NVIDIA Stock Remains Stunningly Undervalued—Here’s Why
Headwinds aside, the outlook for NVIDIA's (NASDAQ: NVDA) growth and long-term profitability is undeniable.
AI is driving results; the company is expanding into new verticals and is forecasted to grow at a double-digit pace for at least the next ten years.
Thus, the Q1 2025 sell-off is an anomaly, a buying opportunity likely leading to higher prices later this year.
If the analysts' consensus and data trends can be used as a guide, the stock is stunningly undervalued at $110 and on track for a minimum 50% upside this year.
Most Analysts Agree NVIDIA’s Sell-Off Is Overdone
The analyst data provided by MarketBeat includes some price target reductions and downgrades, but the bulk—more than 90% over the preceding 12 months—is bullish. It contains numerous price target revisions and upgrades that have the consensus reported by MarketBeat up by 107%, indicating a nearly 60% upside in early March, with the high-end range adding another $50 or 30% of upside.
Assuming the upcoming earnings reports align with trends, including revenue and guidance strength, the analysts' trends will likely continue to lift sentiment support the market.
Recent updates are from Wedbush, Wells Fargo, and Bernstein. They all make note of headwinds and policy uncertainty impacting the stock price, highlighting the value opportunity and the long-term outlook for sustained business strength.
The upcoming GTC developers conference is a potential catalyst, including news on things like optics/photonics, quantum computing, the launch of new Blackwell designs, and the upcoming release of Rubin.
Wedbush analyst Dan Ives sees tech stocks, including NVIDIA (NASDAQ: NVDA), Tesla (NASDAQ: TSLA), Microsoft (NASDAQ: MSFT), and Palantir (NASDAQ: PLTR), hitting new highs in the year’s second half after markets have had time to calm down.
Wells Fargo analyst Aaron Rakers says the GTC conference can’t come soon enough, while Bernstein analysts called the year-to-date stock price stunning so early in the product cycle. They also highlighted a multiyear value relative to historical P/E multiples and the Philadelphia Semiconductor Index.
Institutional activity aligns with analysts' sentiment trends, providing a strong tailwind for the NVDA market, not considering NVIDIA’s impact on the overall market. The institutions have bought NVDA on balance for three consecutive quarters after selling in Q2 2024 and ramped their activity in Q1.
This solid show of support indicates the group buying into the sell-off. Assuming this continues, the bottom for NVIDIA stock will likely appear on the charts soon and lead to a solid rebound later this year.
There Are Catalysts to Unlock NVIDIA’s Value
Aside from the GTC developer conference, NVIDIA’s most likely catalysts lie in the upcoming FQ1 2026 earnings report. The company is forecasted to grow revenue by 10% sequentially and 66% annually and will likely outperform the consensus despite the high bar set by analysts.
The catalyst will be in the margin of outperformance and business updates, including new deals, advances in semiconductor technology, and monetization of ongoing projects.
Regarding the valuation, NVIDIA’s price correction has realigned the market, bringing it down to roughly 24x the C2025 outlook. That is near the 21x paid for the average S&P 500 company, providing nearly no premium for the growth outlook. The company is forecasted to grow earnings at a high double-digit CAGR through 2035, putting its valuation below 9x by the middle of the next decade.
NVIDIA Nears Bottom; Has Room to Fall
NVIDIA is nearing its bottom but has room to fall. The stochastic indicator is one sign that the market bottom will be found soon, entering oversold territory, but MACD disagrees.
It converges with the recent lows, suggesting even lower prices may come. That could result in another decline, but strong technical support exists at the $100 level, so downside risk is limited.
