Nvidia's Stock Hasn't Been This Cheap Since 2019. Here's Why It's the Best Buy in the Market Now.

Nvidia is viewed as trading at a ~31x trailing P/E, the cheapest since 2019, despite the AI infrastructure build-out still accelerating. Wall Street expects ~82% revenue growth for the current fiscal year and ~42% next year, which the article argues is likely conservative given NVDA’s history of outperforming estimates. The write-up claims Nvidia’s valuation discount versus peers (e.g., Apple ~40x, Alphabet ~27x; AMD ~165x, Broadcom ~63x) offers an attractive risk/reward, though it notes the stock is only roughly in line with the S&P 500 YTD.

Analysis

The market is not really debating whether AI spend exists; it is debating how much of that spend is already pre-discounted in NVDA and whether the next leg of growth comes with the same scarcity premium. A 31x trailing multiple is only cheap if revenue revisions keep outrunning earnings growth; if the cadence slows even modestly, the stock can still de-rate despite being "cheap" versus peer optics. In that sense, the key variable is not absolute valuation but revision breadth across hyperscaler capex and NVDA's ability to keep converting demand into outsized gross profit.

Second-order winners remain the picks-and-shovels around NVDA, but relative performance likely narrows if investors rotate from "AI beneficiary" to "AI monetizer." AMD and AVGO both look vulnerable on a relative basis because they carry higher expectations for less certain share gains; however, they also benefit if the market re-prices the entire AI compute stack upward. On the flip side, AAPL and GOOG may continue to look expensive on a growth-adjusted basis if the market keeps rewarding infrastructure over end-market AI adoption, which argues for a spread trade rather than a naked long.

The contrarian risk is that this is less a mispricing than a late-cycle multiple support story: the stock can look optically cheap while the underlying trade becomes crowded. The main falsifier is not a headline miss but a guide-down in data-center growth, gross margin, or evidence that customer capex budgets are pausing for ROIC scrutiny over the next 1-3 quarters. If that happens, NVDA's relative discount versus peers can widen further before it normalizes, particularly if bond spreads at the hyperscalers start to widen and signal capex fatigue.

Key Decisions for Investors

• Maintain a tactical long NVDA position, but add only on post-earnings pullbacks or 3%-5% weakness; target 15%-25% upside over 6-12 months if forward revenue estimates keep rising and gross margin stays intact.
• Express relative value with a long NVDA / short AMD pair for the next 3-6 months; AMD still has more multiple risk if AI share gains prove slower than the market expects, while NVDA retains the cleaner scarcity premium.
• Use a long NVDA / short AAPL basket as a cleaner growth-vs-defensives spread for 1-3 months; the trade works if the market continues to favor infrastructure names over consumer hardware, but cut it if AAPL starts showing AI-driven upgrade acceleration.
• If already long semis broadly, rotate part of the exposure from AVGO into NVDA on a 6-12 month horizon; AVGO's higher valuation leaves less room for disappointment if AI networking/custom silicon growth normalizes.
• Set an alert on the next two quarterly guides: any slowdown in NVDA data-center growth or gross margin compression is the key thesis breaker and would justify reducing exposure immediately.