Nvidia Is the Cheapest It's Been Since 2019. Why Investors Should Load Up Now.

Nvidia shares are down sharply from an all-time high in mid-May, but the article highlights strong fundamentals: record quarterly revenue of $81.6B (+85% YoY) with data center revenue up 92%. The company increased its dividend from $0.01 to $0.25 per share and announced an additional $80B buyback, signaling confidence in shareholder returns. Despite the stock’s volatility and a decline from peak valuation, the piece argues the sell-off looks like sector rotation and notes Nvidia’s forward P/E is 22.6—unusually cheap versus its history.

Analysis

The more important signal here is not the headline valuation reset; it is that NVDA is still being treated by the market as a crowded duration proxy for AI capex. That means the stock can fall even when fundamentals are fine, because positioning and factor exposure dominate until the next proof point on hyperscaler spending. The dividend hike and buyback matter less as income support than as a message that free cash flow is now large enough to absorb some moderation in growth without breaking the story.

Second-order winners are the broad AI infrastructure stack if NVDA stabilizes: semiconductor equipment, foundry, and optical interconnect names should benefit from any re-acceleration in orders or a relief rally in sentiment. The risk for competitors is the opposite: if NVDA’s multiple re-expands, it tightens financing conditions for every alternative GPU/ASIC narrative and pulls capital back toward the incumbent. In the near term, this is mostly a technical and flow event; over 1-3 months it becomes a revisions event tied to gross margin and data-center demand cadence.

Contrarian view: the market may be underpricing the chance that AI capex normalizes faster than revenue growth, which would compress the “scarcity premium” even if earnings still rise. The key falsifier is not a single weak print, but a sequence of downward revisions in forward EPS or evidence that inventory and mix are no longer improving. If NVDA cannot reclaim prior support after the next earnings/capex update, the path of least resistance is another leg lower despite the buyback narrative.

Key Decisions for Investors

• Do not chase strength; wait for NVDA to revisit the high-$190s/low-$200s or the next earnings catalyst before initiating fresh longs. Risk/reward is better on a retest than on an extension after a technical bounce.
• If already long NVDA, hedge event risk with a short-dated SOXX or SMH put spread into the next earnings window; this protects against a sector-wide de-rating if AI capex commentary softens.
• Pair idea: long NVDA / short SOXX on a relative basis only if NVDA reclaims leadership while breadth stays weak. This isolates idiosyncratic dominance versus a broader semiconductor factor unwind.
• Set a hard alert on forward EPS and gross margin revisions: if either turns lower for two consecutive sell-side cycles, treat the buyback/dividend narrative as support, not a thesis, and reduce exposure.
• Watch the next hyperscaler capex commentary as the real catalyst. If spend remains firm, NVDA can re-rate quickly; if not, use any bounce to trim into strength rather than average down.