expensive. And when it comes to shareholder returns, profits matter a lot more than sales. Continue reading
Over the past five years, Nvidia (NASDAQ: NVDA) stock has risen in value by nearly 1,500%, making it one of the most valuable companies in the world. Think it's too late to benefit as an investor? Think again. According to the charts below, shares remain very attractive for long-term investors.
On a price-to-sales basis, Nvidia shares look outrageously expensive. Shares trade at 21 times sales despite a market cap of around $3 trillion. Few companies in history this large have traded at such a high premium. But because Nvidia is a profitable business, we can also look at shares on a price-to-earnings basis. From this perspective, shares don't look nearly as expensive. And when it comes to shareholder returns, profits matter a lot more than sales.
