💥 Why Nvidia Might Be the Cheapest AI Stock on the Planet Right Now

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Hi Fellow Investors,

Nvidia (NASDAQ: NVDA) continues to dominate the artificial intelligence landscape while quietly flashing signs of undervaluation.

Despite being the world’s largest public company, its growth-adjusted metrics suggest investors may still be underestimating its long-term earnings power.

The setup heading into 2026 could be far more compelling than the headlines imply.

Key Points:

• Nvidia’s forward valuation metrics suggest it may be one of the cheapest large-cap AI stocks available today.

• Explosive data center demand and global AI infrastructure spending continue to drive exceptional growth visibility.

• Earnings power could scale dramatically through the end of the decade if current trends persist.soft’s enterprise-centric AI model gives it stronger resilience than consumer-driven rivals.

Why Nvidia’s Valuation May Be Sending the Wrong Signal

At first glance, Nvidia’s trailing price-to-earnings ratio appears elevated compared to traditional benchmarks.

However, forward-looking estimates tell a very different story when growth is properly accounted for.

Based on 2026 projections, Nvidia trades at a forward P/E below 25 with a PEG ratio under 0.7.

For a company growing revenue at more than 60% year over year, those metrics point to potential undervaluation.

This disconnect suggests the market may still be pricing Nvidia as a cyclical winner rather than a long-term infrastructure platform.

The Growth Engine Behind the World’s AI Infrastructure

Nvidia’s recent financial performance underscores why valuation concerns may be overstated.

Revenue increased more than 60% year over year last quarter, while earnings growth closely matched that pace.

Management expects momentum to continue, forecasting roughly 65% revenue growth in the upcoming quarter.

Major cloud providers and AI developers have already committed to aggressive infrastructure spending in 2026.

As a result, demand visibility for Nvidia’s data center products remains unusually strong.

A Balance Sheet and Cash Flow Machine Few Can Match

Beyond growth, Nvidia’s financial strength adds another layer of downside protection.

The company holds over $50 billion in net cash and marketable securities.

Free cash flow is on track to approach $85 billion annually, an extraordinary figure even among mega-cap peers.

This financial firepower allows Nvidia to invest aggressively while maintaining strategic flexibility.

It also supports the argument that the company’s valuation should be viewed on a growth-adjusted basis.

Why Nvidia’s Competitive Moat Still Looks Unassailable

Nvidia’s dominance is rooted in far more than chip performance alone.

Its CUDA software ecosystem has become the foundation upon which most AI models are built.

The proprietary NVLink interconnect further enhances performance by enabling GPUs to operate as unified systems.

Together, hardware, software, and networking form an ecosystem competitors struggle to replicate.

This has helped Nvidia capture more than 90% of the data center GPU market.

The Path to $20+ in Earnings Per Share

Looking ahead, Nvidia’s long-term earnings trajectory remains compelling.

Management estimates global data center capital spending could reach $4 trillion by decade’s end.

As the primary supplier of AI compute and networking, Nvidia is positioned to capture a meaningful share.

Even with gradually moderating growth, earnings could scale dramatically over the next five years.

Under reasonable assumptions, adjusted earnings per share could exceed $20 by fiscal 2030.

Strengths

• Dominant market share in AI data center GPUs supported by a deeply entrenched software ecosystem.

• Exceptional free cash flow generation and a fortress-like balance sheet.

• Strong visibility into multi-year demand driven by global AI infrastructure spending.

Weaknesses

• High expectations leave the stock sensitive to any slowdown in AI-related capital expenditures.

• Heavy reliance on large cloud customers concentrates revenue sources.

• Regulatory and geopolitical risks could impact certain international sales channels.

Potential

• Sustained AI infrastructure investment could drive earnings well beyond current consensus forecasts.

• Continued ecosystem expansion may further widen Nvidia’s competitive moat.

• Forward valuation compression could unlock significant upside as growth persists.

Conclusion

Nvidia’s valuation looks far more attractive when viewed through the lens of growth and cash generation.

The company’s unique position at the center of the AI infrastructure boom provides rare long-term visibility.

If earnings scale as projected, today’s price may ultimately look conservative rather than excessive.

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