Sam Badawi
Stock Analyst, Creator of Origins of Alpha & Quarterly Conviction
NVIDIA looks remarkably cheap for its growth, trading at a lower forward P/E than 266 S&P 500 companies, more than half the index, according to a chart from The Compound's Matt. That is despite earnings still growing at nearly triple digits after three years and one of the strongest growth profiles in the market. x.com
Nvidia looks mispriced at about the same forward multiple as McDonald's, around 19x versus 18x earnings, as Shay pointed out. McDonald's defensive profile can outperform in risk-off markets, but in a tech-led bull market the matching multiple is hard to justify with Nvidia at the center of the AI capex cycle. A company growing earnings at high double digits should not trade below 30x forward earnings. x.com x.com
Nvidia's rising revenue alongside a much lower P/E is getting hard to ignore. Its chart shows quarterly revenue above $80 billion in Q2 2026 while the P/E is around 30x, down from much higher multiples in prior years. x.com
Nvidia's valuation gives too little credit to its expected long-term earnings growth. Its forward P/E-to-growth ratio is 0.28, the lowest since late 2023; the bullish read depends on those growth expectations proving accurate. x.com x.com
Nvidia's trough P/E is a trap rather than a bargain. Responding to @WaterworldCapi1 noting Nvidia at a 10-year-low P/E, a cheap multiple on a cyclical name is exactly when the stock gets hammered. x.com
Nvidia looks interesting again because rising earnings estimates have not been reflected in its valuation. FY28 EPS estimates rose about 25% in 60 days while shares stayed roughly flat; it trades below 14 times FY28 earnings with a mid-single-digit free-cash-flow yield. Exponential change is hard to grasp, and it is hard to see Nvidia not winning if the US does, though there is little capital to absorb market wobbles. x.com x.com
Amazon looks cheap against its expected long-term earnings growth if that growth proves accurate. Its five-year consensus growth is the fastest in the Magnificent 7 after Nvidia, while its 0.90 forward P/E-to-growth ratio is the lowest excluding Nvidia. x.com x.com
Nvidia is priced for perfection, so even strong earnings could send it lower; it fell after each of its last four beats, including one of 5.7%. Demand is real, with $1 trillion of orders for 2026–27 against about $253 billion of trailing sales, so slowing growth isn't the worry; the worry is that no result can satisfy a perfect price. At $5.2 trillion it is the S&P 500's biggest piece, and options imply a roughly 5% swing, about $260 billion, on the ~$92 billion of expected sales. x.com
Nvidia has never been cheaper on trailing earnings despite being the past decade's best-performing stock. Its trailing P/E is about 27.1x, near the bottom of the five-year range. x.com
Nvidia's earnings growth has outpaced its share-price gains, challenging the bubble claim. The attached comparison indexes both to 2020 and shows roughly 70x GAAP earnings versus 36x share price through 2026. x.com
Nvidia's 0.39 PEG suggests its valuation is low relative to growth. Its 26.56x P/E and 17.55x forward P/E are below their respective ten-year medians of 50.36x and 26.5x. x.com
Nvidia looks anomalously cheap among large semiconductor companies. It has the biggest market cap, the fastest growth and the cheapest valuation, and the market doesn't know what to do with that. x.com
